20210104Exhibit 14.pdf

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Exhibit 14
RECE{VEfr An lDACORPComponY
DONOVAN E.IIALKER
SenlorGoumd
drrallter0idahooowcr.corn
May 25, z0fi
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, ldaho 8372U0074
Re: Gase No. IPG-E-10-18
,N THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY
FOR APPROVAL OF A FIRM E'VERGY SATES AGREEMENT WTH NEW
ENERGY THREE LLC FOR THE SALE AND PURCHASE OF ELECTRIC
ENERGY FROM THE DOUBLE B DAIRY ANAEROBIC DIGESTOR
PROJECT
Dear Ms. Jewell:
Encloeed for filing please find an original and seven (7) copies of ldaho, Power.
Company'sApplication in the above matter.
3Em.
Very truly yours,A{,rua--
38
Donovan E. Whlker
DEM/:csb
Enclosures
P.O. Box 70 (83707)
1221 W. ldaho St
Boise, lD &1702
DONOVAN E. WALKER (lSB No. 5921)
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
P.O. Box 70
Boise, ldaho 837OT
Telephone: [phone]
Facsimile: (208) 388€936
dwal ker@ldahopower. co m
lnordstrom @idahopwer.oom
RECEIVEI}
30lB lliY ZS p,tt P; grr
unrl?ffioctrtl?iii*,0*
Attorneys for ldaho Power Company
Strcet Address for Exoress Mail:
1221 West ldaho Street
Boise, ldaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MAfiER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF A FIRM ENERGY SALES
AGREEMENT WTH NE\A' ENERGY
THREE, LLC, FOR THE SALE AND
PURGHASE OF ELECTRIC ENERGY
FROM THE DOUBLE B DAIRY
ANAEROBIC DIGESTOR PROJECT.
CASE NO. IPGE-10.18
APPLICATION
ldaho Power Gompany ("ldaho Powef or the 'Companf), in accordance with
ldaho Code S 61-503 and RP 52 and the applicable prcvisions of the Public Utility
Regulatory Policies Act of 1978 ("PURPA'), hereby respectfnlly applies to the ldaho
Public Utilities Commission (1PUC or the 'Commission") fur an Order approving the
Firm Energy Sales Agrcement between ldaho Poyver and New Energy Three, LLC
("New Eneryt') under which New Energy would sell and ldaho Power vtould purchase
electric energy generated by the Double B Dairy Anaerobic Digester Power Project
("Facilitf) located in Cassia Courfi, ldaho.
APPLIGATION.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 elec{ric utilities
purchase power produced by oogenenators or small pou,er produers that obtain
qualiffing facility ('QF") status. The purctase price a QF rcceives for the sale of its
power is generally refened to as the avoided cost rate and is computed to be equal to
the incremental cost to an electric utility of electric eneryy or capacity or both, wltich, but
for the purchase from the QF, such utility vrould generate itself or purcfiase from
another souroe. The Commission has authority under PURPA Sections 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 fiom
QFs, and to implement FERC's PURPA rules.
II. THE HRM ENERGY SALES AGREEHENT
2. On May 24, 2010, ldaho Power and New Energy entered into a Firm
Energy Sales Agreement ("Agreemenf) for the Facility pursuant to the terms and
conditions of the various Commission Orders applicable to this PURPA agreement.
See, Order Nos. 30415, 30488, 30738, and 3074. A copy of the Agreement is
enclosed wtth this Application as Attachment No. 1. The Agrcement is for a term of 15
years and contains the nonJevdized published arolded cost nates established by the
Commission in Order No. 30744 for energy deliveries of less than 10 average
megawatts ('[il\lv").
APPLICATION.2
3. The nameplate rating of this Facility will be 2 tvlW. As defined in
paragraph 1.21 of the Agreement and as described in panagraph 4.1.3 of the
Agreement, New Energy will be required to provide data on the Facility that ldaho
Power wil! use to confirm that under normal and/or average conditions the Facility will
not exceed 10 average IvlW on a monthly basis.
4. New Energy has elected a Scheduled Operation Date of December 1,
2412, for the Facility. lf the Facility has not achieved its Openation Date by that date,
Delay Liquidated Damages and associated Delay Security provisions wtthin this
Agreement are applicable.
5. Sec'tion 21.1 of the Agreement provides that the Agreement will not
bemme effective unti! the Commission has approved al! of the Agrcemenfs terms and
conditions and declarcd that all payments ldaho Power makes to New Energy for
purchases of energy will be allowed as prudently incuned expenses for ratemaking
purposes.
6. All applicable interconnection study charges under Schedule 72 hava
been assessed and coltected from New Energy. The final interconnection Feasibility
Study is complete and the final Facility Study for the Fac{lity is underway. ldaho Power
Power Supply has made application for appllcable transmission capacity and has been
notified that transmissbn capacity is available.
ilr. APPLTCABLE RATES
7. On March 16, 2010, in Order No. 30125 issued in Case No. GNR-E-1041,
the Commission adopted new published avoided cost rates for the purchase by ldaho
Power of capacity energy from PURPA QFs. The rates adopted in Order No. 31025 aro
APPLICATION .3
approfmately 10 percent lower than the rates previously adopted in Case No. GNR-E-
09-01, Order No. 30744. By its terms, Order No. 31025 applies to new PURPA
contracts executd on and after March 16, 2010. Because the Agrcement is dated May
24, 2010, Order No. 31025 r,vould require that the rates to be paid New Energy under
the Agreement would be the rates set out in Order No. 31025 rather than the higher
rates approved by the Commission in Order No. 30744. However, this Commission has
reognized in prior Orders that there arc situations when QF rates are changed that it is
appropriate to include a prior vintage of rates in a cunent PURPA contmct.l ln several
cases litigated in the early to mid-1990s, the Commission determined, and the ldaho
Supreme Court afiirmed, certain criteria that a QF developer must satisff in oder to
establish an entitlement to sell energy at a particular published avoided cost rate.2 One
of the criteria that would quatify a particular generating facility to receive the superseded
rate requires that the developer have executed a power sales agreement with the utility
at the rate in question before a sucoessor rate becomes efiective. lf the QF cannot
meet the first criteria, the semrd criteria requires that prior to the new rates effectirre
date, the QF developer must have filed a meritorious complaint alleging that the proiect
was sufiiciently mature and far enough along in the contracting process that but for the
conduct of the utility @mpany, the developer woutd 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 wtth ldaho Power b
purchase the Facility generation on or before March 16, 2010. On April 15, 2010, New
1 The tdaho Supreme Court has confirmod that it is within the Commission's iurisdk*ion lo
determine which vintage of QF rates should apply to a PURPA contsact. See Emp*e Lumber v.
Washington Water Powa,114 ldaho 191, 755 P.2d 1?29 (1988) and A.W. Brsrivn @., lnc., v. ldaho
Power @npany 121 ldaho 812, 828 P.zd Ul (1 992).
' A.W. Brovtn, Rosebud,l31 ldaho.
APPLICATION - 4
Energy filed a Complaint at the Commission alleging that it was entitld to 3 conhacts
containing the higher Order No. 30744 rates. Upon further revievu of the facts, and by
signing this agreement and voluntarily submitting it to the Commission, ldaho Power
has concluded that New Energy meets the semnd test described above and should be
entitled to the rates established by Order No, 30744 in Case No. GNR-E{9-01. The
Company has received a number of requests for'grandfathering' of QF contracts. tn
making a determination to file and support an application urging that a partiarlar QF
proiect is entitled to the Order No. 30744 rates, the Company conduded that a project
must have met ALL of the following criteria prior to March 16, 2010.
a. lnterconnection and.Transmission
i. Filed an interconnection application; and
ii. Received and accepted an interconnection feasibility study
report for the projec{ and paid any requested study deposits (or established credit) for
the next phase of the interconnection prooess in amordance with Schedule 72; and
iii. Received confirmation fiom ldaho Power that transmission
capacity is available for the project ard/or received and accepted transmission capacity
study results and cost estimates.
b. Purchase Poruef-Aoreement
i. An agreement was materially complete prior to March 16,
2014, and except for routine ldaho Power final processing, an agreement would have
been executed by both parties priorto March 16, 2010.
9. lt is ldaho Powefs opinion that the New Energy Facility meetrs all of the
above-referenced criteria. WiSr respect to the poner purchase agreement criteria, New
APPLICATION - 5
Energy and ldaho Power had resolved all material outstanding contract issues prior to
March 16, 2010. Both parties expected that fina! review of the contmc{ would be a
relatively sfiaigtttforward pocess. However, in early February, the Company became
aware of some new prccedural requirements ftom FERC that affected the way that ihe
Facility would qualify for a Network Resource designation and thereby obtain the
tansmission needed to bring the power to be generated by the Facility fiom the
interconnection to the Company toad centers. The new procedure required some
changes to the intemal ptocess at tdaho 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 required by ldaho Power to implement the new intemal
transmission and netvrork resouroe prooess and, as a result, the Facility should qualify
for a contract including the Order No. 30744 rates. New Energy is cunent in all of its
interconnection study payments and so as bng 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
Openation Date forthe Facility.
10. The Agreement contains the most recent terms and corditions, including
the liquidated damages and security provisions prcviously approved by the Gommission
in the Arena Drop and the Dry Creek dairy cases, Otder Nos. 31060 and 31034,
respectively.
APPLICATION - 6
1',. Based on the foregoing, 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. MODIFIED PROCEDURE
12. ldaho Power believes that a hearing is not neoessary to oonsider the
issues presented herein and respectfully requests that this Application be processed
under Modified Procedure, i.e., by rrrnitten submissions rather than by hearing. RP 201,
ef seg. lf, however, the Commission determines that a technical hearing is rcquired, the
Company stands ready to present its testimony and support the Application in such
hearing.
V. COMMUNrcAT|oNS A]{D SERVICE OF PLEAT'INGS
13. Communications and seMce of pleadings, exhibits, orders, ard other
documents rclaffng to this proceeding should be sent to the following:
Donovan E. Walker, Senior Counsel
Lisa Nordstrom, Lead Counsel
ldaho Power Company
1221 West ldaho Street
P.O. Box 70
Boise, ldaho 83707
dwalker@ idahooower. com
lnordstrom@ida hooower. com
Randy C. Allphin
Energy Contract Adrninistrator
ldaho Power Company
1221West ldaho Street
P.O. Box 70
Boise, ldaho 83707
rallohin@ idahooower. com
VI. REOUEST FOR RELIEF
14. ldaho Power Company respectftrlly requests that the Commission issue
an Orden (1) authorizing that this matter may be processed by Modified Prccedure; (2)
approMng the Firm Energy Sales Agreement between ldaho Power Company and New
Energy Thrce, LLC, without change or condition; aM (3) declaring that all payments for
purchases of energy under the Firm Energy Sales Agreement between ldaho Porler
APPLICATION. T
Company and Nerr Energy Three, LLC, be alloued as pndently Incuned expenses for
ratemaking purposes.
Respectfirlly submitted thls 25h day of May 2010.
DONOVAN E. WALKER
Attomey for ldaho Pouor ComPanY
APPLICATION. s
CERTIFICATE OF TAILING
I HEREBY CERTIFY that on the 250| day of May 2010 I 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, LLG
Attn: Laura Knothe, PE.
NevU Energy One, LLC
8720 Vic Lane
Mlddleton, ldaho 83644
Dean J. Miler
McDEVITT & MILLER LLP
420 West Bannock Street
P.O. Box 256/.
Boise, ldaho 83701
_Hand DeliveredX U.S. Mail
_Orcmight Mail_FN(
Email
-Hand
DeliveredX U.S. Mail_ Ovemight Mail_ FAX_ Email [e-mail]
E. Walker
APPLICATION.9
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
cAsE NO. IPC-E-10-18
IDAHO POWERCOMPANY
ATTACHMENT NO. 1
!
a FIRM ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
NEW ENERGY THREE, LLC
TABLE OF CONTENTS
Article TMLE
Definitions
No Reliance on ldaho Power
Warranties
Conditions to Acceptance ofEnergy
Term and Operation Date
Purchase and Sale of Net Energy
Purchase Price and Method of Payrnent
Environmental Attributes
Facility aud trnterconnwtion
Metering and Telemetry
Records
Operations
lndermifi cation and Insurance
Force Majeure
Liability; Dedication
Several Obligations
Waiver
Choice of Laws and Venue
Disputes and Default
Governmental Authorization
Commission Order
Successors and Assigns
Modification
Taxes
Notices
Additional Terms and Conditions
Severability
Couterparts
Entire Agreement Signatures
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3
4
5
6
7
8
9
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18
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20
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23
24
25
26
27
28
29
AppendixA
Appendix B
Appendix C
Appendix D
FIRM ENERGY SALES AGREEMENT
(10 alvlw or Less)
Project Name: Double B Dairy
Project Number: 3 16 I 6 120
2fit^'THIS AGREEMENT, entered into onthis of 4 2010betweenNEW ENERGY
THREE, LLC, an ldaho limited liability company (Seller), and IDAHO POWER COMPANY, an Idaho
corporation (Idaho Power), hereinafter sometimes refe'ned to collectively as "Parties" or individually as "Party."
WTTNESSETH:
WI{EREAS, Seller will design, construct, owrU maintain aud operate an elecEic generation facility; and
WHEREAS, Seller wishes to sell, and Idaho Power is willing to purchase, firm elechic energy produced
by the Sellq's Facility.
TIIEREFORE,In consideration of the mutual covenants and agreerrents hereinafter set forth, the
Parties agree as follows:
ARTICLE I: DEFINITIONS
As used in this Agreernent and the appendices attached hereto, the following terms '
shall have the following meaninp:
l.l "Basg Jgg1g" - Monthly Net Enerry less than I lCIlo of the monthly Net Enerry Amount as specified
in paragraph 6.2 of this Agreemnent.
1.2 "Q@ngi!fu" - The Idaho Public Utilities C-ommission.
1.3 "Contract Year'' - The period cornmencing each calendar year on the same calendar date as the
Operation Date and ending 364 days thereafter.
1.4 "Delay Liquidated Damages" - Damages payable to ldaho Power as calculated in paragraph 5.3, 5.4,
5.5, 5.6 and 5.8.
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1.5 "DglE@od" -All days past the Scheduled Operation Date rmtil the Seller's Facility achieves the
Operation Date.
1.6 "Dg!g[ Price" - The ctrrent monthns Mid€olumbia Market Energy Cost minus the current month's All
Hours Enerry Price specified in paragraph ?.3 of this Agreement. If this calculation results in a value
less than 0, the result of this calculation will be 0.
1.7 "Desienated Dispatch Facility" - Idaho Power's Systems Operations Group, or any subsequent group
designated by Idaho Power.
1.8 "FagiliE' - That electric generation facility described in Appendix B of this Agreement.
1.9 "FirsLEggISU-Datg" - The day comrencing at 00:01 hours, Mountain Time, following the day that
Seller has satisfied the requirements of Article IV and the Seller begns delivering energy to Idaho
Power's systeNn at the Point of Delivery.
l.l0 "tlgqry-Ioed.-Hqug" - The daily hours beginning atl:Nam, ending at I l:00 pm Mormtain Time, (16
hours) excluding all hours on all Sundays, New Years Day, Memorial Day,Iadependence Day, Labor
Day, Thanlagving and Christmas.
l.l I "Inadverten9Energt''* Elechic energy Seller does not intend to generate. Inadvertent elrergy is more
particularly described in par:igraph 7.5 of this Agreement.
l.l2 "Interconnection Facilities'- All equipme,nt specified in schedule 72.
l.l3 "Initial CaDacity Det€rminatiod'- The process by which ldaho Power confirms that under nomal or
average design conditions 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 1UgLLOed Hslrs" - The daily hours beginning at I l:00 pm, e,nding at 7:00 am Mormtain Time (8
hours), plus all other hours on all Sundays, New Years Day, Memorial Day, Independence Day, Labor
Day, Thanlsgiving and Christmas.
I . I 5 "Losses" - The loss of elwtrical energy expressed in kilowatt hours (kWh) occurring as a result of the
transforrnation and fransmission of e,nergy between the point where the Facility's ener$/ is metered and
the point the Facility's energy is delivered to the Idaho Power elechical system. The loss calculation
fonnula will be as specified in Appendix B of this Agreement.
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1.15
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1.I8
1.19
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1.24
"Market Energy Re.ference Price" - Eighty-five percent (85%) ofthe Mid{olumbia Market Energy
Cost.
"Matetrd-Bred" - A Default (paragraph 19.2.1) subject to paragaph 19.2.2.
"Maximum Caoacity Amounfn - The maximum capacrty (MW) of the Facility will be as specified in
Appendix B of this Agreement.
"Metefi!g_Eqg!@. - All equipment specified in Schedule 72, this Agreement and any additional
equipment specified in Appendix B required !o measure, record and telemeterbi directional power
flows between the Seller's elecfiic generation plant and Idaho Power's system.
"Mid- Colurrbia Markd Ercry '- The monthly weighted aversge of the daily on-peak and off-
peak Dow Jones Mid{olumbia Index (Dow Jones Mid-C Index) prices for non-firm enerry. If the Dow
Jones Mid{olumbia Index price is discontinued by the reporting agency, both Parties will mutually
agree upon a replacernent index, which is similar to the Dow Jones Mid{olumbia Index. The selected
replacement index will be consiste,nt with other similar agreements and a commonly used index by the
electrical industry.
'@-!ete_eegi5d'-The full-load electical quantities assigned by the designer to a generator and its
prime mover or other piece of electrical equipmenl such as fiansformers and circuit breakers, rmder
standardized conditions, exprcssed in amperes, kilovolt-amperers, kilowatts, volts or other appropriate
units. Usually indicated on a nameplate attached to the individual machine or device.
EESgg]'- All of the electric energy produced by the Facility, less Station Use, less Losses,
expressed in kilowatt hours (kWh). Subject to the temrs of this Agreement, Seller commits to deliver all
Net Energy to Idaho Power at the Point of Delivery for the full tern-r of the Agreement. Net Energt does
not include Inadvertent Energy.
"Operation Date" -The day commencing at 00:01 hotus, Mountain Time, following the day that all
requirements of paragraph 5.2 have been completed.
"Esint_efDslivery" - The location specified in Appendix B, where ldatro Power's and the Seller's
electrical facilities are interconnected and the energy from this Facility is delivered to the Idaho Power
electrical system.'3- sng*oto
l-25 "Prudsnt Elecfical Practices" - Those practices, methods and equipment that are comrnonly and
ordinarily used in elechical engineering and operations to operate electic equipment lawfully, safely,
dependably, efficiently and economically.
1.26 "Scheduled Operation Date" - The date specified in Appendix B when Seller anticipates achieving the
Operation Date. It is expected that the Scheduled Opration Date provided by the Seller shall be p
reasonable estirnate of the date that the Seller anticipates that the Seller's Facility shall achieve the
Operation Date
l-27 "Eghedule-72" - Idaho Power's TariffNo l0l, Schedule 72 or iu successor schedules as approved by
the Commission. The Seller shall be responsible to pay all costs of interconnection and integratiou of
this Facility into the ldaho Power electrical system as specified within Schedule 72.
1.28 o'season" - The thee p€riods identified in paragraph 6.2.1 of this Agreement.
1.29 "S@Egeilities.. - Additions or alterations oftransmission and/or dishibution lines and transformers
as described in Schedule 72.
1.30 "Station Use" - Elechic energy that is used to operate equipment that is auxiliary or otherlvise related to
the production of electricity by the Facility.
I .3 I "lurplus JEgrg" - Is ( I ) Net Enerry produced by the Seller's Facility and delivered to the Idaho Power
electrical system during the month which exceeds I l0% of the monthly Net Energy Amount for the
correspmding month specified in pragraph 6.2. or (2) If the Net Energy produced by the Seller's
Facility and delivered to thc Idaho Power electrical system during the month is less than 90% of the
monthly Net Energr Amount for the corresponding month specified in paragraph 6.2, then all Net
Energy delivered by the Facility to the Idaho Power electrical system for that given month or (3) All Net
Enerry produced by the Seller's Facility and delivered by the Facility to the ldaho Power elechical
system prior to the Operation Date.
1.32 "Total Cost of the Fasility" - The total cost of structures, equipment and appurtenances.
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2.1
2.2
3.1
3.2
4.1
ARTICLE II: NO RELIANCE ON EAHO POWER
Se[er Indepe.ndent Investigation - Seller warrants and represents to Idaho Power that in entering into
this Agreement and the rmdertaking by Seller of the obligations set forth herein" Seller has investigated
and determined that it is capable of performing hereunder and has not relied upon the advice,
experie,lrce or expertise of Idaho Power in connection with the hansactions conte,mplated by this
Agreement.
Seller Independent Experts - All professionals or ex!€rts including, but not limited to, engiaeus,
attomeys or accountants, that Seller may have oonsulted or relied on in undertaking the transactions
contemplated by this Agreement have been solely those of Seller.
ARTICLE III: WARRANTIES
No Warranty by Idahq-Power - Any rwiew, acceptance or failure to review Seller's desigA
specifications, equipment or facilities shall not be an endorsement or a confinnation by Idaho Power and
Idaho Power makes no warranties, expressed or implied, regarding any aspect of Seller's design,
specifications, equipment or facilities, including, but not limited to, safety, durability, reliability'
strength, capacity, adequacy or economic feasibility.
Ouali&ing Facility Status - Sellerwarrants that the Facility is a "Qualifying Facility," as that tenn is
used and defined in l8 CFR 292.201et seq. After initial qualification, Seller will take such steps as may
be required to maintain the Facility's Quali&ing Facility status during the term of this Agreement and
Seller's failure to rnaintain Qualifying Facility status will be a Material Breach of this Agreement.
Idaho Power reserves the right to review the Facility's Qualiling Facility status and associated support
and compliance docume,lrts at anytime during the term of this Agteement'
ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
Prior to the First Energy Date and as a condition of Idaho Power's aoceptance of deliveries of mergy
from the Seller rmder this Agreement, Seller shall:
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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, inctuding, but
not limited to, evidence of compliance with Subpart B, 18 CFR 292.201et seq. as a certified
Quali$'ing FacilitY'
4.1.2 Opinion of Counsel - Submit to ldaho Power an Opinion Letto signed by an attomey admitted
to practice and in good standing in the State of Idaho providing an opinion that Seller's lice,nses,
permits and approvals as set forth in paragraph 4.1.1 above are legally and validly issued, are
held in the name of the Seller and, based on a reasonable independent review, counsel is of the
opinion that Seller is in substantial compliance with said perurits as of the date ofthe Opinion
Letrer. The Opinion Irtter will be in a fomr acceptable to Idaho Power and will acknowledge
that the attorney rendering the opinion understands that Idaho Power is relyrng on said opinion.
Idaho Power's acceptance of the form will not be unreasonably withheld. The Opinion Letter
will be govemed by and shall be in accordance with the legal opinion accord ofthe
American Bar Association Section of Business Law (1991).
4.1.3 Initial Caoacity Detennination - Submit to Idaho Power such data as Idaho Powermay
reasonably require to perform the Initial Capacity Determination. Such data will include but not
be limited to, Nameplate Capacity, equipment specifications, prime mover data, resource
characteristics, normal and/or average operating design conditions and Station Use data. Upon
receipt of this information, Idaho Power will review the provided data and if necessary, request
additional data to complete the Initial Capacity Determination within a reasonable time,
4.1.3.1 If the Maximum Capacity specified in Appendix B of this Agreement and the
cumulative manufacture Nameplate Capacity rating of the individual generation uoits at
this Facility is less than l0 MW. The Seller shall submit detaile4 manufactur€r,
verifiable data of the Nameplate Capacity ratinp ofthe actual individual generation
units to be installd at this Facility. Upon verification by Idaho Power that the data
provided establishes the combined Nameplate Capacity rating of the generation units to
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4.t.4
be installed at this Facility is less than l0 MW, it will be deemed that the Seller has
satisfied the Initial Capacity Determination for this Facility.
Nameplate Capaciry - Submit to Idaho Power nranufacturer's and engineering documentation
that establishes the Nameplate Capacity of each individual generation unit that is included
within this entire Facility. Upon receipt of this data" Idaho Power shall review the provided data
and determine if the Nameplate Capacity specified is reasonable based upon the manufacturetr's
specified generation ratings for the specific generation units.
Epgineer's Certifications - Submit an executed Engineer's Certification of Design &
Conshrction Adequacy and an Engineer's Certification of Operations and Mainte,nance (O&M)
Policy as described in Commission Order No.21690. These certificates will be in the fonn
specified in Appendix C but may be modified to the extent nscessary to recognize the differe,lrt
engineering disciplines providing the certificates.
lnsurance - Submit written proof to lda]ro Power of all insurance required in Article )iltr.
Interconnection * Provide writen confirrnation from Idatro Power's delivery business unit that
Seller has satisfied all interconnection requirements.
Network Resource Designation - The Seller's Facility has been designated as a network
resource capable of delivering firm enerry up to the anrount of the Maximum Capacity.
]Vritten Acceptance - Request and obtain written confirrnation from Idaho Power that all
conditions to acceptance of e,nergy have been fulfilled. Such written confimntion shall be
provided within a cornrnercially reasonable time following the Seller's request and will not be
umeasonably withheld by Idaho Power.
4.t.5
4.t.6
4.1.7
4.1.8
4.1.9
5.1
ARTICJ,E V: TERM AND 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 exceed 20 years)
Contract Years from the Operation Date.
-7-
ilt9DArc
5'2 ooeration Date - The operation Date may occur only aftbr the Facility has achieved all of the following:
a) Achieved the First Energy Date.
b) Commission approval of this Agreement in a fomr acceptable to Idaho power has been
received.
c) Seller has demonstrated to Idaho Power's satisfaction that the Facility is complete and able
to provide enerry in a consisten! reliabre and safe rnanner.
d) Seller has requested an Operation Date from Idaho Power in a written format.
e) Seller has received writt€n confirmation from Idaho Power of the Operation Date. This
confirmation will not be unreasonably withheld by Idatro power.
5'3 operation Date Delay - Seller shall cause the Facility to achieve the operation Date on or before the
Scheduled Operation Date. Delays in the interconnection and transmission network upgrade study, design
and constnrction prooess that are not Force Majeure events accepted by both parties, shall not plevent
Delay Liquidated Damages from being due and 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 e,nd of each calendar month after the Scheduled Operation Daie as
follows:
5.4
Delay Liquidated Damages 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 curre,nt
month) multiplied by the number of days in the Delay Period in the currgnt month)
multiplied by the current month's Delay price.
5'3'2 tf the operation Date does not occur within ninery (90) days following the Scheduled operation
Date the Seller shall pay Idaho Power Delay Liquidated Darnages, in addition to those provided
in paragraph 5.3.1, calculated as follows:
Forty five dollars ($45) multiplied by the Maximum Capacity with the Ma,rimum
Capacity being measured in kW.
If Seller fails to achieve the Operation Date within ninety (90) days following the Scheduled Operation
-8-
5n9t20t0
Date, such failure will be a Material Breach and Idaho Power may terminate this Agreement at any time
until the Seller crues the Material Breach. Additional Delay Liquidated Damages beyond those
calculated in 5.3.1 and 5.3.2 will be calculated and payable using the Delay Liquidatul Damage
calculation described in 5.3.1 above for all days sxsseding 90 days past the Scheduled Operation Date
until such time as the Seller cures this Material Breach or ldaho Power terminates this Agreement.
5.5 Seller shall pay Idatro Power any calculated Delay Daurages or Delay Liquidated Darnages within 7
days of when Idatro Power calculates and presents any Delay Damages or Delay Liquidated Damages
bi[ings to the Seller. Seller's failure to pay these damages within the specified time will be a Mat'erial
Breach of this Agreement and Idabo Power shall draw fimds from the Delay Security provided by the
Seller in an amount equal to the calculated Delay Damages or Delay Liquidated Damages'
5.6 The Parties agree that the damages Idaho Power would incur 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 cotainty, and that the Detay Liquidated Darnages are an appropriate approximation of such
damages.
5.7 prior to thg Seller executing this Agreement, the Seller shall have ageed to and executed a Leffier sf
Understanding with ldaho Power that contains at minimum the following requirements:
a) Seller has filed for interconnection and is in compliance with all paymeots and
requirements of the interconnection process
b) Seller has received and accepted an interconnection feasibility study for this
Facility.
c) Seller has provided all information required to enable Idaho Power to file an initial
transmi ssi on capacity request.
d) Resuls of the initial fiansmission 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 transmission capacity to enable the project
to be classified as an Idaho Power firm network resource'
-9' sttgt2oto
5.8
0 If the Facility is located outside of the Idaho Power service tenitory, in addition to
the above requirements, the Seller must provide evidence that the Seller has
acquired finn transmission capacity from all required transmitting entities to deliver
the Facility's energ/ to an acceptable point of delivery on the Idaho Power
electrical system.
within thirty (30) days of the date of a final non-appealable order as specified in Article )Oil approving
this Agreement ttre Seller shall post liquid security (.:Delay Security,) in a form as described in
Appendix D equal to or exceeding the amount calcurated in paragraph 5.g.1.
5.8'l Delay Security The greater of forty five ($45) multiplied by the Maximum Capacity with the
Maximum Capacity being measured in kW or the sum of three month's estimated reveflue.
Where the estimated three months of revenue is the estirnated revetrue associated with the first
three full months following the estimated Scheduled Operation Date, the estimated kWh of
eners/ production as specified in paragraph 6,2.1 for those three months multiplied by the All
Hours Energy Price specified in paragraph 7.3 for each of those thee months.
5.8.1.1 In the event (a) Seller provides Idaho Power with certification that (l) a generation
interconnection agreement specifiing a schpdule 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) a generation interconnection
agreement is substantially conptete and all material costs of interconnection have been
identified and agreed upon and the Seller is in compliance with all terms and
conditions of the generation interconnection agreement, the Delay Security calculated
in accordance with paragraph 5.8.1 will be reduced by ten percent (lW/o)-
5-8.1.2 If the Seller has received a reduction in the calculated Delay Security as specified in
5.8.1'1 and subsequently (l) at Seller's reguest, the generation
interconnection agreement specified in paragraph 5.8.1.1 is rerrised and as a result the
Facility will not achieve its Operation Date by the Scheduled Operation Date or (2) if
the Seller does not maintain compliance with the generation interconnection agreemenf
. 10-
5/19t2010
the full anrount of the Delay Security as calculated in paragraph 5.8.1 will be subject tb
reinstatement and will be due and owing within 5 business days from the date ldaho
Power requests reinstatement. Failure to timely reinstate the Delay Security will be a
Material Breach of this Agreement.
5.8.2 Idaho Power shall release any rernaining security posted herermder after all calculated Delay Damages
and/or Delay Liquidated Damages are paid in full to Idaho Power and the earlier of (l) 30 days after the
Operation Date has been achieved or (2) 60 days after the Agreement has been terminated.
6,t
ARTICLE VI: PI.JRCHASE A}.TD SALE OF NET ENERGY
Delivery and Acceptance of Net Energv - Except when either Party's performance is excused as
provided herern, Idaho Power will purchase and Seller will sell all of the Net Energy to Idaho Power at
the Point of Delivery. All Inadvertent Energy produced by the Facility will also be delivered by the
Seller to Idatro Power at the Point of Delivery. At no time will the total amount of Net Enerry and/or
Inadvertent Energy produced by the Facility and delivered by the Seller to the Point of Delivery exceed
the Maximum Capacity Amount.
Net Enerp Amounts - Seller intends to produce and deliver Net Energy in the following monthly
amounts:
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6.7
6.2.1 hitial Year Monthly Net Ener€y Amounts:
Month
Season I
March
April
May
Season 2
July
August
November
December
June
Septerrber
October
January
February
kwh
648,000
648,000
648,000
648,000
649,(m0
648,000
648,000
648,000
649,000
648,000
649,000
648,000
Season 3
6.2.2 Ongoine Monthly Net Encrgv Amounts - Seller shall initially provide Idaho power with one
year of monthly generation estimates (Initial Year Monthly Net Energ;r Amounts) and
beginning at the end of month nine and every three months thereafter provide Idaho power with
an additional three months of forward generation estimates beyond those generation estimates
previously provided. 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 56 day following the end of the
previous month. If the Seller does not provide the Ongoing Monthly Net Enerry Amormts in a
timely mann€r, 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 Energ5r
anrolmts.
6.2.3 Seller's Adjustment of Net Energ.v Amount
6.2.3.1 No later than tte Operation Date, by written notice glven to ldaho 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 mouth after the Operation Date and at tho end of
every third month thereafter: (l) the Seller rray not revise the immediate next three
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5/19/2010
6.2.4
months of previously provided Net Energy Amounts, (2) but by written notice given to
Idaho Power iu accordance with paragraph 25.1, no later ttran 5:CI PM of the 5s day
following the end of the previous month, the Seller may revise all other previously
provided Net Energy Amounts. Failure to provide timely written notiee of changed
amounts will be deemed to be an election of no change.
Idaho Power Adjustnent of Net Enerqr 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 ldatro Power, the Net Enerry Amorurt as specified in
paragraph 6.2 for the specific month in which the rduction or suspe,nsion under paragraph
12.2.1 or 12.3.1 occurs will be reduced in accordance with the following:
Where:
NEA = Current Month's Net Energy Amount (Paragtaph 6.2)
SGU =a.) If Idaho Power is excused from accepting the Seller's Net
Energy as specified in paragraph 12.2.1 this value will be
equal to the percentage of curtailment as qpocified by
Idaho Power multiplied by the TGU as defined below.
b.) If the Seller declarcs a Suspension of Energ5r Deliveries as
specified in paragraph 12.3.1 this value will be the sum of
the individual generation units size ratings as specified in
Appendix B that are impacted by the circumstances
causingthe Sellerto declare a Suspension ofEnergy
Deliveries.
TCU = Sum of all of the individual generator ratings of the generation
units at this Facility as specified in Appendix B of this
agreement.
Dorr Actual hours the Facility's Net Energy deliveries were eitherrsDrr reduced or suspended under paragraph 12.2.1 or L2.3.1
TH = Actualtotalhor.usinthecunentmonth
- 13-
5lt9l20L0
Resultinp formula being:
Adiusted
Nei Energy = NEA
Amount ((TGU TH )))X NEA x
6.3
7.1
This Adjusted Net Energy Amount wil be used in applicable Surplus EnergSr calculations for only the
specific month in which Idaho Power was excused from accepting the Seller's Net Enerry or the Seller
declared a Suspension of Enerry.
Unless excused by an event of Force Majeure, Seller's faihne to deliver Net Energy in any Conhact
Year in an amount equal to at least ten percent (l}o/o) of the sum of the Initial Year Net Energy
Amounts as specified in paragraph 6.2 strall constitute an event of default.
ARTICLE VIT PURCHASE PRJCE AND METHOD OF PAYMENT
Base Energy Heavy Load Purchase Price - For all Base Enerry received during Hea,ry Load Hours,
Idaho Power will pay the nonJevelized energy price in accordance with Commission Order 3074,
30738 and adjusted in accordance with Conunission Order 30415 for Heavy tnad Hour Energy
deliveries with seasonali zation factors applied:
Yeer
2010
20il
2012
2013
2014
2015
2016
20t7
2018
20t9
2020
2021
2022
2023
2024
2025
2026
2027
Season l -(73.50W
Mtxykwh
57.98
s9.54
61.22
62.62
64.05
65.52
67.rc
68.63
70.29
71.91
73.56
75.26
76.99
78.78
80.60
82.47
u.75
87.10
Season 2 -(l20.NW
MlIls/kWh
94.67
97.21
99.95
t02.23
rM.57
rc6.97
109.55
I12.05
114.77
t17.40
120.10
122.87
Q5.7A
r28.61
131.59
134.65
138.37
142.21
Season3-(100.00%)
M|IIsftWh
78.89
81.0r
83.29
8s.t9
87.14
89.14
91.29
93.38
95.il
97.83
100.08
102.39
lM.75
107.18
109.66
fiz.2t
I 15.31
I18.51
- t4-
5lt9/201o
2028
2029
2030
2031
89.s3
92.03
94.60
96.69
146.t7
150.25
154.45
157.85
121.81
125.2t
128.7r
131.55
7.2
7.3
Year
2010
201 I
20t2
2013
2014
2015
2016
2At7
2018
2019
2020
2A2t
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Base EnerEy Light Load Purchase Price - For all Base Enerry receivd during Light Load Hours, Idaho
Power will pay the nonJevelized energy price in accordance with Commission Order 3074,30738 and
adjusted in accordance with Commission Order 3O415 for Light Load Hour Energy deliveries with
seasonalization factors applied :
Season | -(7t.50o1.d
Mills/kWh
52.63
54.19
s5.87
57.27
58.70
60.17
61.75
63.28
G.94
66.56
68.21
69.90
7t.u
73.42
7s.25
77.12
79.q
81.75
84.18
86.68
89.25
91.33
Season 2-(120.A0W
Mlllsft\Uh
85.93
88.47
91.2t
93.49
95.83
98.23
r00.81
r03.32
106.03
108.66
I I1.36
1 14,13
r16.97
l19.88
122.86
125.91
129.U
133.48
137.43
141.51
145.7t
t4g.t2
Season3 -(100.0070)
MiltqBWh
71.6t
73.73
76.O1
77.91
79"86
81.86
84.01
86.10
88.36
90.5s
92.80
95.11
97.47
99.90
102.38
104.93
108.03
lll.23
l14.53
t17.93
12t.43
124.27
All Hours Energy Price - The price 0o be used in the calculation of the Surplus Energy Price and Delay
Darrage Price shall be the nonJevelized energy price in accordance with Commission Order 30744 md
30738 with seasonalization factors applied:
- 15-
5lt9l20w
Yerr
2010
20tt
20t2
2013
2At4
20I5
24rc
2017
2018
2019
2020
202t
2022
2423
2024
2025
2026
2027
2028
2029
2030
2031
Season I -(73.50o/o)
Mills/kWh
55.60
57.t6
58.84
60.24
6t.67
63.t4
64.72
66.25
67.91
69.53
71.18
72.87
74.61
76.39
78.22
80.09
82.37
u.72
87.15
89.64
92.22
94.30
Season 2 -(120.00aA
Miltykwh
90.78
93,32
96.06
98.34
r00.68
103.08
105.66
108.17
I10.88
I13.51
fi6.2t
I18.98
r21.82
124.72
127.71
130.76
134.49
t38.32
142.28
146.36
150.56
153.97
Season3-(100.00%)
Mllls/kWh
75.65
77.77
80.05
81.95
83.90
85.90
88.05
90.14
92A0
94.59
96.U
99.15
101.51
1o3.94
t06.42
108.97
1t2.07
t15.27
I18.s7
121.97
12s.47
128.3r
7.4
7.5
Surplus Enerey Price - For all Surplus Enerry, Idaho Power shall pay to the Seller the current month,s
Market Energy Reference Price or the All Hours Enerry Price specified in paragrryh 7.3, whichever is
lower.
Inadvertent Enerw-
7.5.1 Inadvertent Energy is electric enerry produced by the Facility, expressed in kWh, which the
Seller delivers to ldaho Power at the Point of Delivery that exceeds 10,000 kW multiplied
by the horus in the specific month in which the energy was delivered. (For example
January contains 744 hours. 744 hours times 10,000 kw = 7,gs,000 kwh. Enerry
delivered in January in excess of '7,40,0@ kWh in this example would be Inadvertent
Energy.)
7.5.2 Although Seller intends to desigu and operate Ore Facility to generate no more than
l0 average MW and therefore does not intend to genemte Inadvertent Energr, Idaho Power
- 16-
5/t9a0t0
will accept Inadvertent Energy that does not exceed the Maximum Capacrty Amount but
will not purchase or pay for Inadvertent Energy.
7.6 Payment Due Date - Undisputed Energy pa5rments, less any paymetrts due to Idaho Power will be
disbursed to the Seller within 30 days of the date which Idaho Power rcceives and accepts the
documentation of the monthly Net Energy actually delivered to Idaho Power as specified in
Appendix A.
7,7 Continuing Jurisdiction of the Commission .This Agreement is a special contract and, as srrch, the rates,
ternrs and conditions contained in this Agreement will be construed in accordance with Idaho Power
Company v. Idatro Public Utilities Commission and Afton Enerey. Inc., 107 ldaho 781, 693 P.zd 427
(1984), Idaho Power Company v. Idaho Public Utilities Commissjo,u 107 Idatro ll22,695 P.zd I 261
(1985), Afton Energy. Inc. v. Idatro Power Company. I I I Idaho 925,'129 P.2d 400 (1986), Section 210
of the Public Utilities Regulatory Policies Act of 1978 and t8 CFR $292.303-308
ARTICLE VIII: ENVIRONMENTAL ATTRIBUTES
8.1 Seller retains ownership under this Agreement of Green Tags and Renewable Energy Certificate
(RECs), or the equivalent environmental attributes, directly associated with the production of enerry
from the Selle/s Facility sold to Idaho Power.
ARTICLE IX: FACILITY AND INTERCONNECTION
9.1 Design of Faciliw - Seller will design, construc! inshll, own, operate and maintain the Facility and any
Seller-owned Interconnection Facilities so as to allow safe and reliable generation and delivery of Net
Euergy and Inadvertent Energy to the Idatro Power Point of Delivery for the full term of the Agreernent.
ARTICLE X: METERNG ANQ TELEMETRY
10.1 Metering - Idaho Power shall, for the account of Seller, provide, install, aad maintain Metering
Equipment to be located at a mutually agreed upon location to record and measure pow€r flows to Idaho
Power in accordance with this Agreement and Schedule 72. The Metering Equipment will be at the
_ t7_
5119120rc
location and the 6'pe required to measure, record and report the Facility's Net Energy, Statiom Use,
Inadvertent Energy and maximum enerry deliveries (kW) at the Point of Delivery in a mannerto
provide Idaho Power adequate enerry measurement data to administer this Agreement and to integrate
this Facility's energy production into the Idaho power electrical systenr-
l0'2 Telemetry - Idaho Power will install, operate aod maintain at Seller's expense communications and
telemetry equipment which will be capable of providing Idaho Power with continuous instantaneous
telemetry of Seller's Net Enerry and Inadvertent Enerry produced and delivered to the Idaho Fower
Point of Delivery to ldaho powe/s Designated Dispatch Facility.
ARTICLE XI - RECORDS
I l'l Maintenance 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 Energy and maximum
generation (kw) records in a form and content acceptable to Idaho power.
ll'2 Inspection - Either Party, after reasonable notice to the other Party, shall have the right, durfug uormal
business hours, to inspect and audit any or all generation, Net Energy, Station Use, Inadvertent Enerry
and maximum generation (kw) records pertaining to the seller's Facility.
ARTICLE XII: OPERATIONS
12 'l Communications ' Idaho Power and the Seller shall maintain appropriate ope,rating communications
through Idaho Power's Designated Disparch Facility in accordance with Appendix A of this Agreement.
12 .2 Energrv Acceptance -
12.2.1 Idaho Power shall be qcused fiom accepting and payrng for Net Energy or accepting
Inadvertent Energy which would have othenvise 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 Force
Majeure, or temporary disconnection of the Facility in accordance with Schedule 72. If, for
reasons other than aD event of Force Majeure, a temporary disconnection under Schedule 72
exceeds twenty (20) days, beginning with the twenty-first day of such internrption, curtailment
- t8-
5lt9/201o
a
or reduction, Seller will be deerned to be delivering Net Energy at e rate equivaleirt to the pro
rata daily avera€e of the amounts specified for the applicable month in pragraph 6.2. Idaho
Power will notify Seller when the intemrption, curtailment or reduction is terminated.
12,2.2 tf,in the reasonable opinion of Idaho Power, Seller's operation of the Facility or Interconnection
Facilities is unsafe or 111ay otherwise adversely affect Idatro Power's equipment, personnel or
service to its customers, ldaho Power may temporarily disconnect the Facility from Idaho
Power's transmission/disfiibution syst€m as specified within Schedule 72 ot take such other
reasonable steps as Idaho Power deems appropriate'
12.2.3 Under no circumstances will the Seller deliver Net Energy and/or lnadvertent Energr from the
Facility to the Point of Delivery in an amormt that exeeeds the Ma,rimum Capacity Arnount.
Seller's failure to limit deliveries to the Maximum Capacrty Amount will be a Materiat Breach
of this Agreement.
12.2.4 lf Idaho Power is unable to accept the energy from this Facility and is not excused fiom
accepting the Facilityls enerryr Idaho Power's damages shall be limited to only the value of the
estirnated energy that Idaho Power was rmable to accept. Idaho Power will heve no
responsibility to pay for any other costs, lost revenue or consequential damages the Facility may
incur.
123 Seller Declared Suspengion of Energy Deliveries
12.3.t tf the Seller's Facility experiences a forced outage due to equiprnent failtue which is uot caused
by an event of Force Majeure or by neglecl disrepair or lack of adequate preventative
maintelrance of the Sello's Facility, Seller may, after giving notice as provided in paragraph
12.3.2 below, temporarily suspend all deliveries of Net Energy to Idaho Power from the Facility
or from individual generation unit(s) within the Facility impactd by the forced outage for a
period ofnot less than 48 hours to correct the forced outage condition (.'Declared Suspension of
Energy Deliveries"). The Seller's Declared Suspension of Energy Deliveries will begin at the
start of the next full hour following the Seller's telephone notification as specified in paragraph
12.3.2 and will continue for the time as spified (not less than 48 hours) in the writt€n
- 19- 5^grzoro
notification provided by the Seller. In the month(s) in which the Declared Suspension of Energy
occurred, the Net Energy Amount will be adjusted as specffied in paragraph 6.2.4.
12.3.2 If the Seller desires to initiate a Declared Suspension of Energy Deliveries as provided in
paragraph 12.3.1, the Seller will notify the Designated Dispatch Facility by telephone. The
beginning hour of the Declared Suspension of Enerry Deliveries will be at the earliest the next
full hour after making telephone contact with Idaho Power. The Seller will, wittrrn 24 hours
after the telephone contact, provide Idaho Power a written notice in accordance with )OilV that
will contain the beginning hour and duration of the Declared Suspension of Energy Deliveries
and a descripion of the conditions that caused the Seller to initiate a Declared Suspension of
Energy Deliveries. Idaho Power will review the docurnentation provided by the Seller to
deterrnine ldaho Power's accqrtance of the described forced outage as qualiffing for a Declared
Suspension of Energy Deliveries as specified in paragraph 12.3.1. Idaho power,s acceptance of
the Seller's forced outage as an acceptable forced outage will be based upon the clear
documentation provided by the Seller that the forced outage is not due do an event ofForce
Majeure or by neglect, disrepair or lack of adequate preventative maintenance of the Seller,s
Facility.
l2'4 Scheduled Maintenance - On or before January 3l of each calendar year, Seller shall submit a unitteo
proposed maintenance schedule of significant Facility maintenance for that calendar year and Idaho
Power and seller shall mutually agree as to the acceptability of the proposed schedule. The parties
deterurination 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 prefened
schedule. Neither PartY shall unreasonably withhold acceptance of the p,roposed maintenance schedule.
l2'5 Maintenance Coordination - The Seller and ldatro Power shall, to the extent practical, coordinate their
respective line and Facility maintenance schedules such that they occur simultaneously.
12'6 Contagt Prior to Curtailment - Idaho Power will make a reasonable attempt to contact the Seller prior to
exercising its rights to interrupt interconnection or curtail deliveries from the Seller,s Facility. Seller
understands that in the case of emergency circumstances, real time operations of the electical systeaq
-20-
5t$/z0rc
and/or tgrplanned events Idaho Power may not be able to provide notice to the Seller prior to
intemrption, curtailmeni or reduction of electrical energy deliveries to Idaho Pows.
ARTICLE XIft INDEMNIFICATION AND INSURANCE
13.1 Indernnification - Each party shall agree to hold harmless and to indemnifr the other Party, its offtcers,
agents, affiliates, subsidiaries, parent company and enrployees against all loss, damagg expense and
liability to third penpns for injury to or death of person or injury to property, proximately caused by the
indemniffing Party's (a) consfiuctioq ownership, operation or maintenance of, or by failure of, any of
such Party's works or facilities used in connection with this Agreement or (b) negligent or intentional'
acts, errorr or omissions. The indemni&rng Party shall, on the other Parly's rcquest, defend any suit
asserting a claim covered by this indemnity. The indermiffing Party shall pay all documented costs,
including reasonable attorney fees that may be incurred by the other Party in enforcing this indernnity.
13.2 Insurance - Dtying the term of this Agreement, Seller shall secure and continuously carry the following
insurance coverage:
13.2.1 Comprehensive General Liability Insurance for both bodily injtry and property &rnage with
limits equal to $1,000,000, each occrurence, combined single limit. The deductible for swh
insurance shall be consistent with current Insurance Industry Utility practices for similar
property.
13.2.2 T\e above insurance coverage shall be placed with an insurance company with an A.M. Best
Company rating of A- or better and shall include:
(a) An endorsement narning Idaho Power as an additional insured 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 Idaho Power.
13.3 Seller to Provide Certificate of Insurancc - As required in paragraph 4.1.5 herein and anrnrally
thereafter, Seller shall furnish Idaho Power a certificate of insurance, together with the endorsements
required therein, evidencing the coverage as set forth above.
'21' s^gtzoro
t3.4 - Ifthe insuramce ooverage required by paragraph
13.2 shall lapse for any reason, Seller will irnmediately notifu Idatro 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 reinstate or replace the coverage will
constitute a Material Breach of this Agreement.
ARTICLE XIV: FORCE MAJEI.JRE
l4'l As used in this Agteement, "Force Majeuren'or "an event of Force Majeure" means any cause beyond
the control of the Seller or of Idaho Power which, despite the exercise of due diligence, sgch party is
unable to prevent or overcolne. Force Majeure includes, but is not limited to, acts of God, firc, flood,
storms, wars, hostilities, civil shife, strikes and other labor disturbances, earthquakes, fires, lightning
epidemicso sabotage, or changes in law or regulation occurring after the effective date, which, by the
exercise ofreasonable foresight such party could not reasonably have been expected to avoid and by the
exercise of due diligence, it shall be unable to overcome. If either Party is rendered wholly or in part
unable to perform its obligations under this Agreement because of an event of Force Majeure, both
Parties shall be excused from whatever performance is affected by the event of Force Majeure, provided
thu:
(l) The non-performing Party shall, as soon as is reasonably possible after the occrurence
of the Force Majeure, give the other Party written notice describing the particulars of
the occurrence.
@ The suspension ofperformance shall be ofno greater scope and ofno longer duration
than is requircd by the event of Force Majer.ne.
(3) No obligations of either Parly which arose before the occurrence causing the suspension
of performance and which could and should have been fully performed before such
occurence shall be excused as a result ofsuch occttrrence.
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ARTICLE XV: LIABILITY: DEDICATION
l5.l Limitation of Liabilitv. Nothing in this Agreement shall be construed to create any duty to, mY
standard of care with reference to, or any liability to any person not a Party to this Agreement. Neither
party shall be liable to the other for any indirec! special, consequential, nor punitive damages, except as
expressly authorized by this Agreement. Consequential damages will include, but not be limited to, the
value of re,lrewable energy certificate an{ if the Facility is fueled by gas pnrduced by an anaerobic
digester syst€trI, any diminution or loss of anaerobic activity due to the inability of Idaho Power to
accept energy from the FacilitY.
lS.2 Dedication No undertaking by one Party to the other under any provision of this Agreement shall
constihrte the dedication of that Party's system or any portion thereof to the Party or the public or affect
the status of Idaho Power as an independent ptrblic utility corporation or Seller as an independent
individual or entity.
ARTICLE XVI: SEVERAL OBLIGATIONS
Except where specifically stated in ttris Agreement to be otherwise, the duties, olligations and liabilities
of the parties are intended to be several and not joint or collective. Nothing contained in this Agreement
shall ever be construed to create an association, trust, partnership or joint venfilre or impose a trust or
partnership duty, obligation or liability on or with regard to either Party. Each Party shall be
individually and severally liable for its own obligtions under this Agreement.
r6.1
ARTICLE XVII: WAMER
17.t Any waiver at any time by either Party of its rights with respect to a default under this Agreeme'nt or
with respect to any other matters arising in connection with this Agreement shall not be deemed a
waiver with respect to any subsequent default or other rnatter.
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ARTICLE XVITI: CHOICE OF LAWS AND VENI.]E
l8.l This Agreement shall be conshued and interpreted in accordance with the laws of the State of Idaho
without reference to its choice of law provisions.
18.2 Venue for any litigation arising out of or related to this Agreement will lie in the Dishict Court of the
Fourth Judicial Dishict of Idaho in and for the Counry of Ada.
ARTICLE XD(: DISPUTES AND EEFAI,]LT
l9.l Disputes - All disputes related to or arising under this Agreemen! incllding, but not limited to, the
interpretation of the terms and conditions of this Agreement, will be submitted !o the Cornnrission for
resolution.
19.2 Nojice of Default
19.2,1 Defaults. If either Party fails to perform any of the terrrs or conditions of this Agreement
(an "event of default"), the nondefaulting Party shall cause notice in writing to be given to
the defaulting Party, speci&ing the rnaoner in which such default occurred. If the defaulting
Party shall fail to cure such default within the sixty (60) days after service of such notice, or
if the defaulting Party reasonably dernonstrates to ftre 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 nondeftulting Party may, at its option,
terminate this Agreement and/or pursue its legal or equiable remedies.
19.2.2 Material Breaches - The notice and cue provisions in paragraph 19.2.1 do not apply to
defaults identified in this as Material Breaches. Materiat Breaches must be curod
as expeditiously as possible following oocurrence of the b'rech.
19.3 Securi8 for Performance - Prior to the Operation Date and thereafter for the full term of this
Agreement, Seller will provide Idaho power with the following:
19.3.1 Insurance - Evidence of compliance with the provisions of par:agraph 13.2. If Seller fails to
comply, such failure will be a Material Breach and may only be cured by Seller supplying
evidence that the required insurance coverage has been replaced or reinstated;
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19.3.2 Engineer's Certifications - Every three (3) years after the Operation Date, Seller will supply
Idaho Power with a Certification of Ongoing Operations and Maintenance (O&M) from a
Registered Professional Engineer licensed in the State of ldaho, which Certification of
Ongoing O & M shall be in the form specified in Appendix C. Seller's failure to supply the
rc.quired certificate will be an event of defatrlt. Such a default may only be cured by Seller
providing the required certificate; and
19.3.3 Licenses and Permits - During the fulI term of this Agreement, Seller shall mainAin
compliance with all pemrits and licenses described in paragraph 4.1.1 of this Agreement. In
addition, Seller will supply Idaho Power with copies of any new or additional permire or
licenses. At least every fiffh Conffact Year, Sell€r will update the documentation described
in Paragraph 4.1.1. If at any time Seller fails to rnaintain compliance with the perrrits and
licenses described in paragraph 4.1.1 or to provide the documentation required by this
paragraph, such failure will be an went of default and may only be cured by Seller
submitting to Idaho Power evidence of compliance fiom the peruritting agency.
ARTICLE )O(: GOVERNMENTAL AUTHORJZATION
2O.l This Agrecment is subject to the jurisdiction of those governmental agencies having conhol over either
Parly of this Agreement.
ARTICLE )Ofl: CQMMISSION ORDER
2l.l This Agreement shall become finally effective upon the Cornnrission'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 rate, naking purposes.
ARTICLE D{II: SUCCESSORS AND ASSIGNS
22.1 This Agreement and all of the temrs and provisions hereof shall be binding upon and inure to the benefit
ofthe respective successoni and assigns ofthe Parties hereto, except that no assignment hereofby either
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Party shall become effective without the unitten consent of both Parties being first obtained" Such
consent shall not be unreasonably withheld. Notwithstanding the foregoing any parly which Idaho
Power may consolidate, or into which it *ay rrcrge, or to which it may convey or tansfer s,bstantially
all of its electric utility assetso shall automatically, without furttrer ac! and without need of coasent or
approval by the Seller, succeed to all of Idaho Power's rights, obligations and interests under this
Agreement. This artiole shall not prwent a financing entity with recorded or secured rights from
exercising all rights and remedies available to it under law or contract. Idaho Power shall have the right
to be notified by the financing entity ttnt it is exercising such rights or rrmedies.
ARTICLE XXIII: MODIFICATION
23.1 No modification to this Agreement shall be valid uoless it is in writing and signed by both parties and
subsequently approved by the Commission.
ARTICLE XXTV: TAXES
24-l Each Party shall pay before delinquency all taxes and other govemmental charges which, if failed to be
paid when due, could result in a lien upon th Facility or the Interconnection Facilities.
ARTICLE XXV: NOfiCES
25.1 All written notices under this Agreement shall be directed as follows and shall be considered
delivered when faxed, e-mailed and confirmed with deposit in the U.S. Mail, first-class,
postage prepaid, as follows:
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To Seller:
Orisinal docume,nt to:
Laura Knothe, PE
New EnergyThree, LLC
8720 Vic t ane
Middleton ID 83644
Telephone:Cell: [phone]FAX: (208) s85-9016
E-mail : [e-mail]
To Idaho Power
Orieinal docum€nt to:
Vice President, Power SupPlY
Idaho Power Company
PO Box 70
Boise,Idaho 83707
Email : [e-mail]
Copy of document to:
Cogeneration and Small Power Production
Idaho Power ComPanY
PtO Box 70
Boise, Idaho 83707
E-mail: rallphin@idphoPowercoq
Either party may change the contact p€rson and/or address information listed above, by providing writt€n notice
from an authorized p€rson representing the Party.
ARTICLE XXVT ADDITIONAL TERMS AND CONDITIONS
26.1 This Agreernent includes the following appendices, which are attached hereto and includd by
reference:
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 Agreement shall not affect the
validity or enforceability of any other terrns or provisions and this Agreement shall be constnred in all
other respects as if the invalid or uoenforceable terrr or provision were omitted.
ARTICLE )OffITI: COIJNTERPARTS
28,1 This Agreement may be executed in nno or morr cotrnterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instnrment.
ARTICLE XXD(: ENTIRE AGREEMENT
29.1 This Agreement constitutes the e,lrtire Agreement of the Parties concerning the subject Eatter hereof and
supersedes all prior or contemporaneous oral or written agreements betrneen the Parties conceming the
subject matter hereof.
IN WITNESS WHEREOF, The Parties hereto have caused this Agreement to be executed in
theirrespective names on the dates set forth below:
Idaho Power Company New EnerryThree, LLC
By By
Lisa A Grow
Sr. Vice President, Power Supply
Laura Knothe, PE
Dated 5L4 t c Dated
ID
*Idaho Powet''
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APPENDD( A
A -l MONTHLY POWER PRODUCTION AI'ID SMTCHING REPORT
At the end of each month the following required documentation will be submitted to:
Idaho Power Company
Attn: Cogeneration and Small Power Prodtrction
PO Box 70
Boise, Idaho 83707
The meter readings required on this re,port will be the readings on the Idaho Power Meter Equipment measuring
the Facility's total enerry production and Station Usage delivered to ldaho Power and the maximuur generated
e1rergy (kW) as recorded on the Metering Equipment andor any other required e,nergy measurements to
adequately administer this Agreement. This document shall be the docurnent to enable ldaho Power to begin the
energy payment calculation and palmrent process. The meter readings on this rcport shall not be used to
calculate the actual payment, but instead will be a check of the automated meter reading information that will be
gathered as described in iteur A-2 below:
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Ideho Power Company
Cogeneretion end Small Power produc{ion
MONTHLY PTOWER PRODUCTION AJ\ID SWTTCHING REPORT
Morth Yesr
ProJect Name
Address
Ctty
Project Number:
Phone Number:
Stets Zlp
Faclllty
0utout
Station
Ussqe
Stetion
Usaee
Metercd
Mrrtmum,Gcncndon
kw
Meter Number:
End of Month kWh Meter Reeding:
Beginning of Month kVYh Meter:
Dlfrerence:
Tlmes Meter Constrnt:
krrYh for the Month:
IVlcterrcd Demond:
Net C,enonfion
Breelrer Opening Record BrmkerCloslng Recold
I)ate Timc Meter *Rerson Date Tlme Meter
* Breelrer Ooenlns Re$on Codes
I Lrck of Adequate Prlme Mover2 Forced Outege of Faclllty3 Dbturbence of IPCo System4 Scheduled Maintenance5 Testlng of Protectlon Systems5 Cause Unknown7 (Xher (Explain)
I hereby cerd$ that the above meter rerdlngs are
true end correct es of Mtdntght on the last day of the
above month and that the switching record ls rceurete
and complete as required by the Flrm Energr Seles
Agreerncnt to whlch I am e Party.
Slgnature
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A-2 AUTOMATED METER READING COLLECTION PROCESS
Monthly, Idaho Power will use the provided Metering and Telemetry equipment and processes to coll*t the
meter reading inforrnation from the Idaho Power provided Metering Equipment that measures the Net En€rry
and enerry delivered to supply Station Use for the Facility recorded at 12:00 AM (Midrdgh$ of the last day of
the rnonth..
The meter inforrnation collected will include but not be limited to eNrerry production, Station Use, the rnaximum
generated power (k\ r) and any other required energy measurements to adequately administer this Agreement.
A.3 ROUTINE REPORTING
Once the Facility has achieved its Operation Date and has operated in a reliable and consistent mamer
for a reasonable period of time, the iarties may mutually agree to modiry this Routine Reporting
requirement.
ldaho Power Contact Infomnation
Daily Energv Production Reporting
Call daily by 10 a.m., l-80G.3564328 or 1-800{35-1093 and leave the follswing iqformation:
r Project ldentification - Project Name and Project Number
o CurrentMeterReading
o Estimated Generation for the current day
o Estimated Generation for the next day
Planned and Unplanned Project outaees
Call l-800-345-1319 and leave the following infonnation:
o Prqject lde,lrtification - Project Name and Project Number
o Approximate time outage occurredr Estimated day and time of project coming back online
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Sel ler's Contact Information
24-Hour Proiect Operational Contact
Name:
Telephone Number:
Cell Phone:
Jav Kestins
(208)e474ste
Q08\ss9424/-
Project On-site Contact information
Name: Kurt Standley
Telephoue Number: CiOg) 28Gl 16O
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APPENDD( B
FACILITY AND POINT OF DELTVERY
Project Name: Double B [lairy
Project Number: 3 1616120
8.1 DESCRIPTION OF FACILITY
(lhtst include the Nameplate Capacity rating and YAR capability (both leoding aad lagging) of all gewration
rmits to be incfuded in the Facility,)
The facility consists of an anasrobic digester, gen sets and wastp handling equipment. The total
nameplate capacity of the three generators is 2000 kW.
Var Capability @oth leading and lagging) Leading is .98 Lagging is .8.
B-2 LOCATION OF FACILITY
Near: Murtaugh,ID
Sections: 33Township: 10L Range: 2lEMilnerlDOuadrangle- County: Cassia ID.
Description of Interconnection Location:Near 1250 West I100 Murtauph- ID
Nearest Idaho Power Substation: BuclfiornSr$ptatigu
B-3 SCIIEDIJLED FIRST ENERGY AND OPERATION DATE
Seller has selected October l. 201I as the Scheduled First Energy Date.
Seller has selected Decen$er l. 2012 as the Scheduled Operation Date.
In making these selections, Seller recoguizes that adequate testing of the Facility and completion of all
requireme,lrts in paragraph 5.2 of this Agtreement must be completed prior to the prqject being granted
an Operation Due.
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84 MAXIMI.JM CAPACITY AMOUNT:
This value will be 2-MW which is consistent with the value provided by the Seller to Idaho Power in
accorrdance with Schedule 72. This value is the ma:rimum energy (MW) that potentially could be
delivered by the Seller's Facility to the Idaho Power elecrical system at any moment in time.
B-5 POINTOF DELIVERY
"Point of Delivery" m@ns, t rless othenrise agreed by both Parties, the pornt of where the Sellers
Facility's energy is delivered to the Idaho Power electrical systern. Schedule T2willdetermine the
specific Point of Delivery for this Facility. The Point of Delivery identified by Schedule 72 :1r11ltbecome
an integral part of this Agreement.
86 LOSSES
If the Idaho Power Metering equipment is capable of measuring the exact energy deliveries by the Seller
to the Idaho Power electrical system at the Point of Delivery, no Losses will be calculated for this
Facility. If the Idaho Power Metering is unable to measrue the exact en€rgJ deliveries by the Seller to
the Idaho Power elecrical system at the Point of Delivery, a Losses calculation wi[ b€ established to
measure the energy losses ftWh) between the Seller's Facility and the Idaho Power Point of Delivery.
This loss calculation will be initially set at 2%o of the kWh energy production recordd on the Facility
generation metering equipment. At such time as Seller provides Idaho Power with the elecrical
equipment specifications (hansformer loss specifications, conductor sizes, etc) of all of the electical
equipment betrreen the Facility and the ldaho Power electrical systern, Idaho Power will configure a
revised loss calculation formula to be agreed to by both parties and used to calculate the kWh Losses for
the remaining term of the Agreement. If at any time during the term of this Agreemen! Idaho power
determines that the loss calculation does not correctly reflect the actual kWh losses auributed to the
electrical equipment between the Facility and the Idaho Power electrical systenl Idaho Power may
adjust the calculation and retroactively adjust the previous months kWh loss calculations.
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8.7 METERING AND TELEMETRY
Schedule 72 will determine the specific metering and telemetry requirements for this Facility. At the
minimum the Metering Equipment and Telemetry equipment must be able to provide and record hourly
energy deliveries to the Point of Delivery and any other energy measurements required to administer
this Agreement. These specifications will include but not be limited to equipment specifications,
equipment locatiou Idaho Power provided equipment, Seller provided equipnent, and all costs
associated with the equipmen! design and installation of the Idaho Power provided equipment. Seller
will arrange for and make available at Sellet's cost communication ciicui(s) compatible with Idaho
Power's communications equipment and dedicated to Idaho Power's use terminating at the Idaho Power
facilities capable of providing Idaho Power with continuous instantaneous information on the Facilities
energy production. Idaho Power provided equipment will be owned and maintained by Idaho Power,
with total cost of purchase, installation, operation, and maintenance, including adminisbative cost to be
reimbursed to Idaho Power by the Seller. Payment of these costs will be in accordance with Schedule
72 and the total metering cost will be included in the calculation of the Monthly Operation and
Maintenance Charges specified in Schedule 72.
B-8 NETWORKRESOI.,IRCEDESIGNATION
Idaho Power caonot accept or pay for generation from this Facility until a Network Resource
Designation ('NRD-) application has been accepted by Idaho Power's delivery business unit. Federal
Energy Regulatory Commission C'FERC') Rules require Idaho Power to prspare and submit the NRD.
Because much of the information Idaho Power needs to prepare the NRD is specific to the Seller's
Facility, Idaho Power's ability to file the NRD in a timely manner is contingent upon timely receipt of
the required information from the Seller. Prior to ldaho Power beginning the process to enable Idaho
Power to submit a request for NRD status for this Facility, the Seller shall have completed all
requirenrents as specified in Paragraph 5.7 of this Agreement. Seller's failure to provide complete
and sccurate information in a timely mnnner can slgnilicantly impact Idaho Power's ebility and
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cost to ettaln the hlRD designafion for the Sdler's Frciltty rnd the Seller sbsll bear the cost' of
any of these detays thst arc a result of rny action or lnaction by the seller.
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APPENDD( C
ENGINEER'S CERTIFICATION
OF
OPERATIONS & MAINTENANCE POLICY
The undersigned , on behalf of himself ffid
-
,
-
hereinafter collectively referred to as "Engineer," hereby states and certifies to the Seller as follows:
1. That Engineer is a Licensed Professional Engineer in good standing in the State of ldaho'
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement," betwee,s Idaho
Power as Buyer, and as Seller, dat€d -
3. That the cogeneration or srnall power project which is the subject of the Ageernent and this
Statement is identified as IPCo Facility No.and is hereinafter referred to as the "Project."
4. That the Project, which is commonly known as the is located in
Section
-
Township
-
Range
-)Boise
MeridiarL County, Idaho.
5. That Engineer recognizes that the Agreement p,rovides for the Project to firmish electical erers/ to
Idaho Power for a year period.
6. That Engineer has substantial experience in the design, construction and ope,ration of elecfic power
plants of the same bpe as this hoject.
7. That Engineer has no economic relationship to the Design Engineer of this Project.
8. That Engineer has reviewd and/or supervised the review of the Policy for Operation and Maintenance
("O&M") for this Project and it is his professional opinion thaf provided said Project has been designed and
built to appropriate standards, adhereirce 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 period.
g. That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the Agreement, is
relying on Engineer's representations and opinions contained in this Statement.
'37' strgtzoto
l0' That Engineer certifies tlrat the above satements are complete, tnre and accurate to the bist 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
ONGOING OPERATIONS AI.ID MAINTENANCE
The undersigned on behalf of himself and
hereinafter collectively referred to as "Engineer," hereby states and certifies to
the Seller as follows:
t. That Engineer is a Licensed hofessional Engineer in good standing in the Sate of ldaho.
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreelne,n!" between Idsho
Power as Buyer, and
-
as Seller, dated
-.
g. That the cogeneration or srnall power production project which is the subject of the Agreement and this
Statement is ide,otified as IPCo Facility No. and heneinafter referred to as the *Projecf'.
4. That the Project which is cornmonly known as the is located in
County,Idaho.
5. That Engineer recognizes that the Agreement provides for the Project to furnish electical energy to
Idaho Power for a fifteen (15) year period.
6. That Engineer has substantial experience in the design, constuction and operation of electic power
plants of the same qpe as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this hoject.
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8. That Engineer has rnade a physical inspection of said Projeet, its operations and maintenance records
since the last previous certified inspection. It is Fngineer's professional opinion, based on the project's
appearance, that its ongoing O&M has been substaotially in accordance with said O&M Policy; that it is in
reasonably good operating condition; and that if adhereoce to said O&M Policy continues, the Project will
continue producing at or neaf, its design electrical outpuf efficieocy and plant factor for the remaining
years of the Agreement.
9. That Engineer recopizes that Idaho Power, in accordance with paragraph 5.2 of the Agreemen! is
relyrng on Engineer's representations and opinions contained in this statement.
10. That Engineer certifies that the above statements are cornplete, tnre and accurate to the best of his
knowledge and therefore sets his hand and seal below.
By
(P.E. Stamp)
Date
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(
APPENDX C
ENGINEER'S CERTIFICATION
OF
DESTGN & CONSTRUCTION ADEQUACY
The un&rsigned on behalf of himself and
hereinafter collectively refsrred to as "Engineer', hereby states and certifies to
Idaho Power as follows:
1. That Engineer is a Licensed Professional Engineer in good standing in the State of ldaho.
2. Thar Engineer has reviewed the Firm Enerry Sales Agreemen! hereinafter "Agreement"o
betrveen Idaho Power as Buyer, and asi Seller, dated ,
3. That the cogeneration or small power production project, which is the subject of the Agreemeut
and this Statement, is identified as IPCo Facility No_ and is hereinafter refenpd to as the
uProjecf'.
4. That the Project, which is comrnonly known as the is located in
Section _ Township _ Range _, Boise Meridian,County,Idaho.
5. That Fngrneer recognizes that the Agreement provides for the Project to furnish electrical
enersr to Idaho Power for a fifteen (15) year period.
6. That Engineer has substmtial experience in the design, construction and operation of electric
power plants of the same type as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this Project and has
made the analysis of the plans and specifications independently.
8. That Engineer has reviewed the engineering desigrr and construction of the hoject, including
the civil work, elechical work, generating equipment, prime mover conveyance system, Seller fumished
Interconnection Facilities and other Project facilities and equip,ment.
'41-
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9. That the Project has been constnrcted in accordance with said plans and specifications, all
applicable codes and consistent with Pnrde,nt Electrical Practices as that terrr is described in the Agreement.
10. That the design and constnrction of the Project is such that wittr reasmable and pnrdent
op,eration and maintenance practices by Seller, the Project is capable of performing in accordance with the terms
of the Agreement and with Prudent Electrical practices for a _ year period.
I l. That Engineer recognizes that Idaho Pow€r, in accordance with paragraph 5.2 of the Agreemeo!
in interconnecting the Project with its system, is relying on Engineefs represeffations and opinions contained in
this Statement.
12- That Engineer certifies that the above statements are cornplete, true and accurate to the best of
his knowledge and therefore sets his hand and seal below.
By
(P.E. Stamp)
Date
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I APPENDX D
FORMS OF LIQT.JTD SECT.ruTY
The Seller shall provide ldaho Power with commercially reasonable secuity instruments such as Cash
Escrow Security, Guarantee or Letter of Credit as those terms are defined below or other forms of liquid
financial security that would provide readily available cash to Idaho Power to satisfi the Delay Securi$
requirernent within this Agreement.
For the purpose of this Appendix D, the term "Credit Requireraents" shall meao acceptable financial
creditworthiness of the entity providlng the security instrurnent in relation to the term of the obligation
in the reasonable judgment of trdatro Powero provided that any guarantee and/or letter of credit issued by
any other entity with a short-term or long-term investment grade credit rating by Standard & Poor's
Corporation or Moody's Investor Services, Inc. shall be deemed to have acceptable financial
creditworthiness.
1. Cash Escrow Security - Seller shall deposit funds in an escnow account established by the Seller in
a banking institution acceptable to both Parties equal to the Delay Security.
2. Guarantee or Letter of Credit Security - Seller shall post and maintain in an aurount equal
to the Delay Security: (a) a guaranty from a party that satisfies the Credit Requireme,nts, in
a form acceptable to ldaho Power at its discretion, or (b) a Letter of Credit in a form
acceptable to Idaho Power, in favor of ldaho Power. The Letter of Credit will be iszued by
a financial institution acceptable to both parties.
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Office of the Secretary
Service Date
July l, 2010
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN TITE MA?TER OF THE APPLICATION
OF IDAIIO POWER COMPANTY FOR
APPROVAL OF A FIRM ENERGY SALES
AGREEMANT FOR TIIE SALE AND
PURCHASE OF ELECTRIC EI\TERGY
BETWEEN IDAIIO POWER COMPANY
AI\D IYEW ENERGY THREE, LLC (DOUBLE
B)
CASE NO. IPC.E-10.18
oRDER NO. 32027
on May 25, 2010, Idalro Power company (datro power; company) filed an
Application with the Idaho Public Utilities Commission (Commission) requesting approval of a
lS-year Firm Energy Sales Agreement betwee,n ldaho Power and New Energy Three, LLC dated
May 24, 20 I 0 (Agree,menQ.
AGREEMENT
Under the terms of the Agreeuren! New Energy will sell and Idaho Power purchase
electric energy generated by the Double B Dairy Anaerobic Digester Power Project (Facility)
located near Murtaugh in Cassia County, Idatro. The location of the Facility is more particularly
described as Section 33, Township l0 S, Range 21 E, Milner Quadrangle, Cassia County, Idaho.
Appendix B-2. New Energy warrants that the Facility is a qualiffing facility (QF) under
applicable provisions of the Public Utility Regulatory Policies Act of 1978 (PURPA). fl 3.2.
The nameplate rating of the Facility is 2 MW. Appendix B-1. The Ma:rimum
Capacity Amount is 2 MW. Appendix B-4. Under nonnal and/or average conditions, the
Facility will not exceed 10 aI\dW on a monthly basis. Should the Facility exceed 10 aIVIW on a
monthly basis, Idaho Power will accept the energy (Inadvertent Energy) that does not exceed the
Manimum Capacrty Amount; however, the Company will not purchase or pay for the Inadvertent
Energy. 117.5.
The Agreement contains the nonJevehzd, published avoided cost rates approved in
Order No. 30744 and comports with the terms and conditions of Order Nos. 30238 (SAR non-
fueled cost variables) and 30415 (daily load shape adjustmenQ. fl 7.1. New Energy has selected
a Scheduled Operation Date of December l,20lZ. Appendix B-3.
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Idaho Power notes that the purchase rates set forth in the Agreement, Order No.
30744, had on the May 24, 2OlO, date of confiact signing been replaced by the lower rates of
Order No. 30125 approved by the Commission on Mareh 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 agreeme,lrt
be executed prior to the change in rates; or (2) a meritorious complaint filed with the
Commission demonstrating project maturity and that but for the actions of the utility a sales
agreenrent would have bee,n signed prior to the change in rates. Although not filing a complaint
with the Commission, by signing the Agreement and voluntarily prese'nting 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.
In detennining 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 andTransmission
l.Filed an interconnection application; and
ii. Received and accepted an interconnection feasibility study report for
the project and paid any requested study 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 ffansmission capacity is
available for the project and/or received accepted transmission capacity
study 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 executed prior
to March 16,2010.
It is Idaho Power's opinion that the New Energy Facility meets all of the above-referenced
criteria. The Interconnection and Transmission criteria were met at the time the B6 Facility was
interconnected with Idaho Power to make sales of non-firm energy under the Schedule 86
Agreement.
oRDERNO.32027
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With respect to the Power Purchase Agreement crit€ria, the Company contends that
New Energy and Idaho 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 resource 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 internal process at Idaho Power. Idatro Power embarked
upon interpreting the regulations and implementing a process to be in compliance. kr Idatro
Power's opinion the Agreelnent would have been signed by both parties prior to March 16, 2010,
except for the time required by Idaho Power to implement the new intemal ffansmission and
network resource process and, as a result, the Facility should quatry for a contract including the
Order No. 30744 rates. New Energy is curre,lrt in all its interconnection study palmrents and so
long as New Energy continues to provide requested infonnation in a timely manner and pay
invoices on timg it appears that the interconnection car be completed in time forNew Energy to
achieve its Scheduled Operation Date for the Facility.
In further support of its request for grandfathdog, Idaho Power states that the
Facility Agreement contains the most recent contract tsrms 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 'fr2l.Lprovides that the New Energy Agreement will not become effective
until the Commission has approved all of the Agreement's terms and conditions and declared
that all payments Idatro Power makes to New Energy for purchases of energy from the Facility
will be allowed as prudently incurred expenses for ratemaking puposes.
On June 3, 2010, the Commission issued a Notice of Application and Modified
Procedure in Case No. IPC-E-10-18. The deadline for filing written comments was Jwre 23,
2010. Commission Staffwas the onlypartyto file comments.
oRDER NO. 32027 3
StaffCommmts
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 Agreerne,nt would have been fully executed prior to
March 16, 2010. Consequelrtly, Staffrecommends approval of all of the Agreement's terms and
conditions including grandfathered purchase rates (Order No. 30744).
COMIVUSSION FINDINGS
The Commission has reviewed and considered the filings of record in Case No. IPC-
E-10-17 including the Firm Energy Sales Ageement between Idatro Power Company and New
Energy Three, LLC (Double B) dated May 24,2010, and comments and recommendations of
Commission Staff. The Agreeme,lrt is for a l5-year term. The nameplate rating of the Double B
Facility is 2 MW,
The Agreement contains the non-levelized publishod avoided cost rates established by
the Commission in Order No. 30744. On the May 24,2010 date of contract signing the higher
contact 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 grandfathering criteria requirements. We further find the Company's
approach in this case regarding contract rates to be in concert with the spirit of those prior
grandfatheriag cases. See A.W. Brown v. Idaho Power,121 Idaho 812, 828 P.2d 841 (1'992);
OrderNo. 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
contract issues had been resolved prior to March 16, 2010, and that but for the intemal review
process of the Company a contact would have been signed prior to March 16. Based on the
record established in this case, we find that New Energy is entitled to the grandfathered rates of
Order No. 30744. As represented and pursuant to confiact terms, under normal and/or average
conditions the generation from the Double B Facility will not exceed 10 aI\4W on a monthly
basis. The Commission furds the Agreemelrt submitted in this case contains acceptable contact
terms. We further find it reasonable to allow payments made under the Agreement as prudently
incurred expenses for ratemaking pu{poses.
oRDERNO.32027 4
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over Idatro Power, an electric
utility, and the issues raised in this matter pursuant to the authority and power granted it under
Title 6l of the Idalro Code and the Public Utility Regularory Policies Act of 1978 (PLJRPA).
The Commission has authority under PUPJA and the imple,menting regulations of
the Federal Energy Regulatory Commission (FERC) to set avoided costs, to order electric
utilities to eirter into fixed-tenn obligations for the purchase of energy from qualified facilities
(QFs) and to implemeirt FERC rules.
ORDER
In consideration of the foregoing and as more particularly described above, IT IS
HEREBY ORDERED and the Commission does hereby approve the May 24,20l},Firm Energy
Salas Agreement between Idaho Power and New Energy One, LLC for the Double B Dairy
Anaerobic Digester Power Project.
THIS 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. 32027 5
DONE by Order of the ldaho Public Utilities Commission at Boise, tdatro this I tf'
day of July 2010.
D.
t
MARSHA H. SMITH, COMMISSIONER
^
MACK A. REDFORD, COMMISSIONER
ATTEST:
D
Secretary
bIVIPC-E- I 0- l 8_sw2
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