20030513Electric Service Agreement.pdf

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101 S. Capitol Boulevard. Suite 1900
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ATTORNEYS AT lAW
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UTILITIES COt'-1~lISSION
www.sLoel.com
JOHN M. ERIKSSON
Direct Dial
[phone]
email jmeriksson(?Ystoel.com
May 12 2003
Ms. Jean D. Jewell
Commission Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, ill 83702
Re:Case No. PAC-Ol-16; PacifiCorp/Monsanto Electric Service Agreement
Dear Ms. Jewell:
In accordance with the Commission s final Order in this case, enclosed for the Commission
approval is the Electric Service Agreement that has been negotiated by PacifiCorp and Monsanto
to comply with the terms of Order Nos. 29157, issued January 27, 2003 and 29206, issued March
, 2003. The parties are filing the Agreement with faxed signature pages and will submit a
clean copy of the signature page as soon as possible.
Thank you for your assistance in this matter.
Very truly yours
:oo~~~ Ii:
Enclosurescc: Randy Budge
Scott Woodbury
Bruce Griswold
Oregon
Washington
California
Utah
Idaho
EXHIBIT
OPERATING RESERVE
AND SYSTEM INTEGRITY INTERRUPTION OPTIONS
This Operating Reserve and System Integrity Interruption Options , Exhibit A, is a
part of the Electric Service Agreement between PacifiCorp and Monsanto Company,
dated as of January 1 , 2003 , as amended from time to time (the "Agreement"), and is
subject to the terms and conditions of the Agreement.
1. Definitions
Capitalized terms used in this Exhibit A shall have the meanings specified below
or as contained in the Agreement
1 .Operatinq Reserve means a specific amount of electrical resources that all
control areas must have available at all times to ensure the reliable operation of the
interconnected electrical system pursuant to WECC guidelines and includes
interruptible load as a non-spinning form of contingency Operating Reserves.
System Inteqrity means the ability of PacifiCorp s electric generation or
transmission system to continue to operate at a high degree of reliability and at voltage
levels consistent with Prudent Electrical Practices.
2. Operating Reserve Interruptions
PacifiCorp recognizes that each of Monsanto s electric phosphorus furnaces
operate at different electrical rates. Upon telephone notification by PacifiCorp for
Operating Reserves interruption, Monsanto will interrupt within six minutes its available
furnace load as defined below, subject to the terms of this Exhibit A. At the time of the
notification , Monsanto s operator shall inform PacifiCorp s dispatcher of the amount of
service it will be interrupting.
Operating Reserve interruptions shall have priority over Economic
Curtailment. If any of Monsanto s furnaces are not in operation, in order for PacifiCorp
to retain the ability to call for Operating Reserves, no furnace shall be considered
available for Economic Curtailment during that time.
Curtailments for Operating Reserve will be as follows depending upon
furnace availability at the time of notification:
If three furnaces are operating, Monsanto will curtail 95 MW
If two furnaces are operating and the third is unavailable due to
maintenance or overhaul , Monsanto will curtail a minimum of 95 MW.
If two furnaces are operating and the third is unavailable due to
Economic Curtailment, Monsanto will curtail one furnace. The furnace so
curtailed will be the largest operating furnace.
2.4 If only one Monsanto furnace is operating, Monsanto will curtail
such furnace.
The interrupted service shall be restored at the earlier of: (1) notice from
PacifiCorp s dispatcher, or, (2) sixty (60) minutes after interruption of the furnace load.
System Integrity Interruptions
PacifiCorp may request System Integrity Interruptions of up to 162 MW and
Monsanto will interrupt its available furnace load accordingly upon telephone
notification. Under emergency conditions , such interruption may occur without advance
notice to Monsanto. Otherwise, PacifiCorp shall give Monsanto not less than two (2)
hours notice of the potential for interruption for System Integrity purposes and advance
notice when such interruption will end.
System Integrity Interruptions shall be available to PacifiCorp all hours of
every day, and have priority over any other interruption or curtailment option
implemented at that time.
The interrupted service shall be restored when no longer needed to
maintain System Integrity.
A System Integrity Interruption shall not relieve Monsanto of any hours
under any other interruption or curtailment option. (For example , if a two-hour System
Integrity Interruption occurs during a five-hour Economic Curtailment , Monsanto will be
considered to have been economically curtailed for only three hours, but the Economic
Curtailment shall end at the time stated in the Curtailment Notice.
4. Purpose of Interruption
PacifiCorp may direct such interruptions at any time it concludes, in its sole
discretion , that PacifiCorp needs to utilize the Operating Reserves or System Integrity
Interruption , subject to the terms of the Agreement and this Exhibit A.
5. Number of Interruptions
The maximum number of Operating Reserve interruptions that PacifiCorp
may direct shall be:
(1) Two hundred eighty eight (288) hours per calendar year
(2) Twenty-five (25) interruptions for each calendar month
(3) Three (3) interruptions in any four (4) hour period
(4) Up to one (1) hour per interruption
The maximum number of System Integrity interruptions that PacifiCorp
may direct shall be twelve (12) hours per calendar year. Duration of any System
Integrity interruption can be longer than one hour.
Any interruption pursuant to this Agreement including all exhibits shall
count as a minimum of one (1) hour.
6. Operatina Reserves Nonperformance.
1 If, for any reason other than as defined in Section 8 of this Exhibit A
(Communication of Maintenance Scheduling) , Monsanto fails to comply with a request
from PacifiCorp to interrupt load for Operating Reserves as specified in this Exhibit A
PacifiCorp shall have the following remedies:
1 Monsanto shall pay PacifiCorp as damages the amount of
$150 000 for each occurrence, which the Parties agree is a reasonable
estimate of the damages expected to be incurred by reason of such
nonperformance.
PacifiCorp may request that Monsanto provide assurances in
writing that Monsanto will in the future comply with requests to interrupt
load for Operating Reserves as specified in this Exhibit A, including any
actions Monsanto will take to remedy the cause of such failure to comply.
In the event of a second failure by Monsanto to interrupt load
for Operating Reserves as specified in this Exhibit A, PacifiCorp may
petition the Commission for appropriate relief.
2 If, for any reason PacifiCorp requires Monsanto to interrupt load for
Operating Reserves under circumstances not permitted in this Exhibit A, and Monsanto
complies with such request, Monsanto shall have the following remedies:
PacifiCorp shall pay Monsanto as damages the amount of
$150 000 for each occurrence, which the Parties agree is a reasonable
estimate of the damages expected to be incurred by reason of such load
interruption.
Monsanto may request that PacifiCorp provide assurances
in writing that PacifiCorp will in the future comply with the requirements for
interrupting load for Operating Reserves as specified in this Exhibit A
including any actions PacifiCorp will take to remedy the cause of such
failure to comply.
In the event of a second failure by PacifiCorp to comply with
the requirements for interrupting load for Operating Reserves as specified
in this Exhibit A, Monsanto may petition the Commission for appropriate
relief.
The remedies provided in this Section 6 for the specified failures to comply
with Operating Reserves requirements of this Exhibit A are the sole and exclusive
remedies for such nonperformance.
7. Maintenance of Dedicated Telephone Line
Monsanto and PacifiCorp shall maintain a dedicated telephone line at their own
cost in their respective control rooms. This line shall be solely dedicated for
communications between Monsanto furnace operators and PacifiCorp dispatchers.
Each party shall have an authorized employee available at all times to immediately
respond to telephone notices of interruption or curtailment of operations.
8. Communication of Maintenance Scheduling
PacifiCorp acknowledges that the electric phosphorus furnaces at
Monsanto will be removed from service from time to time during the Term of this
Agreement for maintenance and overhauls. As provided for in Section 8 of Exhibit 8
Monsanto will submit to PacifiCorp expected maintenance schedules and delays, as
well as inform PacifiCorp dispatchers by telephone with a follow-up fax prior to restoring
electrical power to a furnace after such a delay.
If Monsanto has unavailable furnaces due to maintenance or overhaul
and an interruption is called for either Operating Reserve or System Integrity, Monsanto
will not resume operation of the unavailable furnaces until the earlier of: 1) notice from
PacifiCorp dispatcher or, 2) sixty (60) minutes after the notification by Monsanto to
resume service.
9. Communication
Notwithstanding the minimum notice requirements set forth in this Exhibit, the
parties will use best efforts to provide each other with as much notice as possible of
interruption or curtailment of operations.
PacifiCorp and Monsanto shall use an agreed-upon written communication script
to use during the telephone notice from PacifiCorp s dispatcher requesting such
interruption of electrical service for Operating Reserve.
The agreed-upon script may be updated from time to time by written mutual
consent by both parties.
10. Contacts
Monsanto operator:
Plant: (direct line)
Fax: [phone]
PacifiCorp dispatch (Real-time desk):
Phone: [phone]
Fax: [phone]
EXHIBIT
Economic Curtailment Option
This Economic Curtailment Option , Exhibit 8 , is a part of the Electric Service
Agreement between PacifiCorp and Monsanto Company, dated as of January 1 , 2003
as amended from time to time (the "Agreement"), and is subject to the terms and
conditions of the Agreement.
1. Definitions
Capitalized terms used in this Exhibit 8 shall have the meanings specified below
or as contained in the Agreement:
Adjusted Index Price means the Index Price for a given Day times the
applicable hourly shaping factor set forth in Exhibit 8-1 for each Economic Curtailment
Hour.
Economic Curtailment means an interruption of electric service to
Monsanto s Plant made by PacifiCorp in its sole discretion in accordance with this
Exhibit 8.
Economic Curtailment Capacity means the 67 MW electric load available
for Economic Curtailment under this Exhibit 8.
1.4 Economic Curtailment Hours means the hours chosen by PacifiCorp for
Economic Curtailment during each Day.
Economic Curtailment Notice means the notice of curtailment provided to
Monsanto by PacifiCorp in accordance with Section 4 of this Exhibit 8.
Economic Curtailment Response means Monsanto s response in
accordance with Section 5 of this Exhibit 8 to an Economic Curtailment Notice.
Index Price means the price for a given Day as specified for the identified
Dow Jones TM index. During those hours that more than 67 MW of PacifiCorp merchant's
firm transmission rights (North to South) on Path C go unutilized and are available , as
determined on an after-the-fact basis by comparing PacifiCorp s scheduled usage , as of
the beginning of each Economic Curtailment Hour, against firm Path C rights available
to PacifiCorp s merchant function for that hour, Monsanto will pay PacifiCorp based on
the lower of the appropriate (on-peak or off-peak) Dow Jones TM Mid-Columbia or Palo
Verde Index Price for firm power as reported at www.dowjones.com (or a successor
site) each Monday through Sunday.
For those hours that less than 67 MW of PacifiCorp merchant's firm Path C
transmission rights (north to south) on Path C are available , as determined on an after-
the-fact basis by comparing PacifiCorp s scheduled usage against firm Path C rights
available to PacifiCorp s merchant function for that hour, Monsanto will pay PacifiCorp
based on the appropriate (on-peak or off-peak) Dow Jones TM Palo Verde Index Price
for firm power; provided , however, that the Palo Verde Index Price, rather than the lower
of the Palo Verde or Mid-Columbia Index Price , shall be paid only to the extent such
transmission rights are constrained on a scheduled basis for each Economic
Curtailment Hour. For example, if during an hour for which Monsanto has elected to
buy through 67 MW, only 30 MW of such transmission rights are available, Monsanto
will pay based on the lower of the Palo Verde or Mid-Columbia Index Price for 30 MWhs
of the Replacement Energy delivered for that hour, and will pay based on the Palo
Verde Index Price for the remaining Replacement Energy for that hour.
If separate on-peak and off-peak Dow Jones TM indices are not reported for any
Day during the Term , the Dow Jones TM indices for the most recent preceding Day (Le.
Saturday for Sunday) shall be used to set the Index Price for the Day on which separate
on-peak and off-peak Dow JonesTM indices are not reported. For reference, the Dow
Jones description of the Dow Jones TM Mid-Columbia and Palo Verde indices is
attached as Exhibit B-
If the "Dow Jones TM indices or any replacement of either the Mid-Columbia or
Palo Verde index ceases to be reported during the Term, or ceases to be an accurate
and reliable index for the types of transactions currently covered, the Parties shall
mutually agree upon a substantially equivalent index that, after any appropriate or
necessary adjustments, provides the most reasonable substitute for the index in
question. Neither PacifiCorp nor Monsanto shall unreasonably withhold , condition or
delay agreement to such an index.
Path C means the particular high voltage transmission corridor comprised
of the Borah-Ben Lomond 345 kV, Brady-Treasureton 230 kV, Goshen-Grace 161 kV
and American Falls-Malad 138 kV lines , located in northern Utah and southern Idaho.
In accordance with the WECC criteria for rating paths, its transfer capability is based on
a simultaneous loss of both the Borah-Ben Lomond 345 kV and the Brady-Treasureton
230 kV lines , which share common right-of-way for approximately 50 miles. The
amounts of Path C (North to South) firm and non-firm transfer capability that
PacifiCorp s transmission function has available for sale is listed on PacifiCorp s OASIS
web site at ''http://www.oasis.pacificorp.com'' under the path name of 'W//PPW/PATHC-
PACE//". The Parties acknowledge that the information supplied on PacifiCorp s OASIS
web site mayor may not be indicative of PacifiCorp merchant's actual Path C (North to
South) firm right schedule at the beginning of any Economic Curtailment Hour, and
PacifiCorp shall not be liable in any manner with respect to any curtailment or buy-
through decisions of Monsanto hereunder based on such Path C information.
Replacement Enerqy means the energy for any Economic Curtailment
Hour that Monsanto elects to buy through rather than physically curtailing its 67 MW
electric phosphorous furnace load.
During such hours that Monsanto does not physically curtail its electric
phosphorous furnace load , Replacement Energy shall be deemed to be 67 MWh per
Economic Curtailment Hour. During Economic Curtailment Hours that notice is provided
pursuant to Section 5 below that Monsanto intends to physically curtail electric
phosphorous furnace load , Replacement Energy shall be deemed to equal 67 MWh per
Economic Curtailment Hour less: (a) 67 MWh per Economic Curtailment Hour if furnace
#9 is identified for furnace curtailment, or (b) 49 MWh per Economic Curtailment Hour if
furnace #8 is identified for furnace curtailment, or (c) 46 MWh per Economic Curtailment
Hour if furnace #7 is identified for furnace curtailment.
2. Amount of Economic Curtailment
Monsanto agrees to supply PacifiCorp 67 MW of Economic Curtailment up
to a maximum of 500 hours per calendar year upon not less than two (2) hours of fax
notice, confirmed by telephone notice.
If any of Monsanto s furnaces are not in operation , in order for PacifiCorp
to retain the ability to call for Operating Reserves, no furnace shall be considered
available for Economic Curtailment during that time.
3. Purpose of Curtailment
PacifiCorp may direct an Economic Curtailment at any time , subject to the terms
of Exhibit A and this Exhibit B.
4. Curtailment of Monsanto
PacifiCorp may exercise its right to Economic Curtailment, upon not less
than two (2) hours of fax notice from PacifiCorp s dispatcher to Monsanto s control
operator at [phone], with prompt confirmation by telephone notice through
Monsanto s direct line , requesting curtailment of electric service for economic purposes
and providing the amount and duration , start and end time. Such fax notice shall utilize
the form of curtailment notice attached hereto as Exhibit B-2. If at the time of the
telephone notice Monsanto has not received the fax notice, the notice of curtailment
shall be deemed given by telephone. With such notice, PacifiCorp will provide to
Monsanto information regarding PacifiCorp s estimate of what Dow Jones may publish
for the Index Price, prior to any adjustments as provided for herein , for the day
associated with such period of curtailment. Such information will be based on market
information reasonably known by PacifiCorp s dispatchers at the time with respect to the
Index Price, but PacifiCorp shall not be bound by such information and will not be liable
in any manner for the accuracy of such information or any differences between such
estimates and the actual Index Price.
If PacifiCorp has not received notice from Monsanto in accordance with
Section 5 below in response to an Economic Curtailment Notice , PacifiCorp will use
reasonable efforts to contact Monsanto by telephone , not less than one hour prior to the
time the designated Economic Curtailment is to commence; provided, however, that in
no event shall failure by PacifiCorp to make such contact relieve Monsanto of its
obligation to pay Replacement Energy Charges for the Economic Curtailment Hours
designated in PacifiCorp s Economic Curtailment Notice. Further, if notwithstanding
PacifiCorp s attempts to provide notice to Monsanto pursuant to Section 4.1 above, and
through no fault of PacifiCorp, Monsanto does not receive an Economic Curtailment
Notice, Monsanto shall nevertheless pay Replacement Energy Charges for the
Economic Curtailment Hours designated in such notice.
Monsanto shall take action as needed to curtail the electrical supply to up
to 67 MW of its electric phosphorus furnace load at the designated curtailment time.
The curtailed service shall be restored at the end of the duration of the Economic
Curtailment.
5. Buy-Through Replacement Energy
Monsanto shall have the option to buy-through Economic Curtailment by
paying PacifiCorp for Replacement Energy costs at the Adjusted Index Price.
Monsanto may exercise its right to buy-through an Economic Curtailment
in whole or part, by fax notice to PacifiCorp s dispatcher at [phone] , with prompt
confirmation by telephone notice at [phone] (or alternatively, 503-813-5389),
requesting such buy-through at any time up to one (1) hour prior to the time the
designated Economic Curtailment is to commence. Regardless of whether Monsanto
elects to buy through , it shall provide PacifiCorp an Economic Curtailment Response by
fax and telephone to PacifiCorp s dispatcher, no later than one (1) hour prior to the time
the designated Economic Curtailment is to commence, stating the amounts that
Monsanto will curtail , the electric phosphorous furnace that Monsanto plans to curtail (if
any), and the amount of Replacement Energy that Monsanto elects to buy through.
If Monsanto has curtailed load in accordance with an Economic Curtailment
Notice, it may thereafter elect to buy-through a portion of the Economic Curtailment
period by providing fax notice not less than one (1) hour prior to the hour it desires to
commence the buy-through. Monsanto shall pay for Replacement Energy for any
amounts not curtailed pursuant to an Economic Curtailment Notice from PacifiCorp.
Monsanto curtails load in accordance with an Economic Curtailment Notice from
PacifiCorp, but fails to provide an Economic Curtailment Response as required herein
Monsanto shall pay PacifiCorp an amount equivalent to what would be due for
Replacement Energy as though it had elected to buy through the Curtailment Hours for
the entire 67 MW, but only for those Curtailment Hours for which Monsanto had not
provided an Economic Curtailment Response at least one hour in advance.
At all times , all furnaces shall remain subject to System Integrity
interruption , and Monsanto shall not be obligated to pay for, nor entitled to receive
Replacement Energy during a period of System Integrity interruption , all of the foregoing
in accordance with IPUC Order Nos. 29157 and 29206.
5.4 All Economic Curtailment Notices and Economic Curtailment Responses
to be provided under this Section 5 shall utilize the form of notice attached hereto as
Exhibit B-
6. Economic Curtailment Nonperformance.
If Monsanto does not fully comply with an Economic Curtailment Notice in
accordance with this Exhibit B, Monsanto shall pay for Replacement Energy for those
Curtailment Hours of noncompliance as specified in Section 4.3 of the Agreement and
this Exhibit B
7. Maintenance of Dedicated Telephone Line and Fax Facilities
Monsanto and PacifiCorp shall maintain a dedicated telephone line at their
own cost in their respective control rooms. This line shall be solely dedicated for
communications between Monsanto furnace operators and PacifiCorp dispatchers.
Each party shall have an authorized employee available at all times to immediately
respond to curtailment notices or curtailment of operations. Each party shall also
maintain at their own cost fax facilities, with a telephone line dedicated for the fax
facilities , necessary for transmitting and receiving fax notices as required herein. While
PacifiCorp acknowledges that as of the date of this agreement Monsanto does not have
in place a telephone line dedicated for such fax facilities, Monsanto shall with due
diligence obtain the installation of such a line and proper operation of the fax facilities as
soon as possible. If such fax facilities cannot be made to function properly within three
months , the parties will work in good faith to achieve an alternative means of notice.
2 The fax requirements under this agreement shall begin once the fax line to
be installed by Monsanto is functioning properly.
8. Communication of Schedules
PacifiCorp acknowledges that the electric phosphorus furnaces at
Monsanto will be removed from service from time to time during the t~rm of this
Agreement for maintenance and overhauls. Monsanto will submit to PacifiCorp on the
first business day of the month or as soon thereafter as practicable, by fax, expected
maintenance schedules and delays, if any, expected during the following calendar
month, including scheduled time of curtailment , duration , and electrical load of
corresponding furnace. Monsanto shall provide such schedules using the best
information reasonably available , but it is understood that they will reflect only an
estimate and, therefore, shall not be binding on Monsanto. Further, the failure to
provide such scheduling information shall not preclude Monsanto from taking furnaces
out of service for maintenance. Monsanto will also inform PacifiCorp by telephone or
fax prior to restoring electrical power to a furnace after such a delay.
In order to enable Monsanto to anticipate possible curtailment, to plan
furnace operations and make buy-through decisions in accordance herewith , PacifiCorp
shall submit to Monsanto on the first day of each calendar month , or as soon thereafter
as practicable, by fax, a schedule showing the estimated times, durations and total
hours of economic curtailments, if any, expected during the following calendar month.
PacifiCorp shall prepare such schedule using the best information reasonably available
but it is understood that it shall reflect only an estimate of expected conditions and
therefore, shall not be binding upon PacifiCorp. Further, the failure to provide such
scheduling information shall not preclude PacifiCorp from implementing Economic
Curtailment.
9. Reporting
Simultaneous with PacifiCorp s monthly invoice to Monsanto for power and
energy purchased , PacifiCorp shall provide Monsanto with a report detailing all
interruptions and curtailments during the previous month , including the following
information:
1) Type of interruption or curtailment (system emergency or integrity, operating
reserves, or Economic Curtailment)
2) Date
3) Beginning and end time
4) Du ration
5) Megawatts interrupted or curtailed
6) Year-to-date total hours of each type of interruption or curtailment
7) Buy through charges, rate, source and energy purchased
10. Audit
Monsanto reserves the right to perform audits of records of PacifiCorp related to
the Replacement Energy prices and volume charged to Monsanto hereunder, including
records regarding constraints on Path C affecting such prices. PacifiCorp will allow
Monsanto reasonable access to such records at mutually agreed upon times. Neither
party shall be responsible for any expenses incurred by the other party associated with
such audits.
Exhibit B-
Hourly Shaping Factors
January 114%
February 114%
March 114%
April 110%
May 122%
June 126%
July 130%
August 130%
September 119%
October 113%
November 111%
December 116%
Exhibit B-
Economic Curtailment Notice and Response
PACIFICORP NOTICE:To: Monsanto Fax [phone]
Voice: Direct Line
MONSANTO RESPONSE::To: PacifiCorp Fax [phone]
Voice: 503-813-5374
(alternatively, 503-813-5389)
Date:
(Month/DaylYear)
Date:
(Month/DaylYear)
Time:Time:
(Mountain Prevailing Time)(Mountain Prevailing Time)
Economic Curtailment Notice:PacifiCorp notice must be given no later than two (2)
hours prior to the Curtailment Hour(s) during the Day.
Economic Curtailment ResDonse: Monsanto response must be provided no later than
one (1) hour from the time stamp on the Notice.
I Day:
Month Day Year
PacifiCorp s Economic Curtailment Notice Monsanto s Economic
Curtailment ResponseStart of Economic Curtailment HourCurtailment
Mountain Pacific Indicate "Estimated
Prevailing Prevailing for Hourty Replacement Physical Total(Monsanto)Time Curtailment Price Energy Curtailment
Time Hour Hour $/MWHEnding
1 AM 0100
2AM 0200
3AM 0300
4AM 0400
5AM 0500
6AM 0600
7AM 0700
8AM 0800
9AM 0900
10AM 1000
11 AM 1100
Noon 1200
1 PM 1300
2PM 1400
3 PM 1500
4PM 1600
5PM 1700
6 PM 1800
7PM 1900
8PM 2000
9PM 2100
10 PM 2200
11 PM 2300
Midnight 2400
Exhibit B-
Description of Dow Jones TM Market Index
WHOLESALE ELECTRICITY
PRICE INDEXES
MID-COLUMBIA
The Dow Jones Mid-Columbia Electricity Price Indexes are volume-weighted averages of
specifically defined bilateral, wholesale, physical transactions. Calculations for these indexes
average together power transactions from Columbia, Midway, Rocky Reach , Wells, and
WanapumNantage, delivery points along the Columbia River.
Index participants provide Dow Jones with their daily volume weighted average prices and total
volumes for eligible electricity products sold at the Mid-Columbia delivery points, as well as with
any purchases made from entities not contributing to the indexes.
Participants are asked to provide Dow Jones with daily index data by 10 a.m. Pacific Time, the
day after the transacted power moves. Although some Mid-Columbia electricity indexes will be
calculated for 365 days of the year, publication will occur only on business days. If a holiday
falls during the week, data should be transmitted to Dow Jones on the first business day
following a break.
Index Categories
Daily Sunday and NERC Holidays
Firm On-peak 24-Hour Firm
Firm Off-peak
Non-Firm On-peak
Non-Firm Off-peak
The following definitions have been designed to insure that each index category represents a
specific power product. Since each category has a unique definition , no single transaction can
be included in more than one category. If a transaction does not precisely fit into an index
category, it will not be included in our index calculations.
Firm Daily Indexes: The firm daily indexes averaqe toQether blocks of power sold on a one-day
forward pre-scheduled basis. No real-time power is included in these indexes. Transactions are
limited to power traded in 16-hour blocks during on-peak hours and 8-hour blocks for off-peak.
Transactions which call for delivery for more than one day are not included in calculations for
these indexes. Volume should be reported to Dow Jones as total megawatts transacted per
hour.
Firm Sunday and NERC Holidays Index: A 24-hour firm index will be published for Sundays
and NERC holidays. Transactions included in this index are limited to power traded in 24-hour
pre-scheduled blocks.
Non-firm Daily Indexes: The non-firm indexes combine one day ahead pre-scheduled
transactions with real-time transactions. The non-firm indexes follow the same convention as
the firm indexes with respect to single day delivery. Volumes reported for these indexes should
reflect the total number of MWh transacted for the entire ON- or OFF-PEAK reporting period.
TerminoloQV
On-peak Hours: Hours ending 0700 - 2200 (6 a.m. - 10 p.) Pacific Time at Mid-Columbia
seven (7) days a week includinq NERC holidays.
Off-peak Hours: Hours ending 2300 - 0600 (10 p.m. - 6 a.) Pacific Time at Mid-Columbia
seven (7) days a week includinq NERC holidays.
Firm Energy: Firm energy is defined as meeting a minimum criteria of being financially firm and
backed with liquidating damages.
Non-firm Energy: Non-firm energy is defined as being subject to curtailment at any time for
any reason. Any recall provision would be for less than one hour from the scheduled start of
service.
NOTE : Power conforming to any other measures of "firmness" should not be included in
the Mid-Columbia indexes.
ndex Dates
Daily Indexes: INDEX DATE = POWER DELIVERY DATE
The date on a daily index corresponds to the date the power is delivered. For example,
Monday s prescheduled transactions are combined with Tuesday s real-time transactions to
form Tuesday s index.
Both Mid-C FIRM daily indexes are calculated seven days a week includinq NERC holidays
Both Mid-C NON-FIRM daily indexes are calculated seven days a week includinq NERC
holidays
The Mid-C 24-Hour FIRM index will be calculated for Sundays and NERC Holidays.
PALO VERDE
The Dow Jones Palo Verde Electricity Price Indexes are volume weighted averages of
specifically-defined bilateral , wholesale , physical transactions quoted in either dollars per
megawatthour ($/MWH) or dollars per megawatt ($/MW). Calculations for these indexes
average together power transactions from both Palo Verde and Westwing in Arizona.
Index participants provide Dow Jones with their daily volume weighted average prices and total
volumes for eligible electricity products sold at Palo Verde and Westwing, as well as with any
purchases made from entities not contributing to the indexes.
Participants are asked to provide Dow Jones with daily index data by 10 a.m. prevailing time at
Palo Verde , the day after the transacted power moves. Although some Dow Jones Electricity
Indexes are calculated for 365 days year, publication occurs only on business days. If a holiday
falls during the week, data is transmitted to Dow Jones on the first business day following a
break.
Index Categories
Daily Sunday and NERC Holidays
Firm On-peak 24-Hour Firm
Firm Off-peak
Non-Firm On-peak
Non-Firm Off-peak
Firm Daily Indexes: The firm daily indexes averaQe toqether blocks of power sold on a one-day
forward pre-scheduled basis. No real-time power is included in these indexes. Transactions are
limited to power traded in 16-hour blocks during on-peak hours and 8-hour blocks for off-peak.
Transactions which call for delivery for more than one day are not included in calculations for
these indexes. Volume should be reported as total megawatts (MW) transacted per hour.
Firm Sunday and NERC Holiday Index: A 24-hour firm index will be published for Sundays
and NERC holidays. Transactions included in this index are limited to power traded in 24-hour
pre-scheduled blocks.
Non-firm Daily Indexes: The non-firm indexes combine one day ahead pre-scheduled
transactions with real-time transactions. The non-firm indexes follow the same convention as
the firm indexes with respect to single day delivery. Volumes reported should reflect the total
number of MWh transacted during the ON- or OFF-PEAK reporting period.
Terminoloav
On-peak Hours: Hours ending 0700 - 2200 (6 a.m. - 10 p.) prevailing time at Palo Verde
seven (7) days a week inciudinQ NERC holidays.
Off-peak Hours: Hours ending 2300-0600 (10 p.m. - 6 a.) prevailing time at Palo Verde
seven (7) days a week.
NOTE: Since Arizona does not observe Daylight Savings Time, time-related definitions
are based on Palo Verde prevailing time.
Firm Energy: Firm energy is defined as being financially firm and backed with liquidating
damages.
Non-firm Energy: Non-firm energy is defined as being subject to curtailment at any time for
any reason. Anv recall provision would be for less than one hour from the scheduled start of
service.
Index Dates
Daily Indexes: INDEX DATE = POWER DELIVERY DATE
The date on a daily index corresponds to the date the power is delivered. For example,
prescheduled power transacted on Monday for delivery on Tuesday is averaged to form
Tuesday s index. For indexes that include real-time power, Monday s prescheduled transactions
are combined with Tuesday s real-time transactions to form Tuesday s index.
Palo Verde on-peak and off-peak daily indexes are calculated seven days a week includinq
NERC holidays.
The Palo Verde 24-Hour FIRM index will be calculated for Sundays and NERC Holidays.
If you have any questions or if any information on this sheet is not expressed clearly, please call
Antoine Eustache at [phone] or Ernest Onukogu at [phone].
ELECTRIC SERVICE AGREEMENT
BETWEEN
PACIFICORP
AND
MONSANTO COMPANY
THIS ELECTRIC SERVICE AGREEMENT ("Agreement"), dated as of the 1 st day
of January 2003, is by and between PacifiCorp, an Oregon corporation that provides
electric service in the State of Idaho (hereinafter referred to as "PacifiCorp ), and
Monsanto Company, a Delaware corporation that owns and operates an elemental
phosphorus plant at a site near Soda Springs City in Caribou County, Idaho (hereinafter
referred to as "Monsanto ). PacifiCorp and Monsanto are also referred to herein
individually as a "Party" and jointly as "Parties.
WITNESSETH:
WHEREAS, PacifiCorp and Monsanto have entered into a Power Supply
Agreement dated November 1 , 1995 for retail electric service to the Soda Springs Plant
(hereinafter "1995 Contract"
WHEREAS , PacifiCorp is currently the provider of retail electric energy and
power to Monsanto s elemental phosphorous production facilities located at Soda
Springs, Idaho (the "Plant"), and
WHEREAS , Monsanto desires to purchase electric power and electric energy
requirements for the Plant under this Agreement, and
WHEREAS, PacifiCorp desires to be the exclusive provider of all electric power
and energy to Monsanto s Plant, and
WHEREAS, PacifiCorp and Monsanto are engaged in litigation in the United
States District Court for the District of Idaho , Case No. CIV-01-0607-BLW , to
establish the termination date of the 1995 Contract; and
WHEREAS , the Idaho Public Utilities Commission (the "Commission ) by Order
No. 28918 issued December 21 , 2001 , determined that the existing rate under the 1995
Contract would remain in effect subject to a true-up mechanism retroactive to the
termination date of the 1995 Contract based upon the difference between the interim
rate and the new rate pursuant to this Agreement; and
WHEREAS, the Commission by Order No. 29157 issued January 27 2003 and
Order No. 29206 issued March 14 , 2003 established new rates and other terms
incorporated in this new Electric Service Agreement, which shall be effective as of
January 1 , 2003 , subject to said true-up mechanism when the Federal District Court has
determined the termination date of the 1995 Contract.
NOW, THEREFORE, the Parties agree as follows:
Section 1: Definitions
As used in this Agreement, the following terms have the meanings specified.
Definitions relating to System Integrity, Operating Reserves and Economic Curtailment
are contained in Exhibits A and B and are incorporated in this Agreement by reference.
Billinq Period means the period of approximately thirty (30) days
intervening between regular successive meter reading dates.
Day means calendar day, Pacific Prevailing Time.
Demand means the rate in kilowatts at which electric energy is delivered
by PacifiCorp to Monsanto averaged over a fifteen (15) minute period of time.
1.4 Electric Service Requlations means PacifiCorp s currently effective electric
service rules and regulations , on file with and approved by the Commission, as they
may be amended or superseded from time to time with the approval of the Commission.
Firm Power and Enerqy means electric power expressed in kilowatts and
associated energy expressed in kilowatt-hours intended to have assured availability to
Monsanto to meet that portion of Monsanto s load requirements specified in this
paragraph. In this Agreement, Firm Power and Energy shall be the first 9 000 kW of
Measured Demand and associated energy in any Billing Period as measured at the
Point of Delivery. Firm Energy during any Billing Period shall be the amount of energy,
in kilowatt-hours , delivered to Monsanto equal to the number of hours in the Billing
Period multiplied by the Firm Power.
Interruptible Power and Enerqy means electric power expressed in
kilowatts and associated energy expressed in kilowatt-hours made available to
Monsanto to meet the portion of Monsanto s load requirements subject to interruption of
delivery at PacifiCorp s option as set forth in Exhibits A and B of this Agreement.
Interruptible Power shall be the Measured Demand in any Billing Period in excess of the
Firm Power. Interruptible Energy delivered to Monsanto during any Billing Period shall
be the total energy in kilowatt-hours, in that Billing Period , less the Firm Energy, and
less any Replacement Energy.
Measured Demand means the Demand in kilowatts supplied by PacifiCorp
as shown by or computed from the readings of PacifiCorp s power meter(s)
representing Monsanto s greatest use during the Billing Period.
Monsanto Electrical Facilities means all facilities and equipment within
Monsanto s 138 kV substation at its Plant except for PacifiCorp s metering equipment
under-frequency relays, capacitors and any other equipment owned by PacifiCorp and
installed in Monsanto s substation under the terms and conditions of this Agreement or
any other agreement.
Point of Delivery for all power and energy delivered to Monsanto means
the termination of PacifiCorp s two 138 kV transmission lines at Monsanto s substation
located approximately eight miles from PacifiCorp s Soda (Idaho) hydroelectric station in
Caribou County, Idaho, or such other point(s) of metering as PacifiCorp and Monsanto
shall agree.
1 .10 Prudent Electrical Practices means those practices , methods and
equipment, as changed from time to time , that are commonly used in prudent electrical
engineering and operations to operate electric equipment lawfully and with safety,
dependability, efficiency and economy and that are in accordance with the IEEE
Standards, the National Electrical Safety Code or the National Electric Code or any
other applicable government code in effect during the term of this Agreement.
1 .11 Replacement Enerqy Charqe means the charge for Replacement Energy
calculated in accordance with Section 4.3 of this Agreement.
12 Retail Customer means a PacifiCorp customer who purchases electric
power and energy for its own consumption (Le., not for resale).
13 Total Contract Demand means the specified Demand in kilowatts that
Monsanto contracts with PacifiCorp to supply and that PacifiCorp agrees to have
available for delivery to Monsanto. Monsanto may require the delivery of such amounts
of Firm and Interruptible Power as Monsanto may require to meet Monsanto s load
requirements up to, but not in excess of, the applicable Total Contract Demand, which
shall be 215 000 kW unless otherwise agreed in writing in accordance with the terms of
this Agreement.
14 WECC means the Western Electricity Coordinating Councilor a successor
organization which assumes essentially the same functions as the Western Electricity
Coordinating Council.
Section 2: Term; Reopeners
Term . This Agreement shall become effective on January 1 , 2003, subject
to the true-up mechanism in accordance with the Commission s Order Nos. 28918 and
29157. This Agreement shall terminate at 2400 hours on December 31 2006. Any
electric service PacifiCorp provides to Monsanto after the Termination Date shall be on
terms and conditions and at prices to be established or approved by the Commission.
Reopeners. Except as provided in this Section , the payment rates set
forth in Section 4 cannot be changed during the term of the Agreement, unless the
Commission finds that the change in rates is necessary to prevent an adverse affect on
the public interest as set forth in the case of Agricultural Products vs. Utah Power
Light Co., 98 Idaho , 557 2d 617 (1976).
1 This Agreement may be reopened and modified by the Commission
upon application of either PacifiCorp or Monsanto, in the following events: (i) direct
access to wholesale electricity markets is implemented in the state of Idaho and
available to Monsanto; or (ii) the WECC amends the quantity or requirements of either
the contingency reserve or frequency response reserve component of Operating
Reserves or otherwise modifies Operating Reserves requirements in a manner that
materially affects the availability or valuation of Operating Reserves under this
Agreement.
PacifiCorp may apply to the Commission for a modification of this
Agreement if PacifiCorp demonstrates that (i) Monsanto has shut down one or more of
its furnaces for economic reasons for a period of 9 months or longer, excluding shut-
downs for maintenance, repair or capital improvements, and (ii) PacifiCorp is materially
financially harmed by reason of such reduction in furnace load , taking into account the
price that could be obtained by PacifiCorp in a market sale of the energy available from
the reduced load , among other things. PacifiCorp shall bear the burden of satisfying
these conditions. The Commission shall determine whether these conditions have been
satisfied and whether and in what respects this Agreement may be modified to address
the change in Monsanto s furnace operations and the financial harm to PacifiCorp.
Should Monsanto reduce its furnace operations from the existing 3-
furnace level by one furnace or more for a period of 60 continuous days or more
Monsanto agrees to provide PacifiCorp not less than 60 days written notice before
resuming the operation of such furnace or furnaces.
Section 3: Purchase and Sale of Power
Scope of Deliveries . PacifiCorp shall deliver such amounts of power and
energy to the Point of Delivery as Monsanto requires to meet its load requirements up
, but not in excess of, Total Contract Demand , subject to the provisions of Exhibits A
and B. Subject to the interruption and curtailment provisions of Exhibits A and B
PacifiCorp shall use its reasonable best efforts to supply Monsanto s Interruptible Power
and Energy requirements.
Delivery Voltaqe . PacifiCorp shall deliver power and energy at the Point
of Delivery in the form of three-phase , alternating current at a nominal frequency of 60
cycles per second , and at a nominal voltage of 138 000 volts, in accordance with
Prudent Electrical Practices. Except during temporary emergency conditions
PacifiCorp shall maintain voltage within the limits of 5 percent above and 5 percent
below a normal operating voltage , such normal voltage to be established by PacifiCorp
from time to time upon reasonable notice to Monsanto, between the limits of 120 000
volts and 138 000 volts. PacifiCorp reserves the right to modify the voltage standards in
this Section to conform to changes in applicable ANSI standards.
Reactive Requirements Monsanto shall control and limit the flow of
reactive power between PacifiCorp s and Monsanto s system so as to maintain a Power
Factor in accordance with Section 4.1.4.
3.4 Phase Balance Monsanto shall balance its loads among phases to the
extent practicable. If the difference between maximum and minimum phase loads
regularly or frequently exceeds 10 percent, based upon a defined place of
measurement, PacifiCorp may require that Measured Demands be determined on the
basis of three times the load in the maximum phase.
Wave Form . In the design, selection , and operation of equipment using
electric power, Monsanto shall observe due precautions to avoid distortion of wave form
that, reacting through the system of PacifiCorp, may result in interference to operation
of telephone systems or in other injurious effects to PacifiCorp s electrical system or
other Retail Customers. If such adverse effects result at any time from distortion of
wave form by causes originating in the Monsanto Electrical Facilities Monsanto shall
remediate such effects in accordance with Section 3.7 of this Agreement.
Cooperation in Operation
1 Monsanto shall endeavor to supply PacifiCorp in advance with
information as to conditions affecting Monsanto s power load that may aid PacifiCorp in
load dispatching and in planning PacifiCorp s power system operation , such as the
probable times and durations of substantial daily load changes. Following an
unexpected furnace outage, Monsanto shall notify PacifiCorp s dispatcher as quickly as
possible of the expected duration of such outage. Such estimates or advance
information shall not be binding on either Party.
PacifiCorp shall hold in reserve sufficient generating capacity to
supply Monsanto s anticipated load requirements for a period not to exceed thirty (30)
minutes beyond Monsanto s estimated time of load increase. If Monsanto s load
requirements have not begun to increase within such thirty (30) minute period
PacifiCorp may sell or otherwise dispose of such reserve capacity as surplus energy
until such time as Monsanto is ready to increase load. However, if such a sale is made
Monsanto may not increase load until such sale can be terminated or PacifiCorp is able
to obtain additional capacity through some other means. Such restriction to Monsanto
load shall not be accounted for as curtailment, but shall not extend more than one (1)
hour beyond the time Monsanto is ready to increase load.
In order to administer the terms and conditions of this Agreement
PacifiCorp and Monsanto shall each designate from time to time in writing their
respective representatives for the purpose of giving and receiving informal
communications required under this Agreement.
6.4 PacifiCorp acknowledges that Monsanto s electric furnaces require
shutdowns for maintenance and overhauling, and it is the intent of the Parties that such
shutdowns and consequent reduction of power requirements be predetermined insofar
as possible by agreement between the Parties. Except as otherwise provided in Exhibit
, Monsanto shall provide PacifiCorp with at least thirty (30) days written notice of all
planned shutdowns of the furnaces.
Remediation. In the event Monsanto s operations fail to comply with
technical requirements of this Agreement or the Electric Service Regulations, or
adversely affect the operation of PacifiCorp s transmission or distribution system or
other PacifiCorp retail customers, PacifiCorp will promptly give Monsanto written notice
thereof. Within thirty (30) days after such notice a working team will be formed with
members designated by each Party. The working team will then consult and meet as
needed to identify and agree upon: (1) the nature and extent of the alleged problem or
deficiency; (2) the cause and responsibility for the problem; (3) reasonable alternative
solutions together with the costs and implementation time associated with each; and (4)
a mutually acceptable remedial action plan. If the Parties fail to agree , either may
petition the Commission to resolve any disputes, which determination shall be binding.
Any remedial action agreed upon by the Parties or determined by the
Commission shall be promptly undertaken and pursued to completion. Should
Monsanto fail to begin to take corrective action within thirty (30) days after the
established start date, PacifiCorp may perform the necessary action and Monsanto shall
reimburse PacifiCorp the reasonable costs therefor.
Section 4: Payment for Power and Eneray
Determination of Billinq Amounts
1 The following charges apply each Billing Period to all Firm Power
and Energy delivered to Monsanto under this Agreement:
Firm Energy Charge: 16.31 mills per kilowatt hour of Firm Energy
Customer Charge: $283 per Billing Period
Firm Demand Charge: $8.81 per kW of Firm Power
2 The following charges apply each Billing Period to all Interruptible
Power and Energy delivered to Monsanto under this Agreement:
Interruptible Energy Charge: 16.31 mills per kilowatt hour of Interruptible Energy
Interruptible Demand Charge: $4.09 per kW of Interruptible Power
Replacement Enerqy Price : The following Replacement Energy
Charges apply for each Economic Curtailment Hour in the Billing Period:
Adjusted Index Price multiplied by Replacement Energy.
Monthly Replacement Energy Charges shall equal the sum of hourly
Replacement Energy Charges for the Billing Period. An example showing the
calculation of the Adjusted Index Price for certain Economic Curtailment Hours under
certain stated assumptions is set forth in Exhibit B.
1.4 Power Factor: The prices set forth in this Agreement are predicated
upon the electric power supplied to Monsanto being taken at a nominal power factor of
95 or higher at all times , corresponding to a kilovar demand of 33 kilovars per 100 kW
of Demand. Monsanto shall pay PacifiCorp $0.75 per month for each kilovar of Average
Kilovar Demand in excess of 33 kilovars per 100 kW of Measured Demand. Average
Kilovar Demand shall be the average of the Daily Kilovar Demands for that Billing
Period. Daily Kilovar Demand means, as to any day, the kilovar demand measured
during the 15-minute interval corresponding to the 15-minute interval during which
Monsanto s Measured Demand occurs for the Billing Period which includes that day.
5 Power and energy delivered under this Agreement shall be
recorded by appropriate metering devices as installed and described in Section 7. All
billing statements for power and energy shall show the amount due for the type and
quantity of power and energy purchased and charged in accordance with this
Agreement. Total charges for the Billing Period shall be the sum of the charges for Firm
Power and Energy, Interruptible Power and Energy and Replacement Energy, and
charges for power factor pursuant to section 4.1.4. The billing statement shall also
include details on all interruptions and curtailments for the Billing Period , including the
following information:
Type of interruption or curtailment
Date
Beginning and end time
Duration
Megawatts interrupted or curtailed by Monsanto
. Year-to-date total hours of each type of interruption or curtailment
Replacement Energy purchased , Index Price and Adjusted Index Price
All payments to PacifiCorp under this Agreement shall be delivered
by wire transfer as follows within thirty (30) days of the date of the invoice:
Account Name: PacifiCorp
Bank Name: Bank ONE
Account Number: 5547458
ABA Routing Number: 071000013
Billinq Disputes. In the event that all or a portion of Monsanto s bill , or of
any other claim or adjustment arising hereunder, is disputed , Monsanto shall pay the
undisputed portion of the bill when due. At the time of the payment, Monsanto shall
provide PacifiCorp with a written explanation of any disputed portion withheld
("Monsanto Notice of Billing Dispute
).
Monsanto and PacifiCorp shall seek to make a
determination on any disputed amount within sixty (60) days after issuance of
Monsanto s Notice of Billing Dispute. If it is determined that the disputed portion is due
PacifiCorp, Monsanto shall pay such to PacifiCorp within 15 days following such
determination , together with interest from the date the bill was originally due at the rate
then specified in the Electric Service Regulations or, if no rate is specified , the then
effective prime rate as established by the Morgan Guaranty Trust Bank of New York.
Deposits . If at any time either Party becomes aware of information
regarding the other Party which it believes will substantially impair the other Party
ability to perform its obligations under this Agreement, such Party may request
assurances of performance in writing from the other Party. If such assurances are not
satisfactory to the requesting Party, after consultation with the other Party, the
requesting Party may petition the Commission for appropriate protections including but
not limited to a financial deposit, guarantee or letter of credit.
Section 5. Interruptible or Curtailment Options
Monsanto agrees to provide PacifiCorp with the following three interruptible or
curtailment options in the amounts and in accordance with the terms and conditions of
Exhibits A and B: System Integrity, Operating Reserves and Economic Curtailment.
Section 6: Operations and Maintenance
Licenses Monsanto hereby licenses to PacifiCorp for its use in
connection with this Agreement and during the term of this Agreement, reasonably
sufficient space in Monsanto s 138 kV substation to be used solely by PacifiCorp
metering equipment, static capacitors, not to exceed 30 000 kilovars , and associated
facilities necessary or useful for PacifiCorp s provision of electric service to Monsanto
consistent with Prudent Electrical Practices, which license shall include reasonable
rights of ingress and egress necessary for PacifiCorp s exercise of such license. In the
exercise of this license and their rights, PacifiCorp shall, acting consistent with Prudent
Electrical Practices, not interfere with the operations of Monsanto, shall schedule and
coordinate its activities to avoid such interference and shall abide by Monsanto safety
requirements.
Monsanto s 138 kV Substation Monsanto shall be responsible for the
operation and maintenance of its own facilities and equipment within Monsanto s 138 kV
substation. Any equipment supplied by PacifiCorp shall remain the property of
PacifiCorp and shall be maintained by PacifiCorp.
Operation of Monsanto Electrical Facilities
In order to minimize the hazards to both PacifiCorp s and
Monsanto s electrical systems, protective devices , circuit breakers and other Monsanto
Electrical Facilities interconnected with PacifiCorp shall be operated by qualified
Monsanto personnel only upon prior notification to, and receipt of permission from
PacifiCorp s SCC Region Dispatcher, except as provided in Paragraph 6.4 hereof.
PacifiCorp s Dispatcher shall honor Monsanto s verbal requests for permission to
operate Monsanto s protective devices and other Monsanto Electrical Facilities if such
operation will not, in the opinion of PacifiCorp, impair such facilities and the reliable
operation of PacifiCorp s electrical system or impair service to other Retail Customers of
PacifiCorp; provided , that Monsanto may operate Monsanto s circuit breakers and other
Monsanto Electrical Facilities without prior notification when Monsanto deems it
necessary to protect persons or property at its Plant. In such event, Monsanto shall
assume full and sole liability for injury or damages to persons or property at the Plant
resulting from such operation of the circuit breakers or other Monsanto Electrical
Facilities.
Monsanto currently provides potential and current transformers for
use in connection with its own relaying and metering operations and PacifiCorp may use
such transformers to any reasonable extent for PacifiCorp s metering, relaying, and
communication requirements. Should Monsanto s potential and current transformers
not meet PacifiCorp s requirements, Monsanto shall install any potential and current
transformers required by PacifiCorp that are supplied by PacifiCorp.
PacifiCorp may operate the circuit breakers feeding Monsanto
interconnections to accommodate operation of PacifiCorp s and Monsanto s systems in
a manner consistent with Prudent Electrical Practices; provided , that, except as
provided in Paragraph 6.4, PacifiCorp shall notify Monsanto prior to operating such
circuit breakers and shall keep Monsanto informed as to the operating status of such
breakers.
3.4 Upon notice to Monsanto, PacifiCorp shall have reasonable access
to Monsanto s substation control building(s). PacifiCorp personnel shall comply with all
health , safety, and confidentiality rules, regulations and practices that Monsanto has
provided to PacifiCorp.
5 Any failure of the Monsanto Electrical Facilities to operate
adequately or properly shall not subject PacifiCorp to liability to Monsanto for any
resulting loss or damages, or consequential damages of any kind , and Monsanto
hereby releases PacifiCorp from any such liability.
6.4 Emerqency Conditions. In the event of an emergency resulting in danger
to persons or property, or potential danger to Monsanto s and/or PacifiCorp s systems
either PacifiCorp or Monsanto may open their respective circuit breakers without notice
to the other Party. Whenever possible, the Parties shall notify the other Party prior to
opening any such device , and notification shall be made as soon as possible after the
device has been opened. When corrective actions have been completed, PacifiCorp
shall restore service upon receiving notice and being satisfied that all necessary
corrections have been made.
Relays . PacifiCorp may provide and install on Monsanto s relay panel
under-frequency relays for the purpose of tripping Monsanto s power circuit breakers at
such under-frequencies as may be specified by PacifiCorp in accordance with Prudent
Electrical Practices.
Maintenance of Monsanto Electrical Facilities.
1 Monsanto shall be solely responsible for the operation and
maintenance of the Monsanto Electrical Facilities. Monsanto shall inspect the
Monsanto Electrical Facilities on a regularly scheduled basis and maintain them in safe
operating condition.
PacifiCorp may, but is not required to, inspect the Monsanto
Electrical Facilities during reasonable business hours and if, in the sole judgment of
PacifiCorp, the Monsanto Electrical Facilities are not maintained in safe operating
condition , thereby creating a hazard to persons or property or to the operation of
PacifiCorp s system, PacifiCorp shall notify Monsanto promptly stating the required
maintenance, replacement, or repair necessary to put the Monsanto Electrical Facilities
in safe operating condition and specifying a reasonable period in which to make repair.
Such inspections shall be performed by a person or persons that have been certified as
safety trained , when required , and shall be in full compliance with all Monsanto rules
and regulations. PacifiCorp will advise Monsanto of the names and titles of persons to
be admitted to the Monsanto site. Monsanto shall make such or equivalent repairs
replacement or maintenance within a reasonable time. In the event specified corrective
procedures are not completed as required by the notice , PacifiCorp may, without further
notice to Monsanto, discontinue service to Monsanto. In the event PacifiCorp
discontinues service under this Section , PacifiCorp shall not be liable to Monsanto for
any resulting loss or damage, including, but not limited to , lost profits or consequential
damages of any kind, and Monsanto hereby releases PacifiCorp from any such liability.
The provisions of this Section for the restoration of safe operating conditions are not
subject to the remediation procedures of Section 3.7 of this Agreement.
Section 7: Meterina
PacifiCorp Obliqations. PacifiCorp shall provide, maintain , and test
meters and metering equipment required for purposes of settlement hereunder, except
any potential transformers and current transformers owned by Monsanto under Section
2. Meters , metering equipment and measurement shall be located at the Point of
Delivery. Maintenance and periodic testing procedures with respect to meters and
metering equipment shall be in accordance with generally accepted practices and the
rules and standards established by the Commission. In addition to PacifiCorp s periodic
tests , special tests shall be made if requested by Monsanto, which special tests shall be
conducted at the expense of Monsanto. Monsanto shall furnish without charge
reasonable incidental service, such as removal of tapes and charts , and shall
communicate to PacifiCorp the meter readings necessary for operation. PacifiCorp
designated agents shall have access to such metering equipment at all reasonable
times and shall be permitted to install and operate from time to time any testing
equipment needed in connection with operations or settlements hereunder.
Obliqations. If either Monsanto or PacifiCorp provides check-metering
equipment , information with respect to registrations thereof will be provided.
Meter Testinq . Representatives of PacifiCorp and Monsanto may be
present at all routine or special tests of meters and metering equipment and upon
occasions when any readings are taken for purpose of settlements.
7.4 Adjustments to Bills. If, at any test of any meter or metering equipment
an inaccuracy is disclosed exceeding two percent, the account for service theretofore
supplied shall be adjusted to correct for such inaccuracy for a period of 90 days prior to
the date of such test, or for the period during which such inaccuracy may be determined
to have existed , whichever period is the shorter. Should any meter at any time fail to
register, or should the registration be so erratic as to be meaningless, the quantities
shall be determined from PacifiCorp s check meters or otherwise from the best available
data.
Telecommunications Facilities.Upon PacifiCorp s request, Monsanto
shall maintain a dedicated telephone line for meter reading purposes without charge to
PacifiCorp. Monsanto shall pay all recurring charges related to line operation.
Section 8: Force Majeure
Neither PacifiCorp nor Monsanto shall be subject to any liability or damages for
inability to provide or receive service to the extent that such failure shall be due to
causes beyond the control of either PacifiCorp or Monsanto, including, but not limited to
the following: (a) the operation and effect of any rules , regulations and orders
promulgated by any commission , municipality, or governmental agency of the United
States , or subdivision thereof (so long as the claiming Party has not applied for or
assisted in the application for, and has opposed where and to the extent reasonable
such government action); (b) restraining order, injunction or similar decree of any court;
(c) war; (d) explosion; (e) fire; (f) major breakage or failure of equipment; (g) flood; (h)
earthquake; (i) act of God; U) sabotage; or (k) strikes or boycotts (such events
constituting a "Force Majeure ). Should a Force Majeure occur , the Party claiming Force
Majeure shall have no liability for performance during the period of Force Majeure;
provided, the Party claiming Force Majeure shall make every reasonable attempt to
remedy the cause thereof as diligently and expeditiously as possible.
Section 9: Resale of Power
Electric power and energy delivered to and purchased by Monsanto pursuant to
this Agreement may not be resold directly or indirectly by Monsanto to any person or
entity.
Section 10: Liability
10.Liability. Each Party hereto (the "liability causing Party ) shall defend
indemnify and hold harmless the other Party from and against any liability, damage
loss , costs and expenses, including but not limited to attorneys' fees , on account of
injury to or death of persons including, but not limited to, Monsanto s employees and
PacifiCorp s employees, or damage to property to the extent caused by or arising from
the negligent acts or omissions of the liability causing Party.
10.Limitation of Liability.PacifiCorp shall endeavor at all times to provide
steady and continuous service to Monsanto and shall make reasonable efforts to
prevent irregularities and interruptions. PacifiCorp shall use its best efforts to notify
Monsanto prior to or, in any event, immediately after an interruption or irregularity in
order that Monsanto may attempt to mitigate its damages resulting therefrom. If due to
causes beyond the control of PacifiCorp the supply of electricity is irregular, defective
or fails, PacifiCorp shall not be liable for any physical damages , economic losses, costs
or damages resulting therefrom , including but not limited to special , indirect, incidental
consequential, punitive, or exemplary damages.
Section 11: Successors and Assians
Neither PacifiCorp nor Monsanto shall assign this Agreement without the written
consent of the other Party, which consent shall not be unreasonably withheld , except
Monsanto may assign this Agreement without any such consent to the acquirer of the
majority of the value of the Plant, provided that Monsanto as assignor shall continue to
guarantee the performance by the assignee of the Monsanto obligations under this
Agreement and further provided that PacifiCorp may assign this Agreement without any
such consent to an entity that acquires the majority of the value of PacifiCorp s facilities
in which event PacifiCorp as assignor, shall guarantee the assignee s performance of
PacifiCorp s obligations. Any assignee or successor of Monsanto shall remain subject
to such assignee s or successor s qualification as a customer under PacifiCorp
policies and Electric Service Regulations, and shall be bound by this Agreement , the
Electric Service Regulations, and assume the obligations of Monsanto from the date of
assignment. If assigned with such consent, this Agreement shall inure to the benefit
and be binding upon the assignee , its agents and assigns; provided , that nothing herein
shall prevent either Party from assigning this -Agreement to its parent corporation or to
its survivor in connection with a corporate reorganization , provided that such assignee is
solvent and is able to meet its obligations hereunder.
12.
Section 12: Jurisdiction of Reaulatorv Authorities
Requlatorv Authorities . This Agreement is subject to the approval of the
Commission.
12.Electric Service Requlations . The Electric Service Regulations are
incorporated herein and made a part of the Agreement. Once the Commission
approves the Agreement , the provisions of the Agreement shall take precedence over
any conflicting provisions of PacifiCorp s Electrical Service Regulations. The Parties
acknowledge and agree that they are familiar with such existing regulations and agree
to abide by them and all amendments and changes thereto so approved by the
Commission. In the event that the Commission or any other state , federal , or municipal
authority having jurisdiction issues any rules, regulations , or orders that require
PacifiCorp to alter or amend any of the terms and conditions of this Agreement or to
terminate or curtail the delivery of power and energy to Monsanto, neither Party shall be
liable for damages or losses of any kind whatsoever which the other Party may sustain
as a result of such rule , regulation or order, including consequential damages.
Section 13: Remedies
Each Party may exercise any or all of its rights and remedies under this
Agreement, the applicable Electric Service Regulations and under any applicable laws
rules and regulations. No provision of this Agreement or the Electric Service
Regulations shall be deemed to have been waived unless such waiver is in writing
signed by the waiving Party. No failure by any Party to insist upon the strict
performance of any provision of this Agreement, the Electric Service Regulations or to
exercise any right or remedy consequent upon a breach thereof, shall constitute a
waiver of any such breach of such provision or of any other provision. No waiver of any
provision of this Agreement or the Electric Service Regulations shall be deemed a
waiver of any other provision of this Agreement, the Electric Service Regulations or a
waiver of such provision with respect to any subsequent breach , unless expressly
provided in writing.
Section 14: Representatives and Notices
For the purposes of this Agreement , any notices required to be given hereunder
shall be sent postage prepaid , by registered or certified mail , return receipt requested
(or alternately by facsimile or any other method acceptable by both Parties) to the
Parties at the respective addresses below and shall be deemed to have been given
when received as evidenced by the appropriate receipt verifying delivery:
Representatives of Monsanto:
Plant Manager
Monsanto Company
O. Box 816
Soda Springs, Idaho 83276
Tel: [phone], ex 201
Fax: [phone]
Vice President - Procurement
Monsanto Company
800 N. Lindbergh Blvd.
St. Louis , MO 63167
Tel: [phone]
Fax: [phone]
Representatives of PacifiCorp:
Sr. Vice President, Commercial & Trading
PacifiCorp
825 NE Multnomah , Suite 2000
Portland , OR 97232
With a copy to:
Director, Contract Administration
PacifiCorp
825 NE Multnomah , Suite 600
Portland , OR 97232
Fax: [phone]
This notice requirement does not apply to regular and ordinary business and operation
communications between the Parties' employees.
Section 15: Other Contracts
This Agreement constitutes and contains the entire Agreement of the Parties
hereto and supersedes any and all prior negotiations , correspondence, understanding,
and agreements between the Parties respecting the subject herein. This Agreement
may not be modified , altered , or changed in any manner whatsoever except pursuant to
the express provisions of this Agreement or by written agreement between the Parties
hereto, subject to Commission approval.
Section 16: Governina Law; Jurisdiction; Venue
All provisions of this Agreement and the rights and obligations of the Parties shall
in all cases be governed by and construed in accordance with the laws of the State of
Idaho applicable to contracts executed in and to be wholly performed in Idaho by
persons domiciled in the State of Idaho. Each Party hereto agrees that any suit, action
or proceeding seeking to enforce any provision of, or based on any matter arising out of
or in connection with , this Agreement, the Electric Service Regulations or the
transactions contemplated hereby or thereby, may only be brought before the
Commission , the Federal courts located within the State of Idaho, or state courts of the
State of Idaho , and each Party hereby consents to the exclusive jurisdiction of such
forums (and of the appellate courts therefrom) in any such suit, action or proceeding.
Section 17: Attorney s Fees
If any suit or action arising out of or related to this Agreement or the Electric
Service Regulations is brought by any Party, the prevailing Party shall be entitled to
recover the costs and fees (including, without limitation , reasonable attorneys' fees, the
fees and costs of experts and consultants, copying, courier and telecommunication
costs , and deposition costs and all other costs of discovery) incurred by such Party in
such suit or action, including, without limitation , any post-trial or appellate proceeding, or
in the collection or enforcement of any judgment or award entered or made in such suit
or action.
Section 18: Cooperation
18.Whenever this Agreement requires that one Party comply with the rules
regulations , standards or requirements of the other Party, the Parties agree to
cooperate with each other in requesting and providing such rules , regulations
standards or requirements on a timely basis.
18.In order to facilitate the economic management of PacifiCorp s wholesale
power transactions necessary to carry out this Agreement, Monsanto agrees to inform
PacifiCorp in a timely manner of planned furnace outages and of the expected return of
furnaces to service.
Section 19: Exhibits
The following Exhibits are attached to and incorporated into this Agreement by
reference:
Exhibit A: Operating Reserves and System Integrity Options
Exhibit B: Economic Curtailment Option
Section 20: Headinas/References
The descriptive headings contained in this Agreement are included for reference
only and shall not affect in any way the meaning or interpretation of this Agreement.
References in this Agreement to Sections are to Sections of this Agreement unless
otherwise stated or evident from the context.
Section 21: Construction of Aareement
This Agreement was drafted as a joint effort of both Parties and may not be
construed against one Party over the other in the event of a controversy over its
meaning.
MRY-12-2003 13: 14 FROM: PRCIFICORP 95038136260 TO: 912083899040 2/2
This Agreement may be executed as one instrument signed by the Parties or
may be executed in separate counterparts. Each separate counterpart is deemed an
original.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their authorized officers or representatives as of the date fir$t hereinabove
written.
MONSANTO COMPANY
By-
Its Vice President Its Vice President
!,:) d 1t::Il.U.l
on 22:
This Agreement may be executed as one instrument signed by the Parties or
may be exeouted in separate counterparts. Each separate counterpart Is deemed an
original.
IN WITNESS WHEREOFs the Parties have caused this Agreement to be
executed by their authorized .officers or representatives as of the date first hereinabove
wrmen.
ACIFfCORP
Its Vice President Its Vice President
2:0'6019 2:f:G 802:8~3~aO8' 3AN' NOSiO '3N I ~~~0S :S1 ~002:-2:1-A~W
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