20100205Revised, Restated Agreement.pdf

~~~OUNTAIN RECEI
1010 FEB -S AM 9: 30
201 South Main, Suite 2300
Salt Lake City, Utah 84111
Febru 5, 2010
VI OVERNIGHT DELIVERY
Offce of the Secreta
Jean D. Jewell
472 W Washington St
Boise, il 83720-0074
RE: Case No. P AC-E-09-05
Revised and Restated Power Purchase Agreement between Lower Valley Energy, Inc
(''Seller'', and PacijCorp, entered into Febru 1,2010
Dear Ms. Jewell,
Attched please fid a copy of the Revised and Restated Power Purchase Agreement Between
Lower Valley Energy, Inc. and PacifCorp, executed on Febru 1, 2010. Ths agreement
amends the paries' Power Purchase Agreement dated May 22, 2009, which ths Commssion
approved on July 16,2009 in Order No. 30864, in Case No. PAC-E-09-05. The purose of the
amendment is to add seller's 597 kW Lower Facilty, which was completed in October 2009, to
the paries' power purchase agreement. The attched agreement is a ful integrtion of the
paries' July 16, 2009 agreement, First Amendment to Recita F (amended by letter on July 7,
2009), and their curent amendment adding the Lower Facilty. Please file ths agreement
accordingly.
If you have any questions about ths agrement, please contact Ted Weston at [phone].
Sincerely,
Ud g i)// .. 1/. Jt/~r¿~ 1111Danel Solander (
Attorney for PacifiCorp
Executed PP A
t~; .1:rvl .,,..
iUIOFEB -5 AM 9: 30
E/\I
REVISED AND RESTATED POWER PURCHASE AGREEMtNlFEB -5 AM 9: 3 r
BETWEEN
LOWER VALLEY ENERGY, INC.
(two non-fueled, non-Ievelized, non-MAG Qualifying Facilties located in PacifiCorp
Control Area interconnected to non-PacifiCorp system in Wyoming delivering power to
PacifiCorp in Idaho-each 10aMW/Month or less)
AN
PACIFICORP
Section 1: Definitions........... ............................................. ....................................................... ....... 1
Section 2: Term, Commercial Operation Date .................................... ............................................ 7
Section 3: Representations and Waranties...................................................................................... 8
Section 4: Delivery of Energy and Capacity.................................................................................. 1 0
Section 5: Purchase Prices ............................................................................................................. 13
Section 6: Operation and Control ..................................................................................................14
Section 7: Motive Force.................................................................................................................16
Section 8: Metering........................................................................................................................ 16
Section 9: Bilings, Computations and Payments ..... ...................... ............................................... 17
Section 10: Defaults and Remedies ........... ............ ............ ........................ ........... ......................... 17
Section 11: Indemnification........................................................................................................... 19
Section 12: Liability and Insurance ...............................................................................................20
Section 13: Force Majeure............................................................................................................. 22
Section 14: Several Obligations..................................................................................................... 23
Section 15: Choice of Law......................................................................... ....................................23
Section 16: Parial Invalidity ...... ........ ................. .......... ..................... ........................................... 23
Section 17: Waiver ........................................................................................................................24
Section 18: Governmental Jurisdiction and Authorizations ................................... .................. ..... 24
Section 19: Successors and Assigns......... ............................ ..................... ........... ............ ............. 24
Section 20: Entire Agreement........................................................................................................24
Section 21 : Notices .... .................... ................... .......... .......................... ....... ........... ...... ................. 24
REVISED AND RESTATED POWER PURCHASE AGREEMENT
THIS REVISED AND REST~D POWER. PURCHASE AGREEMENT ("Revised
Agreement"), entered into this .~ - day of lt-,bv'ul\~\20~, is between Lower Valley
Energy, Inc., a Wyoming Corporation (the "Seller") and ~cifiCorp, an Oregon corporation
acting in its regulated electric utilty capacity ("PacifiCorp"). Seller and PacifiCorp are referred
to collectively as the "Parties" and individually as a "Part".
RECITALS
A. Seller owns, operates and maintains two ru of river hydroelectric generating
facilties for the generation of electric power located on Swift Creek, in or near the town of
Afton, Lincoln County, Wyoming. The upriver plant was completed in May 2009 and has a
Facility Capacity Rating of 940-kilowatt (kW) (the "Upper Facilty"). The downver plant
was completed in October 2009 and has a Facilty Capacity Rating of 535 kilowatts (kW) (the
"Lower Facilty"); and
B. Seller sells and PacifiCorp purchases Net Output from the Upper Facilty pursuant
to a Power Purchase Agreement dated May 22, 2009 ("Original PP A"); and
C. Seller and PacifiCorp wish to hereby amend the Original PP A to add provision for
the purchase of Net Output from the Upper Facilty and Lower Facilty, jointly, according to the
terms and conditions set forth herein; and
D. Seller intends to operate Upper Facilty and Lower Facilty-- each a separate
Qualifying Facilty, as such term is defined in Section 1.37 below-as a single generating
facility, for puroses of this Revised PPA (Facilty); and
E. Seller estimates that the average anual Net Output to be delivered by the Facilty
to PacifiCorp is 6,887,244 kilowatt-hours (kWh) pursuat to the monthy Energy Delivery
Schedule in Exhibit D hereto, which amount of energy PacifiCorp will include in its resource
planng; and
F. Seller shall sell and PacifiCorp shall purchase all the Net Output from the Facilty
in accordance with the terms and conditions of this Agreement.
G. Seller intends to transmit Net Output from the Facility to PacifiCorp via
transmission facilties operated by a third par, and PacifiCorp intends to accept scheduled firm
delivery of Seller's Net Output, under the terms of this Agreement, including the Generation
Scheduling Addendum attached as Addendum W and incorporated contemporaneously
herewith.
H. This Agreement is a "New QF Contract" under the PacifiCorp Inter-Jurisdictional
Cost AllocationRevised Protocol.
NOW, THEREFORE, the Paries mutually agree as follows:
SECTION 1: DEFINITIONS
When used in this Agreement, the following terms shall have the following meangs:
1
1.1 "Adjusted Scheduled Monthly Energy Delivery" shall have the meaning set
forth in Section 4.3
1.2 "Amendment Date" is defined in Section 2.1.
1.3 "As-built Supplement" shall be a supplement to Exhibit A, provided by Seller
following completion of construction of the Facilty, describing the Facilty as actually built.
1.4 "Biling Period" means the time period between PacifiCorp's reading of its power
purchase meters at the Facilty and for ths Agreement shall coincide with calendar months.
1.5 "Capacity Factor" means, for any given period of time, the Net Output divided by
the product of Facilty Capacity Rating and the total hours in the given period of time.
1.6 "Commercial Operation" means the Facilty is fully operational and reliable, at
not less than ninety percent (90%) of the expected Facilty Capacity Rating, and interconnected
and synchronized with the Tranmission Entity's System. In order to meet the requirements for
Commercial Operation, all of the following events shall have occured:
1.6.1 PacifiCorp shall have received a certificate addressed to PacifiCorp
from a Licensed Professional Engineer (a) stating the Facilty Capacity Rating of the
Facility at the anticipated time of Commercial Operation and (b) stating that the Facilty
is able to generate electric power reliably in amounts required by ths Agreement and in
accordance with all other terms and conditions of this Agreement;
1.6.2 Sta-Up Testing of the Facility shall have been completed;
1.6.3 PacifiCorp has received an executed copy of Seller's Transmission
Agreement(s); and
1.6.4 PacifiCorp shall have received a certificate addressed to PacifiCorp
from a Licensed Professional Engineer, or an attorney in good stading in Idaho or
Wyoming, stating that Seller has obtained all Required Facilty Documents and, if
requested by PacifiCorp in writing, Seller shall have provided copies of any or all such
requested Required Facilty Documents.
Seller shall provide notice to PacifiCorp when Seller believes that the Facilty has achieved
Commercial Operation. PacifiCorp shall have ten (10) days after receipt of such notice either to
confrm to Seller that all of the conditions to Commercial Operation have been satisfied or have
occured, or to state with specificity those conditions that PacifiCorp reasonably believes have
not been satisfied or have not occured. If, within such ten (10) day period, PacifiCorp does not
respond or notifies Seller confirming that the Facilty nas achieved Commercial Operation, the
original date of receipt of Seller's notice shall be the Commercial Operation Date. If PacifiCorp
notifies Seller within such ten (10) day period that PacifiCorp believes the Facilty has not
achieved Commercial Operation, Seller shall be obligated to address the concerns stated in
PacifiCorp's notice to the mutual satisfaction of both Paries, and Commercial Operation shall be
deemed to occur on the date of such satisfaction, as specified in a notice from PacifiCorp to
Seller. If Commercial Operation is achieved at less than one hundred percent (100%) of the
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expected Facilty Capacity Rating, Seller shall provide PacifiCorp an expected date for achieving
the expected Facilty Capacity Rating, and the Facilty's Capacity Rating on that date shall be the
final Facility Capacity Rating under this Agreement. In no event wil delay in achieving the
expected Facility Capacity Rating beyond the Commercial Operation Date postpone the
Expiration Date specified in Section 2.1.
1.7 "Commercial Operation Date" means the date the Facilty first achieves
Commercial Operation.
1.8 "Commission" means the Idaho Public Utilties Commission.
1.9 "Conforming Energy" means all Net Energy delivered to the Point of Delivery
except Non-Conforming Energy.
1.10 "Conforming Energy Price" means the applicable price for Conforming Energy
and capacity, specified in Section 5.1.
1.11 "Contract Year" means a twelve (12) month period commencing at 00:00 hours
Mountain Prevailng Time ("MPT") on Januar 1 and ending on 24:00 hours MPT on
December 31; provided, however, that the first Contract Year shall commence on the
Commercial Operation Date and end on the next succeeding December 31, and the last Contract
Year shall end on the Expiration Date, unless earlier terminated as provided herein.
1.12 "Effective Date" means July 16,2009, the Effective Date of the Original PPA.
1.13 "Energy Delivery Schedule" shall have the meaning set forth in Section 4.2 of
this Agreement.
1.14 "Expiration Date" shall have the meaning set fort in Section 2.1 of this
Agreement.
1.1 5 "Facilty" means Seller's Upper Facility and Seller's Lower Facilty, both, unless
otherwise noted, including the Seller's Interconnection Facilities, as described in the Recitas,
Exhibit A, and Exhibit B. "FaciltY(upper)" and "Facilty(lower)" refer to the Upper Facilty and
Lower Facility, individually. The term "Facilty" without any such suffix refers to the entire
Facilty unless the context requires otherwise. Facilty(upper) and Facilty(lower) are described
separately in Exhibit A.
1.16 "Facilty Capacity Rating" means the sum of the Nameplate Capacity Ratings for
all generators comprising the Facilty.
1.17 "Force Majeure" has the meaning set forth in Section 13.1.
1.18 "Generation Scheduling Addendum" means Addendum W, the portion of this
Agreement providing for the measurement, scheduling, and delivery of Net Output from the
Facilty to the Point of Delivery via a non-PacifiCorp Transmission Entity(s).
3
1.19 "Inadvertent Energy" means energy delivered to the Point of Interconnection(x)
(1) in excess of the Maximum Monthly Purchase Obligation; or (2) at an average hourly rate
exceeding the Maximum Facilty Delivery Rate(x). Inadvertent Energy is not included in Net
Output.
1.20 "Index Price", for each day, shall mean the weighted average of the average Peak
and Off-Peak firm energy market prices, as published in the Intercontinental Exchange (ICE)
Day Ahead Power Price Report for the Palo Verde Hub. For Sunday and NERC holidays, the
24-Hour Index Price shall be used, unless ICE shall publish a Firm On-Peak and Firm Off-Peak
Price for such days for Palo Verde, in which event such indices shall be utilzed for such days. If
the ICE index or any replacement of that index ceases to be published durng the term of this
Agreement, PacifiCorp shall select as a replacement a substantially equivalent index that, after
any appropriate or necessary adjustments, provides the most reasonable substitute for the index
in question. PacifiCorp's selection shall be subject to Seller's consent, which Seller shall not
uneasonably withhold, condition or delay.
1.21 "Initial Year Energy Delivery Schedule" shall have the meaning set forth in
Section 4.2.1.
1.22 "Interconnected Utility" means Lower Valley Energy, Inc., the operator of the
electrc utilty system at the Points of Interconnection.
1.23 "Interconnection Facilties" means all the facilties and ancilary equipment used
to interconnect the Facilty to the Interconnected Utilty, including electrical transmission lines,
upgrades, transformers, and associated equipment, substations, relay and switching equipment,
and safety equipment.
1.24 "Licensed Professional Engineer" means a person acceptable to PacifiCorp in its
reasonable judgment who is licensed to practice engineering in the state of Wyoming, who has
training and experience in the engineering discipline(s) relevant to the matters with respect to
which such person is called to provide a certification, evaluation and/or opinion, who has no
economic relationship, association, or nexus with the Seller, and who is not a representative of a
consulting engineer, contractor, designer or other individual involved in the development of the
Facilty, or of a manufacturer or supplier of any equipment installed in the Facilty. Such
Licensed Professional Engineer shall be licensed in an appropriate engineering discipline for the
required certification being made. The engagement and payment of a Licensed Professional
Engineer solely to provide the certifications, evaluations and opinions required by this
Agreement shall not constitute a prohibited economic relationship, association or nexus with the
Seller, so long as such engineer has no other economic relationship, association or nexus with the
Seller.
1.25 "Material Adverse Change" shall mean, with respect to the Seller, if the Seller,
in the reasonable opinion of PacifiCorp, has experienced a material adverse change in abilty to
fulfill its obligations under this Agreement.
4
1.26 "Maximum Curtailed Facilty Delivery Rate" means the maximum
instantaneous rate (kW) at which the Facilty is capable of delivering Net Output at the Points of
Interconnection during a Qualifying Curtilment.
1.27 "Maximum Facilty Delivery Rate" means the maximum instantaneous rate (kW)
at which the Facility is capable of delivering Net Output at the Points of Interconnection, as
specified in Exhibit A, and in compliance with the Facilty's generation interconnection
agreement, if applicable.
1.28 "Maximum Monthly Purchase Obligation" meas the maximum amount of
energy PacifiCorp is obligated to purchase under ths Agreement in a calendar month, In
accordance with Commssion Order 29632, the Maximum Monthly Purchase Obligation for the
Facilty for a given month, in kWh, shall equal 10,000 kW multiplied by the total number of
hours in that month.
1.29 "Motive Force Plan" shall have the meaning set forth in Section 7 of this
Agreement.
1.30 "Nameplate Capacity Rating" means the maximum instataneous generating
capacity of any qualifying small power or cogeneration generating unit supplying all or par of
the energy sold by the Facilty, expressed in MW, when operated consistent with the
manufacturer's recommended power factor and operating parameters, as set forth in a notice
from Seller to PacifiCorp delivered before the Commercial Operation Date and, if applicable,
updated in the As-built Supplement.
1.31 "Net Energy" means the energy component, in kWh, of Net Output.
1.32 "Net Output" means all energy and capacity produced by the Facility, less station
use and less transformation and transmission losses and other adjustments, if any. For purposes
of calculating payment under ths Agreement, Net Output of energy shall be the amount of
energy flowing though the Points of Interconnection, less any station use not provided by the
Facilty. Net Output does not include Inadvertent Energy.
1.33 "Non-Conforming Energy" means for any Billng Period: (1) that portion of Net
Energy delivered to the Point of Delivery in excess of 110% of the Scheduled Monthly Energy
Delivery for that Biling Period delivered subsequently to that initial 110%; or (2) all Net Energy
delivered to the Point of Delivery when Net Energy delivered is less than 90% of the Scheduled
Monthly Energy Delivery for that Biling Period; or (3) all Net Output produced by the Facilty
prior to the Commercial Operations Date.
1.34 "Non-Conforming Energy Price" means the applicable price for Non-
Conformng Energy and capacity, specified in Section 5.1.
1.35 "Off-Peak Hours" means all hours of the week that are not On-Peak Hours.
1.36 "On-Peak Hours" meas hours from 7:00 a.m. to 11 :00 p.m. Mountain Prevailng
Time, Monday through Saturday, excluding Western Electricity Coordinating Council (WECC)
and Nort American Electric Reliabilty Corporation (NERC) holidays.
5
1.37 "PacifiCorp Transmission" means PacifiCorp, an Oregon corporation, acting in
its transmission fuction capacity.
1.38 "Point of Delivery" means PacifiCorp's 161 kV busbar at the Goshen Substation,
Idaho the point of interconnection between Bonnevile Power Administration's system and
PacifiCorp's system where PacifiCorp has agreed to receive Seller's Net Output.
1.39 "Point of Interconnection(iower( means the high voltage side of Seller's step-up
transformer at the point of interconnection between Seller's FaciltY(lower) and the Interconnected
Utilty's system.
1.40 "Point of Interconnection(upper( means the high voltage side of Seller's step-up
transformer at the point of interconnection between Seller's Facilty(upper) and the Interconnected
Utilty's system.
1.41 "Points of Interconnection" means both the Point of Interconnection(lower) and
Point of Interconnectiol1upper).
1.42 "Prime Rate" means the rate per anum equal to the publicly anounced prime
rate or reference rate for commercial loans to large businesses in effect from time to time quoted
by JPMorgan Chase & Co. . If a JPMorgan Chase & Co. prime rate is not available, the
applicable Prime Rate shall be the anounced prime rate or reference rate for commercial loans
in effect from time to time quoted by a ban with $10 bilion or more in assets in New York
City, N.Y., selected by the Party to whom interest based on the prime rate is being paid.
1.43 "Prudent Electrical Practices" means any of the practices, methods and acts
engaged in or approved by a significant portion of the electrical utilty industry or any of the
practices, methods or acts, which,. in the exercise of reasonable judgment in the light of the facts
known at the time a decision is made, could have been expected to accomplish the desired result
at the lowest reasonable cost consistent with reliabilty, safety and expedition. Prudent Electrcal
Practices is not intended to be limited to the optimum practice, method or act to the exclusion of
all others, but rather to be a spectrum of possible practices, methods or acts.
1.44 "Qualifying Curtailment" shall have the meaning set forth in Section 4.3.
1.45 "QF" means "Qualifying Facilty", as that term is defined in the version ofFERC
Regulations (codified at 18 CFR Par 292) in effect on the date of this Agreement.
1.46 "Replacement Period", "Net Replacement Power Costs", "Replacement Price"
and "Replacement Volume" shall have the meanings set forth in Section 10.4 of this
Agreement;
1.47 "Required Facilty Documents" means all material licenses, permits,
authorizations, and agreements necessar for construction, operation, and maintenance of the
Facilty, including without limitation those set fort in Exhibit C.
1.48 "Revised Agreement" means this Revised and Restated Power Purchase
Agreement, which supersedes the Original PPA as of the Amendment Date.
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1.49 "Scheduled Maintenance Periods" means those times scheduled by Seller with
advance notice to PacifiCorp as provided in Section 6.2 unless otherwse mutually agreed.
1.50 "Scheduled Monthly Energy Delivery" means the Net Energy scheduled to be
delivered to the Point of Delivery during a given calendar month, as specified by Seller in the
Energy Delivery Schedule.
1.51 "Start-Up Testing" means the completion of required factory and start-up tests as
set forth in Exhibit E hereto.
1.52 "Subsequent Energy Delivery Schedule" shall have the meanng set fort in
Section 4.2.3.
1.53 "Tariff' means the PacifiCorp FERC Electric Tariff Fift Revised Volume No.ll
Pro Forma Open Access Transmission Tarff, as revised from time to time.
1.54 "Transmission Agreement(s)" means the agreement(s) (or contemporaneous
agreements) between Seller and the Transmitting Entity(s) providing for Seller's uninterrptible
right to transmit Net Output to the Point of Delivery.
1.55 "Transmitting Entity(s)" means the Bonnevile Power Administration, the (non-
PacifiCorp) operator( s) of the transmission system( s) between the Points of Interconnection and
the Point of Delivery. .
SECTION 2: TERM, COMMERCIAL OPERATION DATE
2.1 This Revised Agreement shall become effective at 12:00:01 am on the day
following execution by both Paries and afer approval by the Commission ("Amendment
Date"); provided, however, this Revised Agreement shall not become effective until the
Commission has determined that the prices to be paid for energy and capacity are just and
reasonable, in the public interest, and that the costs incured by PacifiCorp for purchases of
capacity and energy from Seller are legitimate expenses, all of which the Commission will allow
PacifiCorp to recover in rates in Idaho in the event other jurisdictions deny recovery of their
proportionate share of said expenses.
Unless earlier terminated as provided herein, this Revised Agreement shall remain in effect until
May 1,2012 ("Expiration Date").
2.2 Time is of the essence of this Revised Agreement, and Seller's abilty to meet
certain requirements prior to the Commercial Operation Date and to achieve Commercial
Operations by the Scheduled Commercial Operation Date is critically importt. Therefore,
2.2.1 PacifiCorp deemed Seller to have achieved the Commercial
Operation Date on ("Commercial Operation Date"), the date the Lower
Facilty achieved Commercial Operation. (The Upper Facilty achieved commercial
operation under the Original PP A on July 24, 2009. J
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2.2.2 By March 31, 2010, Seller shall provide PacifiCorp with a copy of
an executed Transmission Agreement(s), whose terms shall include: (1) reserved capacity
equal to or greater than the Maximum Facilty Delivery Rate of Seller's combined
Facilty, (2) a termination date (including any rollover rights) equal to or greater than the
Expiration Date of this Agreement; (3) and shall otherwse be consistent with this
Agreement.
2.2.3 By March 31, 2010, Seller shall provide PacifiCorp with an As-built
Supplement acceptable to PacifiCorp.
2.2.4 PacifiCorp has received an executed copy of Exhibit H-Seller's
Interconnection Request.
SECTION 3: REPRESENTATIONS AND WARRNTIES
3.1 PacifiCorp represents, covenants, and warrants to Seller that:
3.1.1 PacifiCorp is duly organized and validly existing under the laws of
the State of Oregon.
. 3.1.2 PacifiCorp has the requisite corporate power and authority to enter
into this Agreement and to perform according to the terms of this Agreement.
3.1.3 PacifiCorp has taken all corporate actions required to be taken by it
to authorize the execution, delivery and performance of this Agreement and the
consumation of the transactions contemplated hereby.
3.1.4 Subject to Commission approval, the execution and delivery of this
Agreement does not contravene any provision of, or constitute a default under, any
indenture, mortgage, or other material agreement binding on PacifiCorp or any valid
order of any cour, or any reguatory agency or other body having authority to which
PacifiCorp is subject.
3.1.5 Subject to Commission approval, this Agreement is a valid and
legally binding obligation of PacifiCorp, enforceable against PacifiCorp in accordance
with its terms (except as the enforceabilty of this Agreement may be limited by
banptcy, insolvency, ban moratorium or similar laws affecting creditors' rights
generally and laws restricting the availability of equitable remedies and except as the
enforceabilty of this Agreement may be subject to general principles of equity, whether
or not such enforceabilty is considered in a proceeding at equity or in law).
3.2 Seller represents, covenants, and warants to PacifiCorp that:
3.2.1 Seller is a Wyoming corporation duly organized and validly existing
under the laws of Wyoming.
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3.2.2 Seller has the requisite power and authority to enter into this
Agreement and to perform according to the terms hereof, including all required
regulatory authority to make wholesale sales from the Facility.
3.2.3 Seller's shareholders, directors, and officers have taen all actions
required to authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby.
3.2.4 The execution and delivery of this Agreement does not contravene
any provision of, or constitute a default under, any indenture, mortgage, or other material
agreement binding on Seller or any valid order of any cour, or any regulatory agency or
other body having authority to which Seller is subject.
3.2.5 This Agreement is a valid and legally binding obligation of Seller,
enforceable against Seller in accordance with its terms (except as the enforceabilty of
this Agreement may be limited by banptcy, insolvency, ban moratorium or similar
laws affecting creditors' rights generally and laws restricting the availabilty of equitable
remedies and except as the enforceabilty of this Agreement may be subject to general
principles of equity, whether or not such enforceabilty is considered in a proceeding at
equity or in law).
3.2.6 The Facilty is and shall for the term of ths Agreement continue to
be two QFs. Seller has provided the appropriate QF certification, which may include a
Federal Energy Regulatory Commission self-certification to PacifiCorp prior to
PacifiCorp's execution of this Agreement. At any time PacifiCorp has reason to believe
during the term of this Agreement that Seller's status as a QF is in question, PacifiCorp
may require Seller to provide PacifiCorp with a wrtten legal opinion from an attorney in
good standing in the state of Idaho and who has no economic relationship, association or
nexus with the Seller or the Facilty, stating that the Facilty is a QF and providing
sufficient proof (including copies of all documents and data as PacifiCorp may request)
demonstrating that Seller has maintained and wil continue to maintain the Facility as a
QF.
3.2.7
correct.
The description of Seller's Facility in Exhibit A and Exhibit B is
3.2.8 Neither the Seller nor any of its principal equity owners is or has
within the past two (2) years been the debtor in any banptcy proceeding, is unable to
pay its bils in the ordinary course of its business, or is the subject of any legal or
reguatory action, the result of which could reasonably be expected to impair Seller's
abilty to own and operate the Facilty in accordance with the terms of this Agreement.
9
3.2.9 Seller has not at any time defaulted in any of its payment obligations
for electricity purchased from PacifiCorp.
3.2.10 Seller is not in default under any of its other agreements and is
curent on all of its financial obligations.
3.2.11 Seller owns all right, title and interest in and to the Facility, free and
clear of all liens and encumbrances other than liens and encumbrances related to third-
pary financing of the Facilty.
3.3 Notice. If at any time during this Agreement, any Pary obtains actual knowledge
of any event or information which would have caused any of the representations and waranties
in this Section 3 to have been materially untrue or misleading when made, such Par shall
provide the other Party with written notice of the event or information, the representations and
waranties affected, and the action, if any, which such Pary intends to take to make the
representations and warranties true and correct. The notice required pursuant to this Section
shall be given as soon as practicable after the occurence of each such event.
SECTION 4: DELIVERY OF ENERGY AND CAPACITY
4.1 Delivery and Acceptance of Net Output-Unless otherwse provided herein,
PacifiCorp wil purchase and Seller will sell all of the Net Output from the Facilty.
4.2 Energy Delivery Schedule-Seller shall prepare and provide to PacifiCorp, on an
ongoing basis, a written schedule of Net Energy expected to be delivered to the Point of Delivery
by the Facilty ("Energy Delivery Schedule"), in accordance with the following:
4.2.1 During the first twelve full calendar months followig the
Commercial Operations Date, Seller predicts that the Facilty wil produce and deliver to
the Point of Delivery the following monthly amounts ("Initial Year Energy Delivery
Schedule"):
10
Month Faciltyupper Faciltylower Facilty Energy
Energy Delivery Energy Delivery Delivery
(kWh)(kWh)(SMED)
kWh
January 193,440 103,674 297,114
February 147,840 82,376 230,216
March 163,680 86,937 250,617
April 282,939 121,562 404,501
May 477,827 271,651 749,478
June 570,593 362,918 933,511
July 576,258 347,058 923,316
August 550,511 237,126 787,637
September 382,459 155,030 537,489
October 374,729 149,273 524,002
November 300,058 125,785 425,843
December 223,200 113,611 336,811
4.2.2 Seller may revise the Initial Year Energy Delivery Schedule any
time prior to the Commercial Operation Date.
4.2.3 Beginning at the end of the ninth full calendar month of operation,
and at the end of every 3rd month thereafter, Seller shall supplement the Energy Delivery
Schedule with three additional months of forward estimates (which shall be appended to
this Agreement as Exhibit D) ("Subsequent Energy Delivery Schedule"), such that the
Energy Delivery Schedule will provide at least six months of scheduled energy estimates
at all times. Seller shall provide Subsequent Energy Delivery Schedules no later than
5:00 pm of the 5th day afer the due date. If Seller does not provide a Subsequent Energy
Delivery Schedule by the above deadline, scheduled energy for the omitted period shall
equal the amounts scheduled by Seller for the same three-month period during the
previous year.
4.2.4 Beginning with the end of the third month after the Commercial
Operation Date and at the end of every thrd month thereafter; (1) the Seller may not
revise the immediate next three months of previously provided Energy Delivery
Schedules, but by written notice given to PacifiCorp no later than 5:00 PM of the 5th day
following the end of the previous month, the Seller may revise all other previously
provided Energy Delivery Schedules. Failure to provide timely written notice of changed
amounts will be deemed to be an election of no change.
4.3 Adjustment of Energy Delivery Schedule. IfPacifiCorp is excused from accepting
all or part of Seller's Net Output due to the occurrence of circumstaces specified in Section
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6.3.1 and 6.3.2 and, or if Seller is excused from delivery due to the occurrence of circumstaces
specified in Section 6.4, or due to a combination thereof ("Qualifying Curtailment") the
Scheduled Monthly Energy Delivery will be adjusted, pro rata ("Adjusted Scheduled Monthly
Energy Delivery"). The Adjusted Scheduled Monthly Energy Delivery shall be calculated as
follows:
SMED(adj)=SMED*(l- t(HCi * DRm-DRc¡)lìi=l Ht DRm ~
Where:
SMED(adj)=
Scheduled Monthly Energy Delivery for the month in which the
curailment occurs
Adjusted Scheduled Monthly Energy Delivery for the month in
which curilment oC"curs
total hours of the Qualifying Curilment in the month subject of
this calculation
tota hours in the month in which curilment occurs
SMED
Hc¡
Ht
DRc¡ = the Maximum Curled Facilty Delivery Rate
DRm = the Maximum Facilty Delivery Rate
i a Qualifying Curailment
n the number of Qualifying curailments in the month
Where Qualifying Curilments overlap, each distinct period of overlap shall be
calculated as a separate Quaifying Curailment such that no hour within a month
may figure into more than one Qualifying Curilment.
4.4 Termination for Non-availabilty. Unless excused by an event of Force Majeure,
Seller's failure to deliver any Net Energy to the Point of Delivery for a continuous period of
three months shall constitute an event of default.
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SECTION 5: PURCHASE PRICES
5.1 Energy Purchase Price. Except as provided in Section 5.3, PacifiCorp wil pay
Seller non-Ievelized, Conforming Energy or Non-Conforming Energy Purchase Prices for
capacity and energy adjusted for seasonality and On-PeakOff-Peak Hours using the following
formulae, in accordance with Commission Order 30480 and Errata to Order 30480:
Conforming Energy Purchase Price = ARce * MPM
Non-Conforming Energy Purchase Price = Minimum of (ARce * MPM; PV-85)
Where:
ARc = the Conforming Energy Annual Rate from Table 1, below, for the year of
the Net Output;
MPM = the monthly On-Peak or Off-Peak multiplier from Table 2 below, that
corresponds to the month of the Net Output and whether the Net Output
occurred durng On-Peak Hours or Off-Peak Hours.
PV -85 = 85% of the monthly weighted average of the daily Index Price.
Example calculations are provided in Exhibit G.
Table 1: Conforming Energy Annual Rates
Conforming Energy
Annual Rate (ARe)
Year S/MWh
2009 76.73
2010 75.83
2011 77.95
2012 80.24
Table 2: Monthly On-PeaklOff-Peak Multipliers
Month On-Peak Off-Peak
Hours Hours
Januar 103%94%
Februar 105%97%
March 95%80%
April 95%76%
May 92%63%
June 94%65%
July 121%92%
August 121%106%
September 109%99%
October 115%105%
November 110%96%
December 129%120%
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5.2 Payment
For the Biling Period in each Contract Year:
5.2.1 If Net Energy delivered to the Point of Delivery is between 90% and
110% of the Scheduled Monthy Energy Delivery, then:
Payment = Conforming Energy (kWh) times Conforming Energy Puchase Price
($/MWh) divided by 1000.
5.2.2 If Net Energy delivered to the Point of Delivery is less than 90% of
the Scheduled Monthly Energy Delivery, then:
Payment = Non-Conforming Energy (kWh) times Non-Conforming Energy
Purchase Price ($/MWh) divided by 1000.
5.2.3 If Net Energy delivered to the Point of Delivery is greater than 110%
of the Scheduled Monthy Energy Delivery, then
Payment = Conforming Energy (kWh) times Conforming Energy Purchase Price
($/MWh) divided by 1000 plus Non-Conforming (kWh) times Non-
Conformng Energy Purchase Price ($/MWh) divided by 1000.
5.3 Inadvertent Energy. PacifiCorp may accept Inadvertent Energy at its sole
discretion, but will not purchase or pay for Inadvertent Energy.
SECTION 6: OPERATION AND CONTROL
6.1 Seller shall operate and maintain the Facilty in a safe manner in accordance with
this Agreement, the Facility's generation interconnection agreement, if applicable, Transmission
Agreement(s), Prudent Electrical Practices and in accordance with the requirements of all
applicable federal, stte and local laws and the National Electric Safety Code as such laws and
code may be amended from time to time. PacifiCorp shall have no obligation to purchase Net
Output from the Facilty to the extent the interconnection between the Facilty and the Point of
Delivery is disconnected, suspended or interrpted, in whole or in par, pursuat to the Facility's
generation interconnection agreement, if applicable, or Transmission Agreement(s), or to the
extent generation curailment is required as a result of Seller's non-compliance with the
Facilty's generation interconnection agreement, if applicable, or Transmission Agreement(s).
PacifiCorp shall have the right to inspect the Facilty to confirm that Seller is operating the
Facility in accordance with the provisions of this Section 6.3 upon reasonable notice to Seller.
Seller is solely responsible for the operation and maintenance of the Facilty. PacifiCorp shall
not, by reason of its decision to inspect or not to inspect the Facility, or by any action or inaction
taken with respect to any such inspection, assume or be held responsible for any liabilty or
occurence arising from the operation and maintenance by Seller of the Facilty.
6.2 Seller may cease operation of the entire Facility or any individual unt for
Scheduled Maintenance Periods for each calendar year at such times as are provided in the
monthly operating schedule set forth as Exhibit D.
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6.3 Energy Acceptance
6.3.1 PacifiCorp shall be excused from accepting and paying for Net
Output or accepting Inadvertent Energy 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 if PacifiCorp determines that curtilment, interrption or reduction of Net
Output or Inadvertent Energy deliveries is necessary because of line constrction or
maintenance requirements, emergencies, electrical system operating conditions on its
system or as otherwise required by Prudent Electrical Practices. If, for reasons other than
an event of Force Majeure, PacifiCorp requires such a curailment, interrption or
reduction of Net Output deliveries for a period that exceeds twenty (20) days, beginnng
with the twenty-first day of such interrption, curailment or reduction, Seller will be
deemed to be delivering Net Output at a rate equivalent to the pro rata daily average of
the amounts specified for the applicable month in the Energy Delivery Schedule under
Section 4.2 unadjusted by Section 4.3. PacifiCorp wil notify Seller when the
interrption, curtailment or reduction is terminated.
6.3.2 PacifiCorp shall not be obligated to purchase, receive or pay for Net
Output that is not delivered to the Point of Delivery (a) during times and to the extent that
such energy is not delivered because the interconnection between the Facilty and
PacifiCorp's system is disconnected, suspended or interrupted, in whole or in par,
pursuant to the Facilty's generation interconnection agreement, if applicable, or
Transmission Agreement(s), (b) during times and to the extent that such energy is not
delivered because the Tranmission Entity Curls (as defined in the Tariff)
Transmission Service (as defined in the Tarff to PacifiCorp pursuant to the terms of the
Tariff, or (c) durg times and to the extent that an event of Force Majeure prevents either
Pary from delivering or receiving such energy.
6.3.3 Under no circumstaces wil the Seller deliver Net Output and/or
Inadvertent Energy from the Facilty to the Point of Delivery in an amount that exceeds
the Maximum Facility Delivery Rate, except as provided in Addendum W. Seller's
failure to limit deliveries to the Maximum Facilty Delivery Rate shall be a Material
Breach of ths Agreement.
6.4 Seller Declared Suspension of Energy Deliveries.
6.4.1 If the Seller's Facility experiences a forced outage due to equipment
failure which is not caused by an event of Force Majeure or by neglect, disrepair or lack
of adequate preventative maintenance of the Seller's Facilty, Seller may, after giving
notice as provided in Section 6.4.2 below, temporarly suspend all deliveries of Net
Energy to PacifiCorp from the Facilty or from individual generation unit(s) withn the
Facility affected by the forced outage for a period of not 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 notification as specified in Section 6.4.2 and will continue for the
time as specified (not less than 48 hours) in the written notification provided by the
15
Seller. In the month(s) in which the Declared Suspension of Energy occurred, the
Scheduled Monthly Energy Delivery will be adjusted as specified in Section 4.3.
6.4.2 If the. Seller desires to initiate a Declared Suspension of. Energy
Deliveries as provided in Section 6.4.1, the Seller will notify PacifiCorp's generation
coordination desk, bye-mail to wscc($acificorp.com, by telephone [phone]), or
by fax [phone]), of Seller's unscheduled outage. Seller shall take all reasonable
measures and exercise its best efforts to avoid unscheduled maintenance, to limit the
duration of such unscheduled maintenance, and to perform unscheduled maintenance
during Off-Peak Hours. The beginning hour of the Declared Suspension of Energy
Deliveries will be at the earliest the next full hour afer making contact with PacifiCorp.
The Seller will, within 24 hours after the telephone contact, provide PacifiCorp a written
notice in accordance with Section 21 declaring the beginning hour and duration of the
Declared Suspension of Energy Deliveries and a description of the conditions that caused
the Seller to initiate a Declared Suspension of Energy Deliveries. PacifiCorp will review
the documentation provided by the Seller to determine PacifiCorp's acceptance of the
described forced outage as qualifying for a Declared Suspension of Energy Deliveries as
specified in paragraph 6.4.1. PacifiCorp's acceptance of the Seller's forced outage as an
acceptable forced outage will be based upon the clear documentation provided by the
Seller that the forced outage is not due to an event of Force Majeure or by neglect,
disrepair or lack of adequate preventative maintenance of the Seller's Facilty. Seller
agrees to retain all performance related data for the Facilty for a minimum of three years,
and to cooperate with PacifiCorp in the event PacifiCorp decides to audit Seller's
reporting of Facilty Net Output and Adjusted Scheduled Monthly Energy Delivery.
SECTION 7: MOTIVE FORCE
Prior to the Effective Date of this Agreement, Seller provided to PacifiCorp an engineering
report for Seller's Upper Facility and Seller's Lower Facility demonstrating to PacifiCorp's
reasonable satisfaction: (1) the feasibilty that the combined Net Energy delivery of the Lower
Facilty and Upper Facility will equal or exceed 6,400,535 kWh in each full calendar year for the
full term of ths Agreement; and (2) the likelihood that the Facilty, under average design
conditions, will generate at no more than 10 aMW in any calendar month ("Motive Force Plan")
acceptable to PacifiCorp in its reasonable discretion and attached hereto as Exhibit F-l, together
with a certification from a Licensed Professional Engineer attached hereto as Exhibit F -2,
certifying to PacifiCorp that the Facility can reasonably be expected to perform as predicted in
the Motive Force Plan for the duration of this Agreement.
SECTION 8: METERING AT THE POINT OF INTERCONNECTION
8.1 Metering shall be performed at the location and in a maner consistent with this
Agreement, as specified in Exhibit B. Seller shall provide to PacifiCorp metered Facility Net
Output in hourly increments, and any other energy measurements required to administer this
Agreement. If the Transmitting Entity(s) requires Seller to telemeter data, PacifiCorp shall be
entitled to receive the same data Seller provides to the Transmitting Entity, if such data is useful
to PacifiCorp's administration of this Agreement. Seller's metered output shall be adjusted to
16
account for electrical losses, if any, between the point of metering(x) and the Point of
Interconnection(x) ("adjusted metered output"). The loss adjustment shall be 2% of the kWh
energy production recorded on the Facilty output meter until actually measured and confrmed
in letter agreement between the Pares. Subject to other provisions applicable to Net Output in
this Agreement (e.g., disallowance of Inadvertent Energy), PacifiCorp shall subtract Seller's
station service load from Seller's adjusted metered output to determine Net Output.
8.2 Seller shall pay for the installation, testing, and maintenance of any metering
required by Section 8.1, and shall provide reasonable access to such meters. PacifiCorp shall
have reasonable access to inspection, testing, repair and replacement of the metering equipment.
If any of the inspections or tests discloses a measurement error exceeding two percent (2%),
either fast or slow, proper correction, based upon the inaccuracy found, shall be made of
previous readings for the actul period during which the metering equipment rendered inaccurate
measurements. Any correction in bilings or payments resulting from a correction in the meter
records shall be made in the next monthly biling or payment rendered following the repair of the
meter, or during the shortest reasonable period.
SECTION 9: BILLINGS, COMPUTATIONS AND PAYMENTS
9.1 On or before the thirtieth (30th) day following the end of each Billng Period,
PacifiCorp shall send to Seller payment for Seller's deliveries of Net Output to PacifiCorp,
together with computations supporting such payment. PacifiCorp may offset any such payment
to reflect amounts owing from Seller to PacifiCorp pursuat to this Agreement and any other
agreement(s) between the Paries.
9.2 Any amounts owing afer the due date thereof shall bear interest at the Prime Rate
plus two percent (2%) from the date due until paid; provided, however, that the interest rate shall
at no time exceed the maximum rate allowed by applicable law.
SECTION 10: DEFAULTS AND REMEDIES
lO.l The following events shall constitute defaults under this Agreement:
10.1.1 Seller's failure to make a payment when due under this Agreement,
or maintain insurance in conformance with the requirements of Section 12 of this
Agreement, if the failure is not cured within ten (l0) days after the non-defaulting Pary
gives the defaulting Pary a notice of the default.
10.1.2 Breach by a Party of a representation or waranty set forth in this
Agreement, if such failure or breach is not cured within thirty (30) days following written
notice.
10.1.3 Seller's failure to cure any default under any commercial or
financing agreements or instrent (including the Facility's generation interconnection
agreement, if applicable) within the time allowed for a cure under such agreement or
instrment.
17
10.1.4 A Pary (a) makes an assignment for the benefit of its creditors; (b)
fies a petition or otherwise commences, authorizes or acquiesces in the commencement
of a proceeding or cause of action under any banruptcy or similar law for the protection
of creditors, or has such a petition fied against it and such petition is not withdrawn or
dismissed within sixty (60) days after such filing; (c) becomes insolvent; or (d) is unable
to pay its debts when due.
10.1.5 A Material Adverse Change has occurred with respect to Seller and
Seller fails to provide such performance assurances as are reasonably requested by
PacifiCorp, within fifteen (15) days from the date of such request.
10.1.6 Failure to maintain Delay Security in accordance with Section 2.3.1
until properly terminated in accordance with Section 2.3.4.
10.1.7 A Pary otherwse fails to perform any material obligation (including
but not limited to failure by Seller to meet any deadline set forth in Section 2.2) imposed
upon that Pary by this Agreement if the failure is not cured within thirty (30) days afer
the non-defaulting Pary gives the defaulting Par notice of the default; provided,
however, that, upon written notice from the defaulting Pary, this thirty (30) day period
shall be extended by an additional ninety (90) days if (a) the failure canot reasonably be
cured within the thirty (30) day period despite dilgent efforts, (b) the default is capable
of being cured within the additional ninety (90) day period, and (c) the defaulting Par
commences the cure within the original thirty (30) day period and is at all times thereafter
diligently and continuously proceeding to cure the failure.
10.2 In the event of any default hereunder, the non-defaulting Pary must notify the
defaulting Party in writing of the circumstaces indicating the default and outlining the
requirements to cure the default. If the default has not been cured within the prescribed time,
above, the non-defaulting Pary may terminate this Agreement at its sole discretion by delivering
written notice to the other Pary and may pursue any and all legal or equitable remedies provided
by law or pursuant to this Agreement. The rights provided in this Section 10 are cumulative such
that the exercise of one or more rights shall not constitute a waiver of any other rights.
10.3 In the event this Agreement is terminated because of Seller's default and Seller
wishes to again sell Net Output from the facility using the same motive force to PacifiCorp
following such termination, PacifiCorp in its sole discretion may require that Seller do so subject
to the terms of this Agreement, including but not limited to the purchase prices as set forth in
(Section 5), until the Expiration Date (as set fort in Section 2.1). At such time Seller and
PacifiCorp agree to execute a wrtten document ratifying the terms of this Agreement.
10.4 If this Agreement is terminated as a result of Seller's default, Seller shall pay
PacifiCorp for the energy and associated capacity that Seller was scheduled to provide for a
period of twelve (12) months ("Replacement Period") from the date of termination plus the
estimated admnistrative cost to acquire the replacement power ("Net Replacement Power
Costs"). Net Replacement Power Costs equals the sum of the Replacement Price times the
Replacement Volume for each day of the Replacement Period, plus the estimated administrative
cost to the utilty to acquire replacement power.
18
Where:
"Replacement Price" equas the positive difference, if any, of the Index Price minus the
weighted average of the On-Peak and Off-Peak Conforming Energy Prices; and
"Replacement Volume" equals the applicable Scheduled Monthly Energy Delivery
divided by the number of days in that month.
10.5 Upon an event of default or termination event resulting from default under this
Agreement, in addition to and not in limitation of any other right or remedy under this
Agreement or applicable law (including any right to set-off, counterclaim, or otherwse withold
payment), the non-defaulting Pary may at its option set-off, against any amounts owed to the
defaulting Part, any amounts owed by the defaulting Pary under any contract(s) or
agreement(s) between the Paries. The obligations of the Paries shall be deemed satisfied and
discharged to the extent of any such set-off. The non-defaulting Pary shall give the defaulting
Pary wrtten notice of any set-off, but failure to give such notice shall not affect the validity of
the set-off.
10.6 Amounts owed by Seller pursuant to ths paragraph shall be due within five (5)
business days afer any invoice from PacifiCorp for the same.
SECTION 11: INDEMNIFICATION
11.1 Indemnities.
11.1.1 Indemnity by Seller. Seller shall release, indemnify and hold
harmless PacifiCorp, its directors, officers, agents, and representatives against and from
any and all loss, fines, penalties, claims, actions or suits, including costs and attorney's
fees, both at tral and on appeal, resulting from, or arising out of or in any way connected
with (a) the energy delivered by Seller under this Agreement to and at the Point of
Delivery, (b) any facilties on Seller's side of the Point of Delivery, (c) Seller's operation
and/or maitenance of the Facilty, or (d) arising from this Agreement, including without
limitation any loss, claim, action or suit, for or on account of injury, bodily or otherwise,
to, or death of, persons, or for daage to, or destruction or economic loss of property
belonging to PacifiCorp, Seller or others, excepting only such loss, claim, action or suit
as may be caused solely by the fault or gross negligence of PacifiCorp, its directors,
officers, employees, agents or representatives.
11.1.2 Indemnity by PacifiCorp. PacifiCorp shall release, indemnfy and
hold harmless Seller, its directors, offcers, agents, Lenders and representatives against
and from any and all loss, fines, penalties, claims, actions or suits, including costs and
attorney's fees, both at trial and on appeal, resulting from, or arising out of or in any way
connected with the energy delivered by Seller under this Agreement after the Point of
Delivery, including without limitation any loss, claim, action or suit, for or on account of
injury, bodily or otherwse, to, or death of, persons, or for damage to, or destruction or
economic loss of property, excepting only such loss, claim, action or suit as may be
caused solely by the fault or gross negligence of Seller, its directors, officers, employees,
agents, Lenders or representatives.
19
11.2 No Dedication. Nothing in this Agreement shall be constred to create any duty
to, any standard of care with reference to, or any liabilty to any person not a Par to this
Agreement. No underting by one Pary to the other under any provision of this Agreement
shall constitute the dedication of that Pary's system or any portion thereof to the other Pary or
to the public, nor affect the status of PacifiCorp as an independent public utility corporation or
Seller as an independent individual or entity.
11.3 CONSEQUENTIAL DAMAGES. EXCEPT TO THE EXTENT SUCH
DAMAGES ARE INCLUDED IN THE LIQUIDATED DAMAGES, DELAY DAMAGES, OR
OTHER SPECIFIED MEASURE OF DAMAGES EXPRESSL Y PROVIDED FOR IN THIS
AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR
SPECIAL, PUNITIVE, INDIRECT, EXEMPLARY OR CONSEQUENTIAL DAMAGES,
WHETHER SUCH DAMAGES ARE ALLOWED OR PROVIDED BY CONTRACT, TORT
(ICLUDING NEGLIGENCE), STRICT LIABILITY, STATUTE OR OTHERWISE.
SECTION 12: LIABILITY AND INSURANCE
12.1 Certificates. Seller shall provide PacifiCorp insurance certificate(s) (of "ACORD
Form" or the equivalent) certifying Seller's compliance with the insurance requirements
hereunder. Commercial General Liabilty coverage written on a "claims-made" basis, if any,
shall be specifically identified on the certficate. If requested by PacifiCorp, a copy of each
insurance policy, certified as a true copy by an authorized representative of the issuing insurance
company, shall be furshed to PacifiCotp.
12.2 Required Policies and Coverages. Without limiting any liabilties or any other
obligations of Seller under this Agreement, from the commencement of interconnection with
PacifiCorp's electric transmission system until the Termination Date of this Agreement, at its
own expense, Seller shall secure and continuously cary, with an insurance company or
companies rated not lower than "A- or better" by the A.M. Best Company, the insurance
coverage specified below:
12.2.1 Worker's Compensation insurance which complies with the laws of
the state within which the Facilty is located;
12.2.2 Commercial General Liabilty insurance with bodily injury and
property damage combined single limits of at least $1,000,000 per occurence. Seller
shall maintan the policy in accordance with terms available in the insurance market for
similar electric generating facilties. Such insurance shall include, but not necessarly be
limited to, specific coverage for contractual liabilty encompassing the indemnification
provisions in this Agreement, broad form propert damage liabilty, personal injur
liabilty, explosion and collapse hazd coverage, products/completed operations liabilty,
and, where applicable, watercraf protection and indemnity liability;
12.2.3 All Risk Insurance. The policy shall provide coverage in an amount
equal to not less than 80% of the curent replacement in kind of the Facilty for "all risks"
of physical loss or damage except as hereinafter provided, including coverage for boiler
and machinery, transit and off-site storage accident exposure, but excluding the
equipment owned or leased by Operator and its subcontractors and their personal
20
property. The policy may contain separate sub-limits and deductibles subject to
insurance company underwriting guidelines. Seller shal maintain the policy in
accordance with terms available in the insurance market for similar electric generating
facilties. The policy shall include coverage for business interrption in an amount
covering a period of indemnity equal to twelve (12) months. Additional coverages to be
included are:
(a) Catastrophic Perils Insurance not less than 80% of the curent
replacement cost of plant, building, and/or equipment.
12.3 Insurance Strcture. Seller may satisfy the amounts of insurance required above by
purchasing primary coverage in the amounts specified or by buying a separate excess Umbrella
Liabilty policy together with lower limit primar underlying coverage. The structure of the
coverage is at Seller's option, as long as the total amount of insurance meets the above
requirements.
12.4 Occurrence- Based Coverage. The coverage required above, and any umbrella or
excess coverage, shall be "occurence" form policies. In the event that any policy is wrtten on a
"claims-made" basis and such policy is not renewed or the retroactive date of such policy is to be
changed, the first insured Pary shall obtain or cause to be obtained for each such policy or
policies the broadest basic and supplementa extended reporting period coverage or "tail"
reasonably available in the commercial insurance market for each such policy or policies and
shall provide the other Part with proof that such basic and supplemental extended reporting
period coverage or "tail" has been obtaned.
12.5 Endorsement Items. Seller shall immediately cause its insurers to amend its
Commercial General Liabilty and Umbrella or Excess Liabilty policies with all of the following
endorsement items, and to amend its Worker's Compensation policy with the endorsement items
set forth in Paragraphs 12.5.3 and 12.5.4 below:
12.5.1 PacifiCorp and its Affliates, their respective directors, offcers,
employees, and agents as an additional insured under this policy and to the maximum
extent allowed by law, shall be provided with coverage at least as broad as those required
of the Seller by this Agreement;
21
12.5.2 This insurance is primar with respect to the interest of PacifiCorp
and its Affliates and their respective directors, officers, employees, and agents;
12.5.3 Insurer hereby waives all rights of subrogation against PacifiCorp,
its Affiliates, officers, directors, employees and agents;
12.5.4 Notwithstanding any provision of the policy, this policy may not be
canceled, non-renewed or materially changed by the insurer without giving ten (10) days'
prior written notice to PacifiCorp; and
12.5.5 Cross liabilty coverage so that the insurance applies separately to
each insured against whom claim is made or suit is brought, even in instaces where one
insured claims against or sues another insured.
12.6 Periodic Review. PacifiCorp may review ths schedule of required insuance as
often as once every two (2) years. PacifiCorp may, in its discretion and if allowed by the
Commission, require the Seller to make changes to the policies and coverages described in this
Exhibit to the extent reasonably necessar to cause such policies and coverages to conform to the
insurance policies and coverages typically obtained or required for power generation facilties
comparable to the Facility at the time PacifiCorp's review taes place. In addition, Seller shall
have the right, subject to PacifiCorp's consent, to make changes in the coverages and limits of
the Builder's All-Risk Insurance and the All-Risk Insurance required under this Section, to the
extent the coverages and limits specified herein are not reasonably available at commercially
reasonable rates.
SECTION 13: FORCE MAJEURE
13.1 As used in ths Agreement, "Force Majeure" or "an event of Force Majeure"
mean any cause beyond the reasonable control of the Seller or of PacifiCorp which, despite the
exercise of due diligence, such Pary is unable to prevent or overcome. By way of example,
Force Majeure may include but is not limited to acts of God, flood, storms, wars, hostilties, civil
strife, strikes, and other labor distubances, earhquakes, fires, lightnig, epidemics, sabotage,
restraint by court order or other delay or failure in the performance as a result of any action or
inaction on behalf of a public authority which is in each case (i) beyond the reasonable control of
such Pary, (ii) by the exercise of reasonable foresight such Party could not reasonably have been
expected to avoid and (iii) by the exercise of due dilgence, such Par shall be unable to prevent
or overcome. Force Majeure, however, specifically excludes the cost or availabilty of fuel or
motive force to operate the Facilty or changes in market conditions that affect the price of
energy or transmission. If either Pary is rendered wholly or in par unable to perform its
obligation under this Agreement because of an event of Force Majeure, both Paries shall be
excused from whatever performance is affected by the event of Force Majeure, provided that:
13.1.1 the non-performing Party, shall, within two (2) weeks afer the
occurence of the Force Majeure, give the other Pary wrtten notice describing the
pariculars of the occurrence, including the sta date of the Force Majeure, the cause of
22
Force Majeure, whether the Facility remains parially operational and the expected end
date of the Force Majeure;
13.1.2 the suspension of performance shall be of no greater scope and of no
longer duration than is required by the Force Majeure;
13.1.3
to perform; and
the non-performing Par uses its best efforts to remedy its inabilty
13.1.4 the non-performing Pary shall provide prompt written notice to the
other Pary at the end of the Force Majeure event detailing the end date, cause there of,
damage caused there by and any repairs that were required as a result of the Force
Majeure event, ard the end date of the Force Majeure.
13.2 No obligations of either Par which arose before the Force Majeure causing the
suspension of performance shall be excused as a result of the Force Majeure.
13.3 Neither Pary shall be required to settle any strike, walkout, lockout or other labor
dispute on terms which, in the sole judgment of the Part involved in the dispute, are contrary to
the Pary's best interests.
SECTION 14: SEVERAL OBLIGATIONS
Nothing contained in this Agreement shall ever be constred to create an association, trust,
parership or joint ventue or to impose a trst or parership duty, obligation or liability
between the Paries. If Seller includes two or more parties, each such party shall be jointly and
severally liable for Seller's obligations under this Agreement.
SECTION 15: CHOICE OF LAW
This Agreement shall be interpreted and enforced in accordance with the laws of the state of
Idaho, excluding any choice of law rues which may direct the application of the laws of another
jurisdiction.
SECTION 16: PARTIAL INVALIDITY
It is not the intention of the Parties to violate any laws governing the subject matter of this
Agreement. If any of the terms of the Agreement are finally held or determined to be invalid,
ilegal or void as being contrar to any applicable law or public policy, all other terms of the
Agreement shall remain in effect. If any terms are finally held or determined to be invalid,
ilegal or void, the Paries shall enter into negotiations concerning the terms affected by such
decision for the purose of achieving conformity with requirements of any applicable law and
the intent of the Paries to this Agreement.
23
SECTION 17: WAIVER
Any waiver at any time by either Pary of its rights with respect to a default under this
Agreement or with respect to any other matters arising in connection with this Agreement must
be in writing, and such waiver shall not be deemed a waiver with respect to any subsequent
default or other matter.
SECTION 18: GOVERNMENTAL JURISDICTION AND AUTHORIZATIONS
This Agreement is subject to the jursdiction of those governental agencies having control over
either Party or this Agreement. PacifiCorp's compliance with the terms of this Agreement is
conditioned on Seller's submission to PacifiCorp prior to the Commercial Operation Date and
maintaining thereafter copies of all local, state and federal licenses, permits and other approvals
as then may be required by law for the construction, operation and maintenance of the Facilty.
SECTION 19: SUCCESSORS AND ASSIGNS
This Agreement and all of the terms and provisions hereof shall be binding upon and inure to the
benefit of the respective successors and assign of the Paries hereto, except that no assignment
hereof by either Pary shall become effective without the written consent of both Paries being
first obtained. Such consent shall not be uneasonably withheld. Notwithstanding the foregoing,
any entity with which PacifiCorp may consolidate, or into which it may merge, or to which it
may conveyor transfer substantially all of its electric utilty assets, shall automatically, without
fuher act, and without need of consent or approval by the Seller, succeed to all ofPacifiCorp's
rights, obligations, and interests under this Agreement. This aricle shall not prevent a financing
entity with recorded or secured rights from exercising all rights and remedies available to it
under law or contract. PacifiCorp shall have the right to be notified by the financing entity that it
is exercising such rights or remedies.
SECTION 20: ENTIRE AGREEMENT
20.1 This Agreement supersedes all prior agreements, proposals, representations,
negotiations, discussions or letters, whether oral or in writing, regarding PacifiCorp's purchase of
Net Output from the Facility. No modification of ths Agreement shall be effective unless it is in
wrting and signed by both Paries.
20.2 By executing this Agreement, each Pary releases the other from any claims,
known or unown, that may have arsen prior to the Effective Date with respect to the Facilty
and any predecessor facility proposed to have been constrcted on the site of the Facilty.
SECTION 21: NOTICES
21.1 All notices except as otherwise provided in this Agreement shall be in wrting,
shall be directed as follows and shall be considered delivered if delivered in person or when
deposited in the U.S. Mail, postage prepaid by certified or registered mail and retur receipt
requested
24
Notices PacifiCorp Seller
All Notices PacifiCorp Lower Valley Energy, Inc.
825 NE Multnomah Street Portland,PO Box 188
OR 97232 Afton, Wyoming 83110
Attn: Contract Administration,Attention Jim Webb,CEOSuite 600
Phone: (503) 813 - 5218 Phone [phone]
Facsimile: (503) 813 - 6291 Facsimile: [phone]Duns: 00-790-9013
Federal Tax ID Number: 93-0246090
All Invoices:Att: Back Offce, Suite 700 Attention GayLynn Turer
Phone: (503) 813 - 5578 Phone [phone]Facsimile: (503) 813 - 5580
Facsimile: [phone]
Scheduling:Att: Resource Planing, Suite 600 Attention Rick Knori
Phone: (503) 813 - 6090 Phone: [phone]Facsimile: (503) 813 - 6265
Facsimile: [phone]
Payments:Att: Back Office, Suite 700 Attention GayLynn Turner
Phone: (503) 813 - 5578 Phone [phone]Facsimile: (503) 813 - 5580
Facsimile: [phone]
Wire Transfer:Bank One N.A.To be provided in separate letter
To be provided in separate letter from from Lower Valley Energy to Buyer
PacifiCorp to Seller
Credit and Att: Credit Manager, Suite 1900 Attention GayLynn Turer
Collections:Phone: (503) 813 - 5684 Phone [phone]Facsimile: [phone]
Facsimile: [phone]
With Additional Attn: PacifiCorp General Counsel James Webb, CEO
Notices of an Phone: [phone] Lower Valley Energy, Inc.Event of Default Facsimile: [phone]
or Potential Phone [phone]
Event of Default Facsimile: [phone]
to:
The Paries may change the person to whom such notices are addressed, or their addresses, by
providing written notices thereof in accordance with this Subsection.
25
IN WITNESS WHEREOF, the Paries hereto have causd this Agrment to be executed
in their respective names as of the date first above wrtten.
By:
Nam . Grswold
Title: Director Short Tenn Origination
and QF Contrcts
26
EXHIBIT A
DESCRIPTION OF SELLER'S FACILITY
(Seller to Complete)
Seller's Facilty consists of two QFs, designated Facilty(lower) and FaciltY(upper) in this
Agreement. Together, the Facility is described as:
Facilty Capacity Rating: 1,475 kW.
Identify the Maximum Facilty Delivery Rate (the sum of the Maximum Facility Delivery
Rate(lower) and Maximum Facility Delivery Rate(upper):
Maximum Facilty Delivery Rate: 1,537 kW.
A-1
EXHIBIT A - Lower
DESCRIPTION OF SELLER'S FACILITY(LOWER)
(Seller to Complete)
Seller's Facilty consists of one generator manufactued by Emerson Motor Company. More
specifically, each generator at the Facility is described as:
Type (synchronous or inductive): S 1 Induction Generator
Nameplate Part No.: 370780-000
Number of Phases: 3
Rated Output (kW): 597 Rated Output (kVA): 746
Rated Voltage (line to line): 480
Rated Current (A): Stator: 935 A; Rotor: Induction 935 A
Maximum kW Output: 597 kW Maximum kV A Output: 746 kVA
Minimum kW Output: 0 kW
Manufacturer's Guaranteed Cut-in Wind Speed (if applicable):N/A
Facilty Capacity Rating: 535 kW at Hz 60 A 935
Identify the maximum output of the generator(s) and describe any differences between that
output and the Nameplate Capacity Rating:
Station service requirements, and other loads served by the Facilty, if any, are described
as follows: Station service loads are metered and connected on a separate service and meter from
the 12.47 kv distribution system through a 120/240 single phase service. Station Service loads
are estimated to be 12,000 KWH per year
Location of the Facilty: The Facilty is located in Lincoln County, W Wyoming. The location
is more paricularly described as follows:
The project is located on Swift Creek, in Lincoln County, Wyoming, parially within the
Bridger-Teton National Forest at approximately 42°43' 42.3531" Nand 110°55' 00.70858" W.
(legal description of parcel)
Power factor requirements:
Rated Power Factor (PF) or reactive load (kVAR): PF = .81
A-(1ower)-l
EXHIBIT A - Upper
DESCRIPTION OF SELLER'S FACILITYcuPPER)
(Seller to Complete)
Seller's FaciltY(upper) consists of one generator manufactued by Marell
Motori . More specifically, each generator at the FaciltY(upper) is described
as:
Type (synchronous or inductive): S 1 Induction Generator
Model: C4G500 LC 10
Number of Phases: 3
Rated Output (kW): 940 Rated Output (kV A):
Rated Voltage (line to line):
Rated Current (A): Stator: 1131 A; Rotor: Induction 1131 A
Maximum kW Output: 940 kW Maximum kVA Output: 986 kVA
Minimum kW Output: 0 kW
Manufacturer's Guaranteed Cut-in Wind Speed (if applicable):
Facilty Capacity Rating(upper): 940 kW at Hz 60 A
1360
Identify the Maximum Facilty Delivery Rate(upper) and describe any differences between that
output and the Facilty Capacity Rating(upper):
Station service requirements, and other loads served by the Facility(upper), if any, are
described as follows: Station service loads are metered and connected on a separate service and
meter from the 12.47 kv distribution system though a 1201240 single phase service.
Location of the Facilty(upper): The Facility(upper) is located in Lincoln County, W Wyoming.
The location is more particularly described as follows:
The project is located on Swift Creek, in Lincoln County, Wyoming, parially withn the
Bridger-Teton National Forest at approximately 42°43' Nand 110°54' W.
Power factor requirements:
Rated Power Factor (PF) or reactive load (kV AR): PF = .83
A-(upper)-l
EXHIBITB
SELLER'S INTERCONNECTION FACILITIES
(Seller to provide its own diagram and description)
POINT OF DELIVERY I SELLER'S INTERCONNECTION FACILITIES
Instructions to Seller:
1. Describe the point(s) of metering, including the tye ofmeter(s), and the owner of the
meter(s) at FaciltY(lower) and FaciltY(upper).
The Lower Swift Creek Facilty and the Upper Swift Creek Facilty are metered
separately. The point of metering at each Facilty is in the seconda
comparment of the 277/480 step up transformers. The Lower Swift Creek
Facility is a 750 kva transformer, The Upper Swift Creek Facilty is a 1500 kva
transformer. The metering is done by 500-5 CT's and a Gemst JEMIO meter.
The meters are owned by Bonnevile Power Administration.
2. Provide single line diagrams of FaciltY(lower) and FaciltY(upper) including station use
meter, Facilty output meter(s), Interconnection Facilties, Points ofInterconnection.
One-line diagrams of Facilty (lower) and FaciltY(upper) are attched. For both, the
Point of Interconnection is the 12.47 kV side of the step-up transformer.
3. Specify the Point of Delivery, and any transmission facilties on Seller's side of the Point
of Delivery used to deliver Net Output.
The power wil be delivered from the Lower Valley Energy distribution system to
BP A. BP A will deliver the power to PacifiCorp at the Goshen Substation. See
attached one-line diagram.
B-1
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EXHIBITC
REQUIRED FACILITY DOCUMENTS
REQUIRED OF ALL FACILITIES:
QF Certifications: Facilty(lower): QF 10-157-000 and Facilty(upperf QF 08-641-000
Generation Interconnection Agreement Not applicable
Fuel Supply Agreement, if applicable N/ A
BP A point-to-point transmission service agreement
The following Documents are required to complete this project:
Easements:
Permits:
C-l
EXHIBITD
ENERGY DELIVERY SCHEDULE
Upper Swift Creek Hydro
Lower Swift Creek Hydro
("Faciltyuppcr")("FaciltYlower")0.940MW Nameolate Caoacitv .535 MW Nameolate CaDacitv FaciltvTotal
SMED:
Scheduled
Monthly Avg.Monthly Monthly Avg.Monthly Monthly Avg.
Energy Delivery Capacity Energy Deliver Capacity Energy Deliver
Delivery Rate Factor Delivery y Rate Factor Delivery yRate
(kWh)(MW)(%)(kWh)-(MW)(%)(kWh)(MW)
January .............!..?1?~4.9........_..0.26 28%......._......_i...Q.~.?~.?.4........_....14 26%..............?~.??...i.,l~.............,..0.40.._................................._..................-..-..............................."........................................
=::::~:~~~:::::..::~:
......_--....-..............February ..__..l.~_??...4.9...............0.22 23%...........S~è7.~.......12 _............_?~.QI.?..i._~................0.34........................_.............................................................................-............................................................................March ......_._...!_~~.?§s.Q......_.0.22 23%.............~~.2..~.?.......__.12 _.............?:~.9?~..L7_............0.34............................._........................................._......,................_................_............-........"................_._.....ø..................._..._.._.._............April ......_._.~s~?~~~..............0.39 42%..............l.~..!.I.~.§.?......_....17 32%.............~Q.~I.?gl..............0.56.._.................._.....ø......_.._..._.ü..._...._.._....._...................._.................ø........................ø........._..ø..........~........,.........._.__......._...._.....
May ....._....!?2?~.??...._0.64 68%.~n.I.~sL........_...37 69%_...........?~.~!~.7s..............1.01,........_...................."..........................ø_.._....._...._..................................._........................_......_.._................_......_..........._-...,......June ......_...??g?s~?.........._.0.79 84%_......~§.?I_~..~.S........50 93%....._..J..~.~i.s..ll...._......1.0.......................-..._-............._............._....._..._....._........._.............................................._...._....._........._........-............._........................July .............?..?~l~?.S..._...._.0.77 82%........._...~.~_7.I.9.ss_..._...47 88%............_2.?_~ll,.!.~...............1.24................_.................._-_....,..........__..._............-......................-..................................._......_..._......~......_......_............._-"..,...............August ............??.9?.?..U_..._.0.74 79%.._........?~.?I..!?..§..._.........32 60%_..._...J_S.??§~_?.._.._.....1.06...........,..........................................._................._..,,_...........,..............."............................................_...._............._....._....._.................................September ........_..~~~?4.?.2__...._.0.53 57%...._.........?..?..ig~g.................22 41%.........._S~?l4.~~......._..0.75..,.................._.....__.......-'..-._........ø..........................,................................................................_..........._........_....._.................._........-.........-October ....~.?~1?~~_....0.50 54%...._...._.L421.?.?~...............20 37%.......??:!I.Q.Q~_._...0.70....._......~................................._........._._..................................,_...._...._.........._....._............__............_.............................,_.._....-.-..
November _..~.9.9?Q?.~........._0.42 44%._......_.i~???...~s...........17 32%425,843 0.59......................_................_,..................._.....................__.........-........................_..........._...."......._...................."~.........................._.__...
December 223,200 0.30 32%113,611 .15 28%336,811 0.45
TOTAL:4,243.534 0.52 55%2,157,000 0.26 49%6,400,535 0.76
Scheduled Maintenance - Seller wil provide a suggested maintenance schedule annually.
D-l
EXHIBITE
START-UP TESTING
Required factory testing includes such checks and tests necessar to determine that the
equipment systems and subsystems have been properly manufactured and installed, function
properly, and are in a condition to permit safe and effcient star-up of the Facility, which may
include but are not limited to:
1. Test of mechanical and electrical equipment;
2. Calibration of all monitoring instruments;
3. Operating tests of all valves, operators, motor starters and motor;
4. Alars, signals, and fail-safe or system shutdown control tests;
5. Point-to-point continuity tests;
6. Bench tests of protective devices; and
7. Tests required by manufacturer of equipment
Required star-up tests are those checks and tests necessar to determine that all features
and equipment, systems, and subsystems have been properly installed and adjusted, fuction
properly, and are capable of operating simultaneously in such condition that the Facilty is
capable of continuous delivery into PacifiCorp's electrical system, which may include but are
not limited to:
1. Turbine/generator mechanical runs and functionality;
2. System operation tests;
3. Brake tests;
4. Energization oftransformers;
5. Synchronizing tests (manual and auto);
6. Excitation and voltage regulation operation tests;
7. Auto stop/sta sequence;
8. Completion of any state and federal environmental testing requirements.
9. Tests required by manufactuer of equipment;
For wind projects only, the following Wind Turbine Generator Installation Check Lists are
required documents to be signed offby Manufactuer or Subcontract Category Commissioning
Personnel as par of the Commissioning and startup testing:
Turbine Installation
Foundation Inspection
Controller Assembly
Power Cables
Cable Installation Check Lists including: Controller
Top Deck / Yaw Deck
Tower Top Section / Saddle
Mid Section Cables or buss bars
Base Section
Tower Base Section
Tower Lights and Outlets
Tower Mid Section
Tower Top Section
Nacelle
Rotor
E- 1
EXHIBITF-l
MOTIVE FORCE PLAN
F1- 1
Ex h',b',+F-1.
nightte hoW', for the period May 1 though September 30; and
4 cfs averge
,(24, hours)mimum flow'
with amaxl.
flucttion of 1
cfs (never to fal
below 4 cfs)
from October 1
through April
30, durng al
hour."
..
Upper Swift Creek
Power Development
The chaeristics of
the varation in flows as
ilustrated in figues 3-1 to 3-
6 were reviewed in order to
detere the appropriate
power development at the Figue 3..5 Upper Swi Cree tubie sizi cha for a 36" penk
Upper Swift Crel(
5.200,000.' ¡ I . f i I i i 1 f i i ¡ ; i I j i . i 1,2
5,00,00: i l' I f í I ; i' , ; ¡,: i -; ¡ i ! !', t ii, 1,2
4.a,OOO 1- -f r j j' f 1 ¡' -i j r 'lLl i . i )' j ; t ¡.. f r ,! '1,150
4,80.000" '. i' 'i'" r i - ¡ 1 ' ,L , 'i 'i'! 1,100\ ~ i 1. . 1 ii'4,400.000 -, T' ¡ i :". l' -r' j' i i,?, " 10 ' '~': 7 j j j - 1.06
4.20.000, +' i i ! 1 ,i 'j - i 1~1 ttl ,'i i ! ¡ - í ~ : - 1,004.00,00- - 1 Í" I i' t " l ~ - i 1 i I ì r 1 1 r t 950
3,80.000 r',' i, t f JÆ' ,¡ r itt ¡ ; I' ¡, , 9003,00.00 t- ~ f ;!!. 1 . I ! f . ¡. Lj.. --- ~ "850
'C3,40.000. I i It, I '. i. ¡ ¡ i' t.i n'l' I' ¡: 800iE3,00,OO I i I :),'1 ï. I- f f i: '1' I r 1. j ¡ " i i ¡. 750 ~
~.OO8O'.oOOO .I'!- 'iI! -I Ii:' (! t1 j i .1 J i ! '!'!' ¡ I." 'i": 16500 g
t:L, ~ l' i! : l' 1 i. ! ¡ l 1:.1 I :02,60,000' t. ¡ I . l ~4"" .- I' ¡ - j i ! ' ! Î, í ~ 1 60 €
1!2.40.000':1,,1 1 i; :... ¡ ~ 1.1 J' ¡ ! i r 'í' ~ i" !55 !~2.200.000' t Ii! f I f ¡ I ., i '1.1: j . i r I 500 ei
Æ2,ooO.OO i. i , 'i 1/ I L . i 1 ¡.i ',¡ I !! 451,eoO.000.l.i I ' : 1/1. I j' i ',J 1 'f! ¡ i L ! i 4001.60.000' ¡ i ,¡, ¡. !. I i ¡, iii - : f. J . 361,4.000 I f 1, ¡ ! ¡ ¡ f ii ! I. I ¡ i "t 301,200.000 I -r 'I. I' /' í i ! ! ;,,' i 25
1,000,0,00 ,. ' . , ¡ 1-..1..,: i. 1.. i, I i' ¡ i ( 2080 . It. j I i J. i. . l'0,00 . . r . ¡ ':' r ~ i. : ì; ;- ì i.:" ~. ~ j ¡,. r, ~ i 150600,000 . : I, .,' ¡ i" - - i . ;,. t..: ¡ 1 r 1 !. I i ri i; 100400,000 !¡f'I:I;!!;¡"ii ,;: 50
200.000 :. j; ¡ ¡ ì ' i. ! i :: J ; i ' I ¡ .; 0¡ LT-++++-l~-l-~~-l-4 : ~ r ; i i : ~ i l i ~ î : ¡-ij~+~.! --
o 5 10 15 20 25 al 35 40 45 50 55 60 86 70 75 80 85 90 95 100105110115120
Flow (cf)
- '- Generation ...... Capacl
Fige 3-6 Upper Swift Crek tubine sizig cha for a 42" penstock
6
site. It was assuned that
the past records for the
seleced period provided
the best measUl of futue
flows. It is 'anticipated
tht a horionta Fracis
tye tubine wil be used
for the project. A Francis
tubine ha a ruer with
:6xed vanes, which the
water enter the tuine in
, a radial direction, with
respect to the shaft and
discharges in an axal
direction. Major
components consist of the
rner, a water .supply
case to convey the water
I
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to the ruer, wicket gates to control the quatity of wate and distrbute it equaly
to the ruer and a draft tube to convey the water away from the tubine. Utiizing the
est:ted effciencies, head. losses, tuine configuations, and '5% genera losses;
the estited average anual production for ths site was between 3.9 and 4.5 millon
kiowatts/year pendig on the size of the penstock.
3.2 Culinary Project
HYdrology
Flows
Flow da used was
provided in Sunse Engieer's
update to Feasibilty Stu dated
August 7, 2001, Exhbit A. Flow
data consists of monthy anua
averages. The estited flow
durtion cure, figue 3-7, was
extrapolated from the monthy
anua averges which appear as
blue in figue 3-7.
Power Development
Dat from figw '3-7 was
usedto prlimy size tubines
and estie anua average
generation for tls site. Utiizng
the estited efficiencies, head
iosses~ tubine conñgitïons, and
5% gener losses; the estimated
averge anua production for thssite Wäs i ,27 millon kilowatt
hour per yea.
¡.
221~
Culinary Water Supply
. Eslim~ Flow Duratin Curv
¡
I
i
i
I· "~:. · . ..+.. i! , t-.. Ii i r-..t.. lI. i I ¡: ..' r , . " ." ¡: ' ! i -:,:J+~~
05101520253031404la05500657075808590Ðã100. P_li
. ,
,20 t ".
1S - '\', )" ~......~\,~~\" f
i ';-..\.:..i I
'.- t
¡14
-12
110 ..!
8
6
Figw 3~ 7 The ested flow duition cure for Aftn .
Cu Wate Stily
Culinary Water Supply
~::: I; i 1. . i _ '., :.: ' i j 35l i I _...-t-J~.........':.. ¡ t .. ¡... 3251,2.000 ~. - .1 . í f/ !. ¡ ..,-,,¡ ,: . 300. l . ..r.. !. ¡--... í i1.100,000 - . )"'! j ".1""", .. 275. .1. ! i : "'1261.00.000 - ;J' 1 , . ¡
¡ 900,00: . /' ; "', .j-...¡._.. ' : . l 22 ~ .
g 80.00 . i' . ./ . . .,,¡,. . "~.. . I 20 g,~i: 700,000' ./;' ,.,¡.. ..,\, r 175 l
I.: "" \ ,1150 20llCD 60,000 I' ¡?" wj 500,00 f / " /125 0~ . / \400.00 . ,/ .\ 100300.000 )" . \1 7520.00 1 so
1oo.00~ ¡ .'_ . . -"__~ i :5
o 1 2 3 4 5 6 7 a 9 10 11 12 13 14 15 16 17 16 19 20
Flo (Cf).
. - Genn .- CapO-
Figue 3-8 Culinar Water Supply tubine sizing cha
7
. Marell Moton S.p.
. PART OF THE 'k FKI GROUP OF COMPANIES
DATI TECN/c/. TECHNICAL DATA
Vl Salblora 1361 ArgnVk:
Italy
Cliente FK LOGISTEX Nosro ririment I 810565-5CustomerAUTOMA nON INC.Our Refrence
GENERATOR TlPO - GEERTOR TYE C4G50LC10
COO ice GENERTORE - GEERÀTuR'CODE -
PONZA NOMlriAL- RATED POWER le 940
SERVizO - DUT 81
ENloNE. RATED VOLTAGE V 48 A
FREQUENZ. RATED FREQUECY HZ 60
COREN:t NoMINAE. RATED CURRENT A 168
o'OCITA' NOMINAlE - RATED SPEED r.p 72
ORM-SHAPE 1M V10
¡;SECUZIOE . EXEÇi.ION DP
, 1eiW di PROTEE. PRCTIO DEGRE.IP 23
tripe) di RAEDDAENTO -CONG METHOD ie 01
!MOMENO D'INERZ iJ;=plr/4 - MOM OF INER IJw0f4J ,kg 130
irMPEllRA.AMBIENE -AMIENT TEPERATURE 'C 40
IA TE2 DllNSTAllAlOE - SITE AL itUDe m ...200
REGISTRO - ClAIFICTION -
ClAE dllSOLAENTO -INSULATION CLAS F
SOVRTEPERATURA- TEPERATURE RISE B'. ,
NORME APUCABILI- APPLICABLE STANDARDS IEC'IEC34..1-2
CACO - LO
4/4 ,3/4 .21
REDIMENTO - EfFICIENCY fi)%96.95.7 94.5iFAlT 01 POTEN - POWl: FACTOR(c)0,8 0.76 '0.69NOMiNA - FULi LO Nm 12414
~OPPIA - TORQUE SPUNTO -lOCD ROOR p.u.0.8
MAIMA - PUl-o p.u.2,5
CORENTE di C.C. -LOCKED ROTO CURRENT p.u.5.6
POTENZA REATTIVAA VUOTO- REAIVE POER AT NO LOAD kVAR 37
RIFASAENTO A COS'" 1- POWER FACTOR CORECTIO kVAR 66
PROTIONI TEICHE AWOlGIMENI-WINDINGS 3+3PT100
THERMAl PROTEcTiON CUSCINEl - BEAING 1+1 PT100
SCAiIGUE ANCODENSA - SPACE HEATERS V/W 230/600
DATI MECCANICI- MECHANICAL DATA
trlPO CUSCINETI- BEARING TY lA-o-BA B!INS
l.O. -N-ANULA coAcT SA1l
TIPO-TYE GREUBRlFICIONE - LUBRICATION
INTRV. -INTERVAl h/g TBA
CARICHI ASIAU - AXL THRUST kN +37
CAICHI RADIA . RAIA THRUST kil 6
DIREZONE ci ROTAZlòNE -OIRECTION of ROTATION TBA
RUMROSITA' AVUOTO. NO lOA NO de(A)85(")
PESO - WEIGHT kg 5900
INTENSITA'di VlBRAZIONE . VIBRATION LEVE IEC34.:I4 N
DISEGNO DI INGOBRO- MAIN DRAWING o_81056 (pmi)
!sHEMACOLL PRINCIPALI. MAIN COINECTION DIA TB
SCHEMA COlL AUSILIAI- AUXlLIACONNECTION DIAGR lBA
rvRNICIATURA - PAlNTING RA 5010
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EXHIBITF-2
ENGINEER'S CERTIFICATION
(1) THAT THE FACILITY AVERAGE NET ENERGY ESTIMATE is KWH
PER YEAR IN EACH FULL CALENDAR YEAR OF THIS AGREEMENT;
(Engineer's certification)
(2) THAT THE FACILITY, UNDER AVERAGE DESIGN CONDITIONS, LIKELY WILL
GENERATE NO MORE THAN 10 aMW IN ANY CALENDAR MONTH.
(Engineer's certification)
F2- 1
EXHIBITF-2
ENGINEER'S CERTIFICATION
(1) THAT THE FACILITY AVERAGE NET ENERGY ESTIMTE is 4,530,237
KWH PER YEAR IN EACH FULL CALENDAR YEAR OF THIS AGREEMENT;
Wyoming Civif 9585 (Engieer's cefication)
(2) THAT THE FACILITY, UNDER AVERAGE DESIGN CONDITIONS, LIKLY WIL
GENERATE NO MORE THA 10 aM IN AN CALENDAR MONTH.
F2-1
( '.~" . 01..4 ...-.((Q.. .
~I'"'"
I
ì.
¡
EXHITF-2
'tiL.ENGINER'S CERTIFICATION ~f.,¡;~r hw~r
(1) THT TH FACIL AVERAGE NET ENERGY ESTIMATE IS 2,157,000 KWH
PER YEAR IN EACH FULL CALAR YEAR OF THS AGREEMENT;
i'
I (Engieer's ceification)
(2) THT THE FACILIT, UNDER AVERAGE DESIGN CONDmONS, LIKLY
WILGENERATE NO MORE THAN 10 aM IN ANY CALNDAR MONTH.
, I
; i
(Engiee's ceficaton)
. . .
d:::'.'d:"..,:,",,~, ..'..Ç.;,;¡. Hh,Q,.,. (. .. 1.S¡eig. fR iI ..II-II.:,. ,2M; ii."',. ¡ ¡¡¡.J . e ..W.W.......,i,e;',"\,",,\,-.-,.--..-.'. ....,.:.. ,........'.....':-:............",...,
EXHIBITG
SAMPLE ENERGY PURCHASE PRICE CALCULATIONS
The following are samples of calculations of energy purchase prices using the formula and tables
in Section 5.1.
The calculation for the purchase price durng an On-Peak Hour in May of 2009 is $76.73/MWh
(the 2009 anual rate for Conforming Energy) multiplied by 92% (0.92) (the May On-Peak Hour
multiplier), which equals $70.59/MWh.
Table 3: Sample Calculations for Conforming Energy in 2009 (Purchase Price = anual rate *
monthly On- PeakOff-Peak multiplier).
Calculated Calculated
Conforming Purchase Price Purchase Price
Energy for 2009 On-for 2009 Off-
Annual Peak Peak
Rate for On-Peak Conforming Off-Peak Conforming
2009 Hour Energy Hour Energy
Month (perMWh)Multiplier (per MWh) Multiplier (perMWh)
January $76.73 103%$79.03 94%$72.13
Februar $76.73 105%$80.57 97%$74.43
March $76.73 95%$72.89 80%$61.38
April $76.73 95%$72.89 76%$58.31
May $76.73 92%$70.59 63%$48.34
June $76.73 94%$72.13 65%$49.87
July $76.73 121%$92.84 92%$70.59
August $76.73 121%$92.84 106%$81.33
September $76.73 109%$83.64 99%$75.96
October $76.73 115%$88.24 105%$80.57
November $76.73 110%$84.40 96%$73.66
December $76.73 129%$98.98 120%$92.08
G- 1
EXHITH
Seller Authoriztion to Releae Generation Data to PacifCorp
/Interconnection Customer Letterhead1
Transmission Servces
Attn: Diretor. Transmission Serices
825 NE Multnomah, Suite 1600
Portland, OR 97232
RE: Lower Valley Energ, Ine.lnterconnection Request for both the Upper
and Lower Hydro Projects
Dear Sir:
Lower Valley Energy, Inc. hereby voluntary authorize PacifiCorp's Trasmission
business unt to shar Lower Valley Energy, Inc.'s Upper and Lower generator
interconnection information and generator meter data with Mareting Affliate employees
of Paci fi Corp Energy, including, but not limited to those in the Commercial and Traing
group. Lower Valley Energy, Inc. acknowledges that PacifiCorp did not provide it any
preferences, either operational or rate-related, in exchage for this volunta consent.
~-~~dl~.tCOTit e I
Z/2- /z.i()~ rDate
ADDENDUMW
GENERATION SCHEDULING ADDENDUM
WHEREAS, Seller's Facilty will not interconnect directly to PacifiCorp's System;
WHEREAS, Seller and PacifiCorp have not executed, and will not execute, a generation
interconnection agreement in conjunction with the Power Purchase Agreement;
WHEREAS, Seller has elected to exercise its right under PURPA to deliver Net Output
from it's QF Facility to PacifiCorp via one (or more) Transmitting Entities.
WHEREAS, PacifiCorp desires that Seller schedule delivery of Net Output to the Point
of Delivery on a firm, hourly basis;
WHEREAS, PacifiCorp does not intend to buy, and Seller does not intend to deliver,
more or less thar Net Output from the Facilty (except as expressly provided, below);
THEREFORE, Seller and PacifiCorp do hereby agree to the following, which shall
become part of their Power Purchase Agreement:
DEFINITIONS
The meaning of the terms defined in the Power Purchase Agreement ("this Agreement")
and this Addendum W shall apply to this Addendum:
"Day" means midnght to midnght, prevailng local time at the Point of Delivery, or any
other mutuly agreeable 24-hour period.
"Energy Imbalance Accumulation," or "EIA," means, for a given Settlement Period,
the accumulated difference (beginnng at zero (0) at the sta of each Settlement Period) between
Seller's Net Output and the energy actually delivered at the Point of Delivery. Each Settlement
Period contains two independent EIAs, one for On-Peak Hours and one for Off-Peak Hours. A
positive accumulated difference indicates Seller's delivery of Surlus Delivery.
"Firm Delivery" means uninterrptible transmission service that is reserved and/or
scheduled between the Points of Interconnection and the Point of Delivery pursuant to Seller's
Transmission Agreement(s).
"Settlement Period" means one month unless changed pursuat to Section 9 of this
Addendum.
"Supplemented Output" means any increment of scheduled hourly energy or capacity
delivered to the Point of Delivery in excess of the Facility's Net Output during that same hour.
"Surplus Delivery" means any energy delivered to the Point of Delivery by the Facilty
in excess of hourly Net Output that is not offset by the delivery of energy to the Point of
Delivery in deficit of hourly Net Output during the Settlement Period. PacifiCorp shall accept
Surlus Delivery, but shall not pay for it.
w - i
SELLER'S OBLIGATIONS IN LIEU OF THOSE CONTAINED IN A
GENERATION INTERCONNECTION AGREEMENT.
1. Seller's Responsibilty to Arrange for Delivery of Net Output to Point of
Deliverv. Seller shall arange for the Firm Delivery of Net Output to the Point of Delivery.
Seller shall comply with the terms and conditions of the Transmission Agreement(s) between the
Seller and the Transmitting Entity(s).
2. Seller's Responsibilty to Schedule Delivery. Seller shall coordinate with the
Transmitting Entity(s) to provide PacifiCorp with a schedule of the next Day's hourly scheduled
Net Output deliveries to the Point of Delivery at least 24 (twenty-four) hours prior to the
beginning of the day being scheduled, and otherwise in accordance with the WECC
Prescheduling Calendar (which is updated annually and may be downloaded at:
http://ww.wecc.biz/.
3. Seller's Responsibilty to Maintain Interconnection Facilties. PacifiCorp
shall have no obligation to install or maintain any interconnection facilities on Seller's side of the
Points of Interconnection. PacifiCorp shall not pay any costs arising from Seller interconnecting
its Facilty with the Transmitting Entity(s).
4. Seller's Responsibiltv to Pay Transmission Costs. Seller shall make all
arrangements for, and pay all costs associated with, transmitting Net Output to PacifiCorp,
scheduling energy into the PacifiCorp system and any other costs associated with delivering the
Seller's Net Output to the Point of Delivery.
5. Energy Reserve Requirements. The Transmitting Entity(s) shall provide all
generation reserves as required by the WECC and/or as required by any other governing agency
or industr standard to deliver the Net Energy to the Point of Delivery, at no cost to PacifiCorp.
6. Seller's Responsibilty to Report Net Output. On or before the tenth (lOth) day
followig the end of each Biling Period, Seller shall send a report documenting hourly station
service, Inadvertent Energy (energy delivered to the Point of Interconnection(x) at an average
hourly rate exceeding the Maximum Facilty Delivery Rate(x)), and Net Output from the Facilty
during the previous Biling Period, in columar format substantially similar to the attached
Example 1. Ifrequested, Seller shall provide an electronic copy of the data used to calculate Net
Output, in a standard format specified by PacifiCorp. For each day Seller is late delivering the
certified report, PacifiCorp shall be entitled to postpone its payment deadline in Section 9 of this
Agreement by one day. Seller hereby grants PacifiCorp the right to audit its certified reports of
hourly Net Output. In the event of discovery of a biling error resulting in underpayment or
overpayment, the Parties agree to limit recovery to a period of three years from the date of
discovery.
7. Seller's Supplemental Representations and Warranties. In addition to the
Seller's representations and waranties contaned in Section 3 of this Agreement, Seller warrants
that:
(a) Seller's Supplemented Output, if any, results from Seller's purchase of
some form of energy imbalance ancilar service;
(b) The Transmitting Entity(s) requires Seller to procure the service, above; as
a condition of providing transmission service;
W - 2
(c) The Transmitting Entity(s) requires Seller to schedule deliveries of Net
Output to the Point of Delivery in increments of no less than one (1) megawatt;
(d) Seller is not attempting to sell PacifiCorp energy or capacity in excess of
its Net Output; and
(e) The energy imbalance service, above, is designed to correct a mismatch
between energy scheduled by the QF and the actual real-time production by the QF.
(f) Seller shall not schedule delivery to the Point of Delivery at a rate
exceeding the Maximum Facility Delivery Rate rounded up to the nearest whole
megawatt.
8. Seller's Right to Deliver Supplemented Output. In reliance upon Seller's
waranties in Section 7, above, PacifiCorp agrees to accept and pay for Supplemented Output by
treating it as Net Output for those purposes; provided, however, that Seller agrees to achieve an
EIA of zero (0) kilowatt-hours during On-Peak Hours and an EIA of zero (0) kilowatt-hours
during Off-Peak Hours at the end of each Settlement Period.
(a) Remedy for Seller's Positive Energy Imbalance Accumulations. In the
event Seller does not achieve zero (0) EIA at the end of a Settlement Period, any positive
balance shall be Surlus Delivery and shall not be included in or treated as Net Output.
PacifiCorp wil include an accounting of Surlus Delivery in each monthly statement
provided to Seller pursuant to Section 9.1 of this Agreement.
(b) Negative Energy Imbalance Accumulations. A negative EIA at the end
of a Settlement Period (indicating that the Transmitting Entity has delivered less than
Seller's Net Output) wil not result in any corresponding compensation by PacifiCorp.
9. PacifiCorp's Option to Change Settlement Period. In the event PacifiCorp
reasonably determines that doing so likely wil have a de minimis net effect upon the cost of
Seller's Net Output to PacifiCorp, it may elect to enlarge the Settlement Period, up to a
maximum of one Contract Year. Conversely, if PacifiCorp reasonably determines, based on the
QF's performance during the curent year, that reducing the Settlement Period likely wil
significantly lower the net cost of Seller's Net Output to PacifiCorp, it shall have the right to
shorten Seller's EIA settlement period beginning the first day of the following Contract Year.
However, in no case shall the Settlement Period be less than one month. If a Settlement Period
does not coincide with a Biling Period, PacifiCorp shall deduct any amount paid for Surlus
Delivery durng that Settlement Period from the Biling Period terminating concurently or
soonest subsequently to the Settlement Period.
W - 3
Example of Seller's Output Reporting Requirement - Seller would complete one table for
FacilitYOower) and one table for FaciltYeupper) and a table with the summed Net Output.
E FC(=Max (0,
A B (=A-B)D C-D))(C-E)
Meter MeterReadinglj at reading at MaximumPoint of Station Adjusted Facility Net
Hour Interconnectio Power Gross Delivery Inadvertent Outputeio
ending nelower)Meterelower)OutputClower)Rateoower)EnergY(lower)wer)Day (HE)(MWh)* (MWh)(MWh)(MW)(MWh)(MWh)
1 7:00 0.50 0.01 0.49 1.50 0 0.49
1 8:00 0.50 0.02 0.48 1.50 0 0.48
1 9:00 0.50 0.01 0.49 1.50 0 0.49
1 10:00 0.50 0.01 0.49 1.50 0 0.49
1 11:00 0.50 0.01 0.49 1.50 0 0.49
1 12:00 1.60 0.01 1.59 1.50 0.09 1.50
1 13:00 1.70 0.01 1.69 1.50 0.19 1.50
1 14:00 1.60 0.01 1.59 1.50 0.09 1.50
1 15:00 1.50 0.01 1.49 1.50 0 1.49
1 16:00 1.50 0.01 1.50 1.50 0 1.50
1 17:00 1.50 0.00 1.50 1.50 0 1.50
1 18:00 1.50 0.01 1.49 1.50 0 1.49
1 19:00 0.50 0.02 0.48 1.50 0 0.48
1 20:00 0.50 0.01 0.49 1.50 0 0.49
'I Seller shall show adjustment of Meter Reading for losses, if any, between point of metering(x)
and the Point of Interconnectionex), in accordance with Section 8.1.
*
Does not apply if Station Service is provided from the gross output of the Facilty.
F L K
Hour ending Net OutPUI(lower)Net Outputeupper)Net Output
Day (HE)(MWh)(MWh)(MWh)
I :
7:00 0.49 0.20 0.69
8:00
W - 4
REDLINE VERSION
RE
2010 FEB -s AM 9: 3 l
REVISED AND RESTATED POWER PURCHASE AGREElVllJlfEB --5
BETWEEN
LOWER VALLEY ENERGY, INC.
(atwo non-fueled, non-Ievelized, non-MAG Qualifying FaciltyFacilities located in
PacifiCorp Control Area interconnected to non-PacifiCorp system in Wyoming
delivering power to PacifiCorp in Idaho-each 10aMWIMonth or less)
AND
PACIFICORP
lUi 9: 31
Section 1: Definitions...................................................................................................................... 2
Section 2: Term, Commercial Operation Date ................................................................................ 8
Section 3: Representations and Waranties......................................................................................8
Section 4: Delivery of Energy and Capacity.................................................................................. 12
Section 5: Purchase Prices............................................................................................................. 15
Section 6: Operation and Control .................................................................................................. 16
Section 7: Motive Force................................................................................................................. 18
Section 8: Metering........................................................................................................................ 18
Section 9: Bilings, Computations and Payments.......................................................................... 19
Section 10: Defaults and Remedies ....... .............................................................................. .......... 19
Section 11: Indemnification........................................................................................................... 21
Section 12: Liability and Insurance ...............................................................................................22
Section 13: Force Majeure.....................:.......................................................................................24
Section 14: Several Obligations.....................................................................................................25
Section 15: Choice of Law..................................................... ........................................................25
Section 16: Parial Invalidity ......................................................................................................... 25
Section 17: Waiver ........................................................................................................................ 26
Section 18: Governental Jurisdiction and Authorizations .......................................................... 26
Section 19: Successors and Assigns ..............................................................................................26
Section 20: Entire Agreement........................................................................................................ 26
Section 21: Notices ........................................................................................................................ 26
1
REVISED AND RESTATED POWER PURCHASE AGREEMENT
THIS REVISED AND RESTATED POWER PURCHASE AGREEMENT ("Revised
Agreement"), entered into this day of , 20W _' is between Lower Valley
Energy, Inc., a Wyoming Corporation (the "Seller") and PacifiCorp, an Oregon corporation
acting in its regulated electric utility capacity ("PacifiCorp"). Seller and PacifiCorp are referred
to collectively as the "Partes" and individually as a "Part".
RECITALS
A. Seller intends to construct, ovm, operate owns, operates and maintain a maintains two ru
of river hydroelectrc generating facility facilities for the generation of electric power located on
Swift Creek, in or near the town of Afton, Lincoln County, Wyoming with an expected Facility:.
The upriver plant was completed in May 2009 and has a Facility Capacity Rating of 940-
kilowatts (kW) ("Faeilty"); and
B. Seller intends to operate (the Facility "Upper Facilty"). The downiver plant
was completed in October 2009 and has a Qualifying Facility; as such term is defined in Section
1.37 below.Facility Capacity Rating of 535 kilowatts (kW) (the "Lower Facilty"); and
B. Seller sells and PacifiCorp purchases Net Output from the Upper Facility pursuant
to a Power Purchase Agreement dated May 22, 2009 ("Original PP A"); and
C. Seller and PacifiCorp wish to hereby amend the Original PP A to add provision for
the purchase of Net Output from the Upper Facility and Lower Facility, jointly, according to the
terms and conditions set forth herein; and
D. Seller intends to operate Upper Facility and Lower Facility-- each a separate
Qualifying Facility, as such term is defined in Section 1.37 below-as a single generating
facility, for puroses of this Revised PP A (Facilty); and
E. Seller estimates that the average anual Net Output to be delivered by the Facilty
to PacifiCorp is ~6,887,244 kilowatt-hours (kWh) pursuat to the monthly Energy Delivery
Schedule in Exhibit D hereto, which amount of energy PacifiCorp will include in its resource
planng; and
IlE. Seller shall sell and PacifiCorp shall purchase all the Net Output from the Facilty
in accordance with the terms and conditions of this Agreement.
EG. Seller intends to transmit Net Output from the Facility to PacifiCorp via
transmission facilties operated by a thrd par, and PacifiCorp intends to accept scheduled firm
delivery of Seller's Net Output, under the terms of this Agreement, including the Generation
Scheduling Addendum attched as Addendum W and incorporated contemporaneously
herewith.
FH. This Agreement is a "New QF Contract" under the PacifiCorp Inter-Jurisdictional
Cost Allocation Revised Protocol and, as such, the costs of QF energ)' under this Agreement
shall be allocated as a system resource unless any portion of those costs exceeds the cost
PacifiCorp '.vould have otherwise incured acquiring comparable resources. In that event, the
Revised Protocol assigns those excess costs on a situs basis to the state in vAiich the Faeilty is
located. In addition, for the puroses of inter jUrisdictional cost allocation, PacifiCorp represents
1
that the costs of this A:greement do not exceed the costs PacifiCorp viould have othenvise
incured acquiring resources in the market that æ=e defined as "Compæ=able ResoUTces" in
Appendix A to the Inter Jurisdictional Cost Allocation Revised Protocol. For the pUToses of
inter jUlisdictional cost allocation, PacifiCorp represents that the costs and revenues from the
energy and capacity sold to Seller by PacifiCorp váll be assigned on a situs basis to the state to
vAiich Net Outut from the Facility is delivered.
NOW, THEREFORE, the Paries mutually agree as follows:
SECTION 1: DEFINITIONS
When used in this Agreement, the followig terms shall have the following meanings:
1.1 "Adjusted Scheduled Monthly Energy Delivery" shall have the meaning set
fort in Section 4.3
hl 1.2 "Amendment Date" is defined in Section 2.1.
~1.3 "As-built Supplement" shall be a supplement to Exhibit A, provided by Seller
following completion of constrction ofthe Facility, describing the Facility as actually built.
ld 1.4 "Biling Period" means the time period between PacifiCorp's reading of its power
purchase meeters at the Facility and for this Agreement shall coincide with calendar months.
Ml.5 "Capacity Factor" means, for any given period of time, the Net Output divided by
the product of Facility Capacity Rating and the tota hours in the given period of time.
M 1.6 "Commercial Operation" means the Facilty is fuly operational and reliable, at
not less than ninety percent (90%) of the expected Facility Capacity Rating, and interconnected
and synchronized with the Transmission Entity's System. In order to meet the requirements for
Commercial Operation, all of the following events shall have occured:
~ 1.6.1 PacifiCorp shall have received a certificate addressed to PacifiCorp
from a Licensed Professional Engineer (a) stating the Facilty Capacity Rating of the
Facility at the anticipated time of Commercial Operation and (b) stating that the Facilty
is able to generate electric power reliably in amounts required by this Agreement and in
accordance with all other terms and conditions of this Agreement;
lá1.6.2 Start-Up Testing of the Facility shall have been completed;
~1.6.3 PacifiCorp has received an executed copy of Seller's Transmission
i\greenaent(s); and
lá 1.6.4 PacifiCorp shall have received a certificate addressed to PacifiCorp
frona a Licensed Professional Engineer, or an attorney in good stading in Idaho or
Wyoming, stating that Seller has obtained all Required Facilty Documents and, if
2
requested by PacifiCorp in writing, Seller shall have provided copies of any or all such
requested Required Facility Documents.
Seller shall provide notice to PacifiCorp when Seller believes that the Facility has achieved
Commercial Operation. PacifiCorp shall have ten (10) days afer receipt of such notice either to
confrm to Seller that all of the conditions to Commercial Operation have been satisfied or have
occured, or to state with specificity those conditions that PacifiCorp reasonably believes have
not been satisfied or have not occured. If, within such ten (10) day period, PacifiCorp does not
respond or notifies Seller confrming that the Facility has achieved Commercial Operation, the
original date of receipt of Seller's notice shall be the Commercial Operation Date. If PacifiCorp
notifies Seller within such ten (10) day period that PacifiCorp believes the Facilty has not
achieved Commercial Operation, Seller shall be obligated to address the concerns stated in
PacifiCorp's notice to the mutual satisfaction of both Paries, and Commercial Operation shall be
deemed to occur on the date of such satisfaction, as specified in a notice from PacifiCorp to
Seller. If Commercial Operation is achieved at less than one hundred percent (100%) of the
expected Facility Capacity Rating, Seller shall provide PacifiCorp an expected date for achieving
the expected Facility Capacity Rating, and the Facility's Capacity Rating on that date shall be the
final Facilty Capacity Rating under this Agreement. In no event will delay in achieving the
expected Facilty Capacity Rating beyond the Commercial Operation Date postpone the
Expiration Date specified in Section 2.1.
M1.7 "Commercial Operation Date" means the date the Facilty first achieves
Commercial Operation.
1- i. 8 "Commission" means the Idaho Public Utilties Commission.
h& 1.9 "Conforming Energy" means all Net Energy delivered to the Point of Delivery
except Non-Conforming Energy.
h91.l0 "Conforming Energy Price" means the applicable price for Conforming
Energy and capacity, specified in Section 5.1.
-hl.ll "Contract Year" means a twelve (12) month period commencing at 00:00
hours Mountain Prevailing Time ("MPT") on January 1 and ending on 24:00 hours MPT on
December 31; provided, however, that the first Contract Year shall commence on the
Commercial Operation Date and end on the next succeeding December 31, and the last Contract
Year shall end on the Expiration Date, unless earlier terminated as provided herein.
1.11 "Delay Liquidated Damages", "Delay Period", "Delay Priee" and "Delay
Volume" shall have the meanings set fort in Section 2.3 of this Agreement;
1.12 "Effective Date" shall have means July 16, 2009, the Effective Date of the
meaning set fort in Section 2.1 of this AgreementOriginal PP A.
1.13 "Energy Delivery Schedule" shall have the meanng set fort in Section 4.2 of
this Agreement.
3
1.14 "Expiration Date" shall have the meaning set forth In Section 2.1 of this
Agreement.
1.15 "Facilty" means Seller's projectUpper Facility and Seller's Lower Facility, both,
unless otherwise noted, including the Seller's Interconnection Facilties, as described in the
Recitals, Exhibit A, and Exhibit B. "Facility~ and "FacilitYoower)" refer to the Upper Facility
and Lower Facility, individually. The term "Facility" without any such suffx refers to the entire
Facility unless the context requires otherwise. Facility.ú and FacilitYnower) are described
separately in Exhibit A.
1.16 "Facilty Capacity Rating" means the sum of the Nameplate Capacity Ratings for
all generators comprising the Facilty.
1.17 "Force Majeure" has the meanng set forth in Section 13.1.
1.18 "Generation Scheduling Addendum" means Addendum W, the portion of this
Agreement providing for the measurement, scheduling, and delivery of Net Output from the
Facility to the Point of Delivery via a non-PacifiCorp Transmission Entity(s).
1.19 "Inadvertent Energy" means energy delivered to the Point of Interconnectionw
(l) in excess of the Maximum Monthly Purchase Obligation; or (2) at an average hourly rate
exceeding the Maximum Facilty Delivery Rateúù' Inadvertent Energy is not included in Net
Output.
1.20 "Index Pric~", for each day, shall mean the weighted average of the daily On
average Peak and Off-Peak Do.." Jones Palo Verde index prices for firm energy market prices, as
published in the Intercontinental Exchange (ICE) Day Ahead Power Price Report for the Palo
Verde Hub. For Sunday and NERC holidays, the 24-Hour Index Price shall be used, uness I)
Jones +MICE shall publish a Firm On-Peak and Firm Off-Peak Price for such days for Palo
Verde, in which event such indices shall be utilzed for such days. If the Dow Jones +MICE
index or any replacement of that index ceases to be published during the term of ths Agreement,
PacifiCorp shall select as a replacement a substatially equivalent index that, after any
appropriate or necessary adjustments, provides the most reasonable substitute for the index in
question. PacifiCorp's selection shall be subject to Seller's consent, which Seller shall not
uneasonably withold, condition or delay.
1.21 "Initial Year Energy Delivery Schedule" shall have the meanng set forth in
Section 4.2.1.
1.22 "Interconnected Utilty" means Lower Valley Energy, Inc., the operator of the
electrc utility system at the PePoints of Interconnection.
1.23 "Interconnection Facilities" means all the facilties and ancilar equipment used
to interconnect the Facility to the Interconnected Utilty, including electrcal transmission lines,
upgrades, transformers, and associated equipment, substations, relay and switching equipment,
and safety equipment.
4
1.24 "Licensed Professional Engineer" means a person acceptable to PacifiCorp in its
reasonable judgment who is licensed to practice engineering in the state of Wyoming, who has
training and experience in the engineering discipline(s) relevant to the matters with respect to
which such person is called to provide a certification, evaluation and/or opinion, who has no
economic relationship, association, or nexus with the Seller, and who is not a representative of a
consulting engineer, contractor, designer or other individual involved in the development of the
Facilty, or of a manufactuer or supplier of any equipment instaled in the Facility. Such
Licensed Professional Engineer shall be licensed in an appropriate engineering discipline for the
requied certification being made. The engagement and payment of a Licensed Professional
Engineer solely to provide the certifications, evaluations and opinions required by this
Agreement shall not constitute a prohibited economic relationship, association or nexus with the
Seller, so long as such engineer has no other economic relationship, association or nexus with the
Seller.
1.25 "Material Adverse. Change" shall mean, with respect to the Seller, if the Seller,
in the reasonable opinion of PacifiCorp, has experienced a material adverse change in ability to
fulfill its obligations under this Agreement.
1.26 "Maximum Curtailed Facilty Delivery Rate" means the maximum
instataeous rate (kW) at which the Facility is capable of delivering Net Output at the
PePoints of Interconnection durng a Qualifying Curilment.
1.27 "Maximum Facilty Delivery Rate" means the maximum instataeous rate (kW)
at which the Facility is capable of delivering Net Output at the PePoints of Interconnection, as
specified in Exhibit A, and in compliance with the Facility's generation interconnection
agreement, if applicable.
1.28 "Maximum Monthly Purchase Obligation" means the maximum amount of
energy PacifiCorp is obligated to purchase under this Agreement in a calendar month, In
accordance with Commission Order 29632, the Maximum Monthly Purchase Obligation for the
Facility for a given month, in kWh, shall equal 10,000 kW multiplied by the total number of
hours in that month.
1.29 "Motive Force Plan" shall have the meaning set forth in Section 7 of this
Agreement.
1.30 "Nameplate Capacity Rating" means the maximum instantaeous generating
capacity of any qualifying small power or cogeneration generating unit supplying all or par of
the energy sold by the Facility, expressed in MW, when operated consistent with the
manufactuer's recommended power factor and operating parameters, as set fort in a notice
from Seller to PacifiCorp delivered before the Commercial Operation Date and, if applicable,
updated in the As-built Supplement.
1.31 "Net Energy" means the energy component, in kWh, of Net Output.
1.32 "Net Output" means all energy and capacity produced by the Facility, less station
use and less transformation and transmission losses and other adjustments, if any. For puroses
of calculating payment under ths Agreement, Net Output of energy shall be the amount of
5
energy flowing through the PePoints of Interconnection, less any station use not provided by
the Facility. Net Output does not include Inadvertent Energy.
1.33 "Non-Conforming Energy" means for any Biling Period: (1) that portion of Net
Energy delivered to the Point of Delivery in excess of 110% of the Scheduled Monthly Energy
Delivery for that Biling Period delivered subsequently to that initial 110%; or (2) all Net Energy
delivered to the Point of Delivery when Net Energy delivered is less than 90% of the Scheduled
Monthly Energy Delivery for that Biling Period; or (3) all Net Output produced by the Facility
prior to the Commercial Operations Date.
1.34 "Non-Conforming Energy Price" means the applicable pnce for Non-
Conforming Energy and capacity, specified in Section 5.1.
1.35 "Off-Peak Hours" means all hours of the week that are not On-Peak Hours.
1.36 "On-Peak Hours" means hours from 7:00 a.m. to 11 :00 p.m. Mountain Prevailng
Time, Monday through Satuday, excluding Western Electricity Coordinating Council (WECC)
and Nort American Electric Reliability Corporation (NERC) holidays.
1.37 "PacifiCorp Transmission" means PacifiCorp, an Oregon corporation, acting in
its transmission fuction capacity.
1.38 "Point of Delivery" means PacifiCorp's 161 kV busbar at the Goshen Substation,
Idaho the point of interconnection between Bonnevile Power Administration's system and
PacifiCorp's system where PacifiCorp has agreed to receive Seller's Net Output.
1.39 "Point of Interconnectionnoweri" means the high voltage side of Seller's step-up
transformer at the point of interconnection between Seller's Facilityoowerl and the Interconnected
Utilty's system.
1.40 "Point of Interconnectionlupper( means the high voltage side of Seller's step-up
transformer at the point of interconnection between Seller's Facilityí. and the Interconnected
Utility's system.
i .4 i "Points of Interconnection" means both the Point of Interconnectionooweri and
Point of Interconnectioní.~
~i.42 "Prime Rate" means the rate per anum equal to the publicly anounced
prime rate or reference rate for commercial loans to large businesses in effect from time to time
quoted by JPMorgan Chase & Co. If a JPMorgan Chase & Co. prime rate is not available, the
applicable Prime Rate shall be the anounced prime rate or reference rate for commercial loans
in effect from time to time quoted by a ban with $10 bilion or more in assets in New York
City, N.Y., selected by the Par to whom interest based on the prime rate is being paid.
l4 1.43 "Prudent Electrical Practices" means any of the practices, methods and
acts engaged in or approved by a significant portion of the electrical utilty industr or any of the
practices, methods or acts, which, in the exercise of reasonable judgment in the light of the facts
known at the time a decision is made, could have been expected to accomplish the desired result
6
at the lowest reasonable cost consistent with reliability, safety and expedition. Prudent Electrcal
Practices is not intended to be limited to the optimum practice, method or act to the exclusion of
all others, but rather to be a spectru of possible practices, methods or acts.
-h1.44 "Qualifying Curtailment" shall have the meaning set forth in Section 4.3.
lÆI.45 "QF" means "Qualifying Facilty", as that term is defined in the version
of FERC Regulations (codified at 18 CFR Par 292) in effect on the date of this Agreement.
-h1.46 "Replacement Period", "Net Replacement Power Costs",
"Replacement Price" and "Replacement Volume" shall have the meanngs set forth in Section
10.4 of this Agreement;
~ 1.4 7 "Required Facilty Documents" means all material licenses, permits,
authorizations, and agreements necessar for constrction, operation, and maintenance of the
Facility, including without limitation those set forth in Exhibit C.
-h1.48 "Seheduled CommeFeial OpeFatioBS DateRevised Agreement" means
the date bythis Revised and Restated Power Purchase Agreement, which Seller promises to
achieve Commercial Operation, supersedes the Original PPA as specified in Section 2.2.5.of the
Amendment Date.
-h1.49 "Scheduled Maintenance Periods" means those times scheduled by
Seller with advance notice to PacifiCorp as provided in Section 6.2 uness otherwse mutually
agreed.
-h 1.50 "Scheduled Monthly Energy Delivery" means the Net Energy scheduled
to be delivered to the Point of Delivery during a given calendar month, as specified by Seller in
the Energy Delivery Schedule.
1-1.5l "Start-Up Testing" means the completion of required factory and sta-up
tests as set forth in Exhibit E hereto.
-h1.52 "Subsequent Energy Delivery Schedule" shall have the meanng set
forth in Section 4.2.3.
lá 1.53 "Tariff' means the PacifiCorp FERC Electric Tarff Fifth Revised
Volume No.1 1 Pro Forma Open Access Transmission Tarff, as revised from time to time.
~1.54 "Transmission Agreement(s)" means the agreement(s) (or
contemporaneous agreements) between Seller and the Transmitting Entity(s) providing for
Seller's unnterrptible right to transmit Net Output to the Point of Delivery.
l.1.55 "Transmitting Entity(s)" means the Bonnevile Power Administration,
the (non-PacifiCorp) operator(s) of the transmission system(s) between the PePoints of
Interconnection and the Point of Delivery.
7
SECTION 2: TERM, COMMERCIAL OPERATION DATE
2.1 This Revised Agreement shall become effective afat 12:00:01 am on the day
following execution by both Paries and after approval by the Commission
("EffeetiveAmendment Date"); provided, however, this Revised Agreement shall not become
effective until the Commission has determined that the prices to be paid for energy and capacity
are just and reasonable, in the public interest, and that the costs incured by PacifiCorp for
purchases of capacity and energy from Seller are legitimate expenses, all of which the
Commission wil allow PacifiCorp to recover in rates in Idaho in the event other jurisdictions
deny recovery of their proportionate share of said expenses.
Unless earlier terminated as provided herein, ththis Revised Agreement shall remain in effect
until May 1,2012 ("Expiration Date").
2.2 Time is of the essence of this Revised Agreement, and Seller's ability to meet
certain requirements prior to the Commercial Operation Date and to achieve Commercial
Operations by the Scheduled Commercial Operation Date is critically importt. Therefore,
2.2.1 By May 22, 2009,PacifiCorp deemed Seller shall use best efforts to
obtain and provide to PacifiCorp copies of all governental permits and autorizations
necessary for construction of have achieved the Commercial Operation Date on
("Commercial Operation Date"), the date the Lower Facility achieved
Commercial Operation. (The Upper Facility-; achieved commercial operation under the
Original PPA on July 24,2009.1
2.2.2 By May 22, 2009By March 31, 2010, Seller shall provide PacifiCorp
with a copy of an executed Transmission Agreement(s), which shall be consistent with all
materialwhose terms and requirements shall include: (1) reserved capacity equal to or
greater than the Maximum Facility Delivery Rate of Seller's combined Facility, (2) a
termination date (including any rollover rights) equal to or greater than the Expiration
Date of this Agreement-;; (3) and shall otherwise be consistent with this Agreement.
2.2.3 By May 22, 2009, Seller shall use best efforts to provide to
PacifiCorp 'mitten evidence acceptable to PacifiCorp that Seller has obtained the
contractual right to take delivery of the prime mover(s) specified in Exhibit 1A",.
~2.2.3 Prior to Commercial Operation DateBy March 31, 2010, Seller shall
provide PacifiCorp with an As-built Supplement acceptable to PacifiCorp.
2.2.5 By JUDe 1,2009, Seller shall have achieved Commercial Operation
("8eheduled Cemmereial OfleratieD Date").
~2.2.4 PacifiCorp has received an executed copy of Exhibit H-Seller's
Interconnection Request.
2.3 Seller shall cause the Facility to achieve Commercial Operation on or before the
Scheduled Commercial Operation Date. If Commercial Operation occurs afer the Scheduled
Commercial Operation Date, Seller shall be liable to pay PacifiCorp delay damages for the
8
number of days ("Delay PeFiod") the Commercial Operation Date occurs afer the Scheduled
Commercial Operation Date, up to a total of 120 days ("Delay Liquidated Damages"). Bilings
and payments for Delay Liquidated Damages shall be made in accordælce viith Section 9. Any
undisputed amount of Delay Liquidated Damages not paid viÍthin 30 days of the invoice date
shall be dravff on the Delay Security.
Delay Liquidated Damages equals the sum of the Delay Price times the Delay Volume,
for each day of the Delay Period.
Where:
"Delay PFiee" equals the positive difference, if ælY, of the Index Price minus the
weighted average of the On Peak æld Off Peak monthly Conforming Energy Prices; and
"Delay Volume" equals the applicable Scheduled Monthly Energy Delivery divided by
the nuber of days in that mont.
The Parties agree that the damages PacifiCorp would incur due to delay in the Facility achieving
Commercial Operation on or before the Scheduled Commercial Operation Date would be
diffcult or impossible to predict with certainty, æld that the Delay Liquidated Damages are æl
appropriate approximation of such damages.
2.3.1 Duty to Post Security. Seller, \vithin thirty (30) days after
Commission approval of this Agreement, shall provide Delay Security in the amount
determined pursuan to 2.3.2 and in a form deemed acceptable by Section 2.3.3.
2.3.2 Delay Security Amoun. PacifiCorp shall calculate the amoun of
Delay Security by making good faith forecast of Delay Liquidated Damages, as
calculated in Section 2.3, for each mont of the potential 120 day delay period. The
Delay Security viÍll be $0.
2.3.3 Acceptable Forms of Security. Seller shall provide Delay Security in
the form of:
LetteF of CFedit: An irre'vocable stældby letter of credit, from æl institution that
has a long term senior unsecured debt rating of "A:" or greater from Stældard &
Poor's or "A2" or greater from Moody's, in a form reasonably acceptable to
PacifiCorp, naming PacifiCorp as the pary entitled to demæld payent æld
present draw requests thereooder; or
Cash EseFow: fuds deposited in æl escro'N account established by the Seller in a
baning institution acceptable to both Paries.
9
2.3.4 Termination of Delay 8ecurity. 8eller may terminate or withdraw
the Delay 8ecurity on the ¡80th day following commencement of Commercial Operation
by providing PacifiCorp with no less than thirty (30) days advanced written notice of its
intent to do so unless PacifiCorp disputes whether all Delay Liquidated Damages have
been paid.
SECTION 3: REPRESENTATIONS AND WARRNTIES
3.1 PacifiCorp represents, covenants, and warants to Seller that:
3.1.1 PacifiCorp is duly organized and validly existing under the laws of
the State of Oregon.
3.1.2 PacifiCorp has the requisite corporate power and authority to enter
into this Agreement and to perform according to the terms of this Agreement.
3.1.3 PacifiCorp has taen all corporate actions required to be taen by it
to authorize the execution, delivery and pedormance of this Agreement and the
consumation of the transactions contemplated hereby.
3.1.4 Subject to Commission approval, the execution and delivery of this
Agreement does not contravene any provision of, or constitute a default under, any
indenture, mortgage, or other material agreement binding on PacifiCorp or any valid
order of any cour, or any reguatory agency or other body having authority to which
PacifiCorp is subject.
3.1.5 Subject to Commission approval, this Agreement is a valid and
legally binding obligation of PacifiCorp, enforceable against PacifiCorp in accordance
with its terms (except as the enforceabilty of this Agreement may be limited by
banptcy, insolvency, ban moratorium or similar laws affecting creditors' rights
generally and laws restricting the availabilty of equitable remedies and except as the
enforceability of this Agreement may be subject to general principles of equity, whether
or not such enforceability is considered in a proceeding at equity or in law).
3.2 Seller represents, covenants, and warants to PacifiCorp that:
3.2.1 Seller is a Wyoming corporation duly organized and validly existing
under the laws of Wyoming.
3.2.2 Seller has the requisite power and authority to enter into this
Agreement and to pedorm according to the terms hereof, including all required
regulatory authority to make wholesale sales from the Facility.
3.2.3 Seller's shareholders, directors, and offcers have taen all actions
required to authorize the execution, delivery and pedormance of this Agreement and the
consumation of the transactions contemplated hereby.
10
3.2.4 The execution and delivery of this Agreement does not contravene
any provision of, or constitute a default under, any indentue, mortgage, or other material
agreement binding on Seller or any valid order of any cour, or any regulatory agency or
other body having authority to which Seller is subject.
3.2.5 Ths Agreement is a valid and legally binding obligation of Seller,
enforceable against Seller in accordance with its terms (except as the enforceability of
this Agreement may be limited by banptcy, insolvency, ban moratorium or similar
laws affecting creditors' rights generally and laws restricting the availability of equitable
remedies and except as the enforceabilty of this Agreement may be subject to general
principles of equity, whether or not such enforceability is considered in a proceeding at
equity or in law).
3.2.6 The Facility is and shall for the term of ths Agreement continue to
be a-QFtwo QFs. Seller has provided the appropriate QF certification, which may
include a Federal Energy Regulatory Commission self-certification to PacifiCorp prior to
PacifiCorp's execution of ths Agreement. At any time PacifiCorp has reason to believe
durng the term of this Agreement that Seller's status as a QF is in question, PacifiCorp
may require Seller to provide PacifiCorp with a written legal opinion from an attorney in
good standing in the state of Idaho and who has no economic relationship, association or
nexus with the Seller or the Facility, stating that the Facilty is a QF and providing
sufficient proof (including copies of all documents and data as PacifiCorp may request)
demonstrating that Seller has maintained and will continue to maintain the Facility as a
QF.
3.2.7 The description of Seller's Facility in Exhibit A and Exhibit B is
correct.
~3.2.8 Neither the Seller nor any of its principal equity owners is or has
within the past two (2) years been the debtor in any banptcy proceeding, is unable to
pay its bils in the ordinar course of its business, or is the subject of any legal or
reguatory action, the result of which could reasonably be expected to impair Seller's
abilty to own and operate the Facilty in accordance with the terms of ths Agreement.
~3.2.9 Seller has not at any time defaulted in any of its payment obligations
for electricity purchased from PacifiCorp.
~3 .2.1 0 Seller is not in default under any of its other agreements and is
curent on all of its financial obligations.
~3.2.ll Seller owns all right, title and interest in and to the Facilty, free and
clear of all liens and encumbrances other than liens and encumbrances related to third-
par financing of the Facility.
3.3 Notice. If at any time during ths Agreement, any Par obtains actual knowledge
of any event or information which would have caused any of the representations and waranties
in this Section 3 to have been materially untre or misleading when made, such Pary shall
provide the other Pary with written notice of the event or information, the representations and
11
waranties affected, and the action, if any, which such Pary intends to take to make the
representations and waranties true and correct. The notice required pursuant to this Section
shall be given as soon as practicable after the occurence of each such event.
SECTION 4: DELIVERY OF ENERGY AND CAPACITY
4.1 Delivery and Acceptace of Net Output-Unless otherwse provided herein,
PacifiCorp will purchase and Seller will sell all of the Net Output from the Facility.
4.2 Energy Delivery Schedule-Seller shall prepare and provide to PacifiCorp, on an
ongoing basis, a written schedule of Net Energy expected to be delivered to the Point of Delivery
by the Facility ("Energy Delivery Schedule"), in accordance with the following:
4.2.1 Durng the first twelve full calendar months following the
Commercial Operations Date, Seller predicts that the Facility wil produce and deliver to
the Point of Delivery the following monthy amounts ("Initial Year Energy Delivery
Schedule"):
Month
January
February
March
EneFgv Delivery (kWh)
193,440
147,840
163,680
282,939
562,150
671,287
677,951
550,511
382,459
374,729
300,058
223,200
Ap
MaJu
My
August
September
October
November
December
12
Month Faciltvupper Faciltylower Facilty Energy
Energy Delivery Energy Delivery Delivery
(kWh)(kWh)(SMED)
kWh
January 193,440 103,674 297,114
February 147,840 82,376 230,216
March 163,680 86,937 250,617
April 282,939 121,562 404,501
May 477,827 271,651 749,478
June 570,593 362,918 933,511
July 576,258 347,058 923,316
August 550,511 237,126 787,637
September 382,459 155,030 537,489
October 374,729 149,273 524,002
November 300,058 125,785 425,843
December 223,200 113,611 336,811
4.2.2 Seller may revise the Initial Year Energy Delivery Schedule any
time prior to the Commercial Operation Date.
4.2.3 Beginning at the end of the ninth full calendar month of operation,
and at the end of every 3rd month thereafter, Seller shall supplement the Energy Delivery
Schedule with thee additional months of forward estimates (which shall be appended to
this Agreement as Exhibit D) ("Subsequent Energy Delivery Schedule"), such that the
Energy Delivery Schedule will provide at least six months of scheduled energy estimates
at all times. Seller shall provide Subsequent Energy Delivery Schedules no later than
5 :00 pm of the 5th day afer the due date. If Seller does not provide a Subsequent Energy
Delivery Schedule by the above deadline, scheduled energy for the omitted period shall
equal the amounts scheduled by Seller for the same three-month period during the
previous year.
4.2.4 Beginnng with the end of the third month afer the Commercial
Operation Date and at the end of every third month thereafter; (1) the Seller may not
revise the immediate next three months of previously provided Energy Delivery
Schedules, but by written notice given to PacifiCorp no later than 5:00 PM of the 5th day
following the end of the previous month, the Seller may revise all other previously
provided Energy Delivery Schedules. Failure to provide timely written notice of changed
amounts will be deemed to be an election of no change.
4.3 Adjustment of Energy Delivery Schedule. IfPacifiCorp is excused from accepting
all or par of Seller's Net Output due to the occurence of circumstaces specified in Section
13
6.3.1 and 6.3.2 and, or if Seller is excused from delivery due to the occurence of circumstaces
specified in Section 6.4, or due to a combination thereof ("Qualifying Curtailment") the
Scheduled Monthy Energy Delivery will be adjusted, pro rata ("Adjusted Scheduled Monthly
Energy Delivery"). The Adjusted Scheduled Monthly Energy Delivery shall be calculated as
follows:
SMED(ad) SMED*~ ífHc1*DRm-DRc1JÎC i=l t Ht DRm)J
SMED(adj) = SMED*(i- t(HCi * DRm -DRCi)lìi=l Ht DRm ~
Where:
SMED Scheduled Monthy Energy Delivery for the month in which the
curlment occurs
Adjusted Scheduled Monthly Energy Delivery for the month in
which curailment occurs
total hours of the Qualifying Curailment in the month subject of
this calculation
tota hours in the month in which curlment occurs
SMED(adj) =
Hc¡
Ht
DRc¡the Maximum Curiled Facility Delivery Rate
the Maximum Facilty Delivery Rate
a Qualifying Curlment
n the number of Qualifying curlments in the month
Where Qualifying Curlments overlap, each distinct period of overlap shall be
calculated as a separate Qualifying Curilment such that no hour withn a month
may figue into more than one Qualifying Curilment.
=DRm
4.4 Termination for Non-availabilty. Unless excused by an event of Force Majeure,
Seller's failure to deliver any Net Energy to the Point of Delivery for a continuous period of
three months shall constitute an event of default.
14
SECTION 5: PURCHASE PRICES
5.1 Energy Purchase Price. Except as provided in Section 5.3, PacifiCorp wil pay
Seller non-Ievelized, Conforming Energy or Non-Conforming Energy Purchase Prices for
capacity and energy adjusted for seasonality and On-PeakOff-Peak Hours using the following
formulae, in accordance with Commission Order 30480 and Errata to Order 30480:
Conforming Energy Purchase Price = ARce * MPM
Non-Conforming Energy Purchase Price = Minimum of (ARc * MPM; PV-85)
Where~.:
ARe.! the Conforming Energy aBBoal FateAnnual Rate from
Table 1; "MPM" is Table 1, below, for the appFoluiate year of the Net Output;
MPM = the monthly On-Peak or Off-Peak multiplier from Table 2; and "Table 2
below, that corresponds to the month of the Net Output and whether the
Net Output occurred during On-Peak Hours or Off-Peak Hours.
PV -85~ 85% of the monthy weighted average of the daily On Peak and
Off Peak Dow Jones Palo Verde Index for firm energy. The appropriate MPM depends on the
mont of delivery and vffether the hour of delivery is On Peak or Off Peak. Price.
Example calculations are provided in Exhibit G.
Table 11: Conforming Energy Annual Rates
Conforming Energy
Annual Rate (ARe)Year $~h2009 76.73
2010 75.832011 77.952012 80.24
Table i~: Monthly On-PeaklOff-Peak Multipliers
Month On-Peak Off-Peak
Hours Hours
Januar 103%94%
Februar 105%97%
March 95%80%
April 95%76%
May 92%63%
June 94%65%
July 121%92%
AU1mst 121%106%
September 109%99%
October 115%105%
15
November
December
110%
129%
96%
120%
5.2 Payment
For the Biling Period in each Contract Year:
5.2.1 If Net Energy delivered to the Point of Delivery is between 90% and
110% of the Scheduled Monthly Energy Delivery, then:
Payment = _Conforming Energy (kWh) times Conforming Energy Purchase Price
($/MWh) divided by 1000.
5.2.2 If Net Energy delivered to the Point of Delivery is less than 90% of
the Scheduled Monthly Energy Delivery, then:
Payment - _Non-Conforming Energy (kWh) times Non-Conforming Energy
Purchase Price ($/MWh) divided by 1000.
5.2.3 If Net Energy delivered to the Point of Delivery is greater than 110%
of the Scheduled Monthly Energy Delivery, then
Payment = _Conforming Energy (kWh) times Conforming Energy Purchase Price
($/MWh) divided by 1000 plus Non-Conforming (kWh) times Non-
Conforming Energy Purchase Price ($/MWh) divided by 1000.
5.3 Inadvertent Eneriz. PacifiCorp may accept Inadvertent Energy at its sole
discretion, but will not purchase or pay for Inadvertent Energy.
SECTION 6: OPERATION AND CONTROL
6.1 Seller shall operate and maintain the Facility in a safe maner in accordance with
this Agreement, the Facility's generation interconnection agreement, if applicable, Transmission
Agreement(s), Prudent Electrical Practices and in accordance with the requirements of all
applicable federal, state and local laws and the National Electric Safety Code as such laws and
code may be amended from time to time. PacifiCorp shall have no obligation to purchase Net
Output from the Facility to the extent the interconnection between the Facilty and the Point of
Delivery is disconnected, suspended or interrpted, in whole or in par, pursuant to the Facility's
generation interconnection agreement, if applicable, or Transmission Agreement(s), or to the
extent generation curailment is required as a result of Seller's non-compliance with the
Facilty's generation interconnection agreement, if applicable, or Transmission Agreement(s).
PacifiCorp shall have the right to inspect the Facility to confirm that Seller is operating the
Facilty in accordace with the provisions of this Section 6.3 upon reasonable notice to Seller.
Seller is solely responsible for the operation and maintenance of the Facility. PacifiCorp shall
not, by reason of its decision to inspect or not to inspect the Facilty, or by any action or inaction
taen with respect to any such inspection, assume or be held responsible for any liability or
occurence arising from the operation and maintenance by Seller of the Facility.
16
6.2 Seller may cease operation of the entire Facilty or any individual unt for
Scheduled Maintenance Periods for each calendar year at such times as are provided in the
monthy operating schedule set forth as Exhibit D.
6.3 Energy Acceptace
6.3.1 PacifiCorp shall be excused from accepting and paying for Net
Output or accepting Inadvertent Energy 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 if PacifiCorp determines that curailment, interrption or reduction of Net
Output or Inadvertent Energy deliveries is necessar because of line constrction or
maintenance requirements, emergencies, electrical system operating conditions on its
system or as otherwse required by Prudent Electrcal Practices. If, for reasons other than
an event of Force Majeure, PacifiCorp requires such a curlment, interrption or
reduction of Net Output deliveries for a period that exceeds twenty (20) days, beginning
with the twenty-first day of such interrption, curailment or reduction, Seller will be
deemed to be delivering Net Output at a rate equivalent to the pro rata daily average of
the amounts specified for the applicable month in the Energy Delivery Schedule under
Section 4.2 unadjusted by Section 4.3. PacifiCorp will notify Seller when the
interrption, curilment or reduction is terminated.
6.3.2 PacifiCorp shall not be obligated to purchase, receive or pay for Net
Output that is not delivered to the Point of Delivery (a) during times and to the extent tht
such energy is not delivered because the interconnection between the Facilty and
PacifiCorp's system is disconnected, suspended or interrpted, in whole or in par,
pursuat to the Facility's generation interconnection agreement, if applicable, or
Transmission Agreement(s), (b) durng times and to the extent that such energy is not
delivered because the Transmission Entity Curails (as defined in the Tariff)
Transmission Service (as defined in the Tariff to PacifiCorp pursuant to the terms of the
Tariff, or (c) during times and to the extent that an event of Force Majeure prevents either
Pary from delivering or receiving such energy.
6.3.3 Under no circumstaces will the Seller deliver Net Output and/or
Inadvertent Energy from the Facilty to the Point of Delivery in an amount that exceeds
the Maximum Facility Delivery Rate, except as provided in Addendum W. Seller's
failure to limit deliveries to the Maximum Facility Delivery Rate shall be a Material
Breach of this Agreement.
6.4 Seller Declared Suspension of Energy Deliveries.
6.4.1 If the Seller's Facilty experiences a forced outage due to equipment
failure which is not caused by an event of Force Majeure or by neglect, disrepair or lack
of adequate preventative maintenance of the Seller's Facility, Seller may, after giving
notice as provided in Section 6.4.2 below, temporarly suspend all deliveries of Net
Energy to PacifiCorp from the Facility or from individua generation unites) within the
Facility affected by the forced outage for a period of not less than 48 hours to correct the
forced outage condition ("Declared Suspension of Energy Deliveries"). The Seller's
17
Declared Suspension of Energy Deliveries will begin at the star of the next full hour
following the Seller's notification as specified in Section 6.4.2 and will continue for the
time as specified (not less than 48 hours) in the written notification provided by the
Seller. In the month(s) in which the Declared Suspension of Energy occured, the
Scheduled Monthly Energy Delivery will be adjusted as specified in Section 4.3.
6.4.2 If the Seller desires to initiate a Declared Suspension of Energy
Deliveries as provided in Section 6.4.1, the Seller will notify PacifiCorp's generation
coordination desk, bye-mail to wscdmpacificorp.com, by telephone [phone]), or
by fax [phone]), of Seller's unscheduled outage. Seller shall tae all reasonable
measures and exercise its best efforts to avoid unscheduled maintenance, to limit the
duration of such unscheduled maintenance, and to perform unscheduled maintenance
during Off-Peak Hours. The beginnng hour of the Declared Suspension of Energy
Deliveries will be at the earliest the next full hour after makng contact with PacifiCorp.
The Seller wil, within 24 hours after the telephone contact, provide PacifiCorp a written
notice in accordance with Section 21 declarng the beginnng hour and duration of the
Declared Suspension of Energy Deliveries and a description of the conditions that caused
the Seller to initiate a Declared Suspension of Energy Deliveries. PacifiCorp will review
the documentation provided by the Seller to determine PacifiCorp's acceptace of the
described forced outage as qualifying for a Declared Suspension of Energy Deliveries as
specified in paragraph 6.4.1. PacifiCorp's acceptance of the Seller's forced outage as an
acceptable forced outage will be based upon the clear documentation provided by the
Seller that the forced outage is not due to an event of Force Majeure or by neglect,
disrepair or lack of adequate preventative maintenance of the Seller's Facility. Seller
agrees to retain all performance related data for the Facility for a minimum of thee years,
and to cooperate with PacifiCorp in the event PacifiCorp decides to audit Seller's
reporting of Facility Net Output and Adjusted Scheduled Monthly Energy Delivery.
SECTION 7: MOTIVE FORCE
Prior to the Effective Date of this Agreement, Seller provided to PacifiCorp an engineering
report, for Seller's Upper Facility and Seller's Lower Facility demonstrating to PacifiCorp's
reasonable satisfaction: (1) the feasibilty that Facilitythe combined Net Energy delivery of the
Lower Facility and Upper Facilty will equal or exceed 4,696,2986.400,535 kWh in each ful
calendar year for the full term of this Agreement; and (2) the likelihood that the Facility, under
average design conditions, will generate at no more than 10 aMW in any calendar month
("Motive Force Plan") acceptable to PacifiCorp in its reasonable discretion and attched hereto
as Exhibit F-l, together with a certification from a Licensed Professional Engineer attached
hereto as Exhibit F-2, certifying to PacifiCorp that the Facility can reasonably be expected to
perform as predicted in the Motive Force Plan for the duration of this Agreement.
SECTION 8: METERING AT THE POINT OF INTERCONNECTION
8.1 Metering shall be performed at the location and in a maner consistent with ths
Agreement, as specified in Exhibit B. Seller shall provide to PacifiCorp metered Facilty Net
Output in hourly increments, and any other energy measurements required to administer this
18
Agreement. If the Transmitting Entity(s) requires Seller to telemeter data, PacifiCorp shall be
entitled to receive the same data Seller provides to the Transmitting Entity, if such data is useful
to PacifiCorp's administration of this Agreement. Seller's metered output shall be adjusted to
account for electrical losses, if any, between the point of meteringw and the Point of
Interconnectionw ("adjusted metered output"). The loss adjustment shall be 2% of the kWh
energy production recorded on the Facility output meter until actually measured and confirmed
in letter agreement between the Paries. Subject to other provisions applicable to Net Output in
ths Agreement (e.g., disallowance of Inadvertent Energy), PacifiCorp shall subtract Seller's
station service load from Seller's adjusted metered output to determine Net Output.
8.2 Seller shall pay for the installation, testing, and maintenance of any metering
required by Section 8.1, and shall provide reasonable access to such meters. PacifiCorp shall
have reasonable access to inspection, testing, repair and replacement of the metering equipment.
If any of the inspections or tests discloses a measurement error exceeding two percent (2%),
either fast or slow, proper correction, based upon the inaccuracy found, shall be made of
previous readings for the actul period durng which the metering equipment rendered inaccurate
measurements. Any correction in bilings or payments resulting from a correction in the meter
records shall be made in the next monthly biling or payment rendered following the repair of the
meter, or during the shortest reasonable period.
SECTION 9: BILLINGS, COMPUTATIONS AND PAYMENTS
9.1 On or before the thirtieth (30th) day following the end of each Biling Period,
PacifiCorp shall send to Seller payment for Seller's deliveries of Net Output to PacifiCorp,
together with computations supporting such payment. PacifiCorp may offset any such payment
to reflect amounts owing from Seller to PacifiCorp pursuant to this Agreement and any other
agreement( s) between the Paries.
9.2 Any amounts owing after the due date thereof shall bear interest at the Prime Rate
plus two percent (2%) from the date due until paid; provided, however, that the interest rate shall
at no time exceed the maximum rate allowed by applicable law.
SECTION 10: DEFAULTS AND REMEDIES
10.1 The following events shall constitute defaults under this Agreement:
10.1.1 Seller's failure to make a payment when due under ths Agreement,
or maintain insurance in conformance with the requirements of Section 12 of this
Agreement, if the failure is not cured within ten (10) days after the non-defaulting Pary
gives the defaulting Pary a notice of the default.
10.1.2 Breach by a Pary of a representation or waranty set forth in this
Agreement, if such failure or breach is not cured within thrty (30) days following wrtten
notice.
10.1.3 Seller's failure to cure any default under any commercial or
financing agreements or instrent (including the Facility's generation interconnection
19
agreement, if applicable) within the time allowed for a cure under such agreement or
instrent.
10.1.4 A Pary (a) makes an assignment for the benefit of its creditors; (b)
fies a petition or otherwise commences, authorizes or acquiesces in the commencement
of a proceeding or cause of action under any banptcy or similar law for the protection
of creditors, or has such a petition filed agaist it and such petition is not withdrawn or
dismissed within sixty (60) days after such filing; (c) becomes insolvent; or (d) is unable
to pay its debts when due.
10.1.5 A Material Adverse Change has occured with respect to Seller and
Seller fails to provide such performance assurances as are reasonably requested by
PacifiCorp, within fifteen (15) days from the date of such request.
10.1.6 Failure to maintain Delay Security in accordance with Section 2.3.1
until properly termnated in accordance with Section 2.3.4.
10.1.7 A Pary otherwse fails to perform any material obligation (including
but not limited to failure by Seller to meet any deadline set fort in Section 2.2) imposed
upon that Pary by this Agreement if the failure is not cured withn thirt (30) days after
the non-defaulting Par gives the defaulting Pary notice of the default; provided,
however, that, upon wrtten notice from the defaulting Pary, this thrty (30) day period
shall be extended by an additional ninety (90) days if (a) the failure canot reasonably be
cured withn the thirty (30) day period despite dilgent efforts, (b) the default is capable
of being cured within the additional ninety (90) day period, and (c) the defaulting Par
commences the cure within the original thirt (30) day period and is at all times thereafter
dilgently and continuously proceeding to cure the failure.
10.2 In the event of any default hereunder, the non-defaulting Pary must notify the
defaulting Par in writing of the circumstances indicating the default and outlining the
requirements to cure the default. If the default has not been cured within the prescribed time,
above, the non-defaulting Pary may terminate this Agreement at its sole discretion by delivering
written notice to the other Pary and may pursue any and all legal or equitable remedies provided
by law or pursuant to this Agreement. The rights provided in this Section 10 are cumulative such
that the exercise of one or more rights shall not constitute a waiver of any other rights.
10.3 In the event this Agreement is terminated because of Seller's default and Seller
wishes to again sell Net Output from the facility using the same motive force to PacifiCorp
following such termination, PacifiCorp in its sole discretion may require that Seller do so subject
to the terms of this Agreement, including but not limited to the purchase prices as set fort in
(Section 5), until the Expiration Date (as set forth in Section 2.1). At such time Seller and
PacifiCorp agree to execute a written document ratifying the terms of this Agreement.
10.4 If this Agreement is terminated as a result of Seller's default, Seller shall pay
PacifiCorp for the energy and associated capacity that Seller was scheduled to provide for a
period of twelve (12) months ("Replacement Period") from the date of termination plus the
estimated administrative cost to acquire the replacement power ("Net Replacement Power
20
Costs"). Net Replacement Power Costs equals the sum of the Replacement Price times the
Replacement Volume for each day of the Replacement Period, plus the estimated administrative
cost to the utility to acquire replacement power.
Where:
"Replacement Price" equals the positive difference, if any, of the Index Price minus the
weighted average of the On-Peak and Off-Peak Conforming Energy Prices; and
"Replacement Volume" equals the applicable Scheduled Monthy Energy Delivery
divided by the number of days in that month.
10.5 Upon an event of default or termination event resulting from default under this
Agreement, in addition to and not in limitation of any other right or remedy under this
Agreement or applicable law (including any right to set-off, counterclaim, or otherwse withhold
payment), the non-defaulting Par may at its option set-off, against any amounts owed to the
defaulting Par, any amounts owed by the defaulting Pary under any contract(s) or
agreement(s) between the Paries. The obligations of the Paries shall be deemed satisfied and
discharged to the extent of any such set-off. The non-defaulting Pary shall give the defaulting
Par written notice of any set-off, but failure to give such notice shall not affect the validity of
the set-off.
10.6 Amounts owed by Seller pursuant to ths paragraph shall be due within five (5)
business days after any invoice from PacifiCorp for the same.
SECTION 11: INDEMNIFICATION
11.1 Indemnties.
11.1.1 Indemnty by Seller. Seller shall release, indemnfy and hold
harless PacifiCorp, its directors, offcers, agents, and representatives against and from
any and all loss, fines, penalties, claims, actions or suits, including costs and attorney's
fees, both at trial and on appeal, resulting from, or arising out of or in any way connected
with (a) the energy delivered by Seller under this Agreement to and at the Point of
Delivery, (b) any facilties on Seller's side of the Point of Delivery, (c) Seller's operation
and/or maintenance of the Facility, or (d) arsing from this Agreement, including without
limitation any loss, claim, action or suit, for or on account of injur, bodily or otherwise,
to, or death of, persons, or for damage to, or destrction or economic loss of property
belonging to PacifiCorp, Seller or others, excepting only such loss, claim, action or suit
as may be caused solely by the fault or gross negligence of PacifiCorp, its directors,
offcers, employees, agents or representatives.
11.1.2 Indemnity by PacifiCorp. PacifiCorp shall release, indemnfy and
hold harless Seller, its directors, officers, agents, Lenders and representatives against
and from any and all loss, fines, penalties, claims, actions or suits, including costs and
attorney's fees, both at trial and on appeal, resulting from, or arsing out of or in any way
connected with the energy delivered by Seller under this Agreement after the Point of
Delivery, including without limitation any loss, claim, action or suit, for or on account of
21
injur, bodily or otherwise, to, or death of, persons, or for damage to, or destrction or
economic loss of propert, excepting only such loss, claim, action or suit as may be
caused solely by the fault or gross negligence of Seller, its directors, offcers, employees,
agents, Lenders or representatives.
11.2 No Dedication. Nothng in this Agreement shall be constred to create any duty
to, any standard of care with reference to, or any liabilty to any person not a Pary to this
Agreement. No undertng by one Pary to the other under any provision of ths Agreement
shall constitute the dedication of that Pary's system or any portion thereof to the other Pary or
to the public, nor affect the status of PacifiCorp as an independent public utilty corporation or
Seller as an independent individual or entity.
11.3 CONSEQUENTIAL DAMAGES. EXCEPT TO THE EXTENT SUCH
DAMGES AR INCLUDED IN THE LIQUIDATED DAMAGES, DELA Y DAMGES, OR
OTHER SPECIFIED MEASURE OF DAMAGES EXPRESSL Y PROVIDED FOR IN THIS
AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR
SPECIAL, PUNITIVE, INDIRECT, EXEMPLARY OR CONSEQUENTIAL DAMAGES,
WHETHER SUCH DAMGES AR ALLOWED OR PROVIDED BY CONTRACT, TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY, STATUTE OR OTHERWISE.
SECTION 12: LIABILITY AND INSURACE
12.1 Certificates. Seller shall provide PacifiCorp insurance certificate(s) (of "ACORD
Form" or the equivalent) certifying Seller's compliance with the insurance requirements
hereunder. Commercial General Liabilty coverage written on a "claims-made" basis, if any,
shall be specifically identified on the certificate. If requested by PacifiCorp, a copy of each
insurance policy, certified as a tre copy by an authorized representative of the issuing insurance
company, shall be fuished to PacifiCorp.
12.2 Requied Policies and Coverages. Without limiting any liabilties or any other
obligations of Seller under this Agreement, from the commencement of interconnection with
PacifiCorp's electric transmission system until the Termination Date of this Agreement, at its
own expense, Seller shall secure and continuously car, with an insurance company or
companies rated not lower than "A- or better" by the A.M. Best Company, the insurance
coverage specified below:
12.2.1 Worker's Compensation insurance which complies with the laws of
the state within which the Facility is located;
12.2.2 Commercial General Liabilty insurance with bodily injur and
propert damage combined single limits of at least $1,000,000 per occurence. Seller
shall maintain the policy in accordance with terms available in the insurance market for
simlar electric generating facilities. Such insurance shall include, but not necessarly be
limited to, specific coverage for contractual liabilty encompassing the indemnfication
provisions in this Agreement, broad form propert damage liabilty, personal injur
liabilty, explosion and collapse hazard coverage, products/completed operations liability,
and, where applicable, watercraf protection and indemnity liability;
22
12.2.3 All Risk Insurance. The policy shall provide coverage in an amount
equal to not less than 80% of the curent replacement in kind of the Facility for "all risks"
of physical loss or damage except as hereinafter provided, including coverage for boiler
and machinery, transit and off-site storage accident exposure, but excluding the
equipment owned or leased by Operator and its subcontractors and their personal
property. The policy may contan separate sub-limits and deductibles subject to
insurance company underwiting guidelines. Seller shall maintain the policy in
accordance with terms available in the insurance market for similar electric generating
facilities. The policy shall include coverage for business interrption in an amount
covering a period of indemnity equal to twelve (12) months. Additional coverages to be
included are:
(a) Catastrophic Perils Insurance not less than 80% of the curent
replacement cost of plant, building, and/or equipment.
12.3 Insurance Strcture. Seller may satisfy the amounts of insurance required above by
purchasing primar coverage in the amounts specified or by buying a separate excess Umbrella
Liabilty policy together with lower limit primar underlying coverage. The strctue of the
coverage is at Seller's option, as long as the total amount of insurance meets the above
requirements.
12.4 Occurence-Based Coverage. The coverage required above, and any umbrella or
excess coverage, shall be "occurence" form policies. In the event that any policy is written on a
"claims-made" basis and such policy is not renewed or the retroactive date of such policy is to be
changed, the first insured Pary shall obtain or cause to be obtaned for each such policy or
policies the broadest basic and supplemental extended reporting period coverage or "tail"
reasonably available in the commercial insurance market for each such policy or policies and
shall provide the other Pary with proof that such basic and supplementa extended reporting
period coverage or "tail" has been obtaned.
12.5 Endorsement Items. Seller shall immediately cause its insurers to amend its
Commercial General Liabilty and Umbrella or Excess Liability policies with all of the following
endorsement items, and to amend its Worker's Compensation policy with the endorsement items
set forth in Paragraphs 12.5.3 and 12.5.4 below:
12.5.1 PacifiCorp and its Affliates, their respective directors, officers,
employees, and agents as an additional insured under this policy and to the maximum
extent allowed by law, shall be provided with coverage at least as broad as those required
of the Seller by this Agreement;
23
12.5.2 This insurance is primar with respect to the interest of PacifiCorp
and its Affiliates and their respective directors, officers, employees, and agents;
12.5.3 Insurer hereby waives all rights of subrogation against PacifiCorp,
its Affliates, offcers, directors, employees and agents;
12.5.4 Notwthstanding any provision of the policy, this policy may not be
canceled, non-renewed or materially changed by the insurer without giving ten (10) days'
prior written notice to PacifiCorp; and
12.5.5 Cross liabilty coverage so that the insurance applies separately to
each insured against whom claim is made or suit is brought, even in instaces where one
insured claims against or sues another insured.
12.6 Periodic Review. PacifiCorp may review this schedule of required insurance as
often as once every two (2) years. PacifiCorp may, in its discretion and if allowed by the
Commission, require the Seller to make changes to the policies and coverages described in this
Exhibit to the extent reasonably necessar to cause such policies and coverages to conform to the
insurance policies and coverages typically obtained or required for power generation facilties
comparable to the Facility at the time PacifiCorp's review takes place. In addition, Seller shall
have the right, subject to PacifiCorp's consent, to make changes in the coverages and limits of
the Builder's All-Risk Insurance and the All-Risk Insurance required under this Section, to the
extent the coverages and limits specified herein are not reasonably available at commercially
reasonable rates.
SECTION 13: FORCE MAJEURE
13.1 As used in this Agreement, "Force Majeure" or "an event of Force Majeure"
means any cause beyond the reasonable control of the Seller or ofPacifiCorp which, despite the
exercise of due dilgence, such Pary is unable to prevent or overcome. By way of example,
Force Majeure may include but is not limited to acts of God, flood, storms, wars, hostilties, civil
strife, strikes, and other labor distubances, earhquakes, fires, lightning, epidemics, sabotage,
restraint by cour order or other delay or failure in the performance as a result of any action or
inaction on behalf of a public authority which is in each case (i) beyond the reasonable control of
such Par, (ii) by the exercise of reasonable foresight such Pary could not reasonably have been
expected to avoid and (iii) by the exercise of due diligence, such Pary shall be unable to prevent
or overcome. Force Majeure, however, specifically excludes the cost or availability of fuel or
motive force to operate the Facility or changes in market conditions that affect the price of
energy or transmission. If either Pary is rendered wholly or in par unable to perform its
obligation under ths Agreement because of an event of Force Majeure, both Paries shall be
excused from whatever performance is affected by the event of Force Majeure, provided that:
13.1.1 the non-performing Pary, shall, withn two (2) weeks afer the
occurence of the Force Majeure, give the other Pary written notice describing the
pariculars of the occurence, including the sta date of the Force Majeure, the cause of
24
Force Majeure, whether the Facilty remains partially operational and the expected end
date of the Force Majeure;
13.1.2 the suspension of performance shall be of no greater scope and of no
longer duration than is required by the Force Majeure;
13.1.3
to perform; and
the non-performing Par uses its best efforts to remedy its inabilty
13.1.4 the non-performing Pary shall provide prompt written notice to the
other Pary at the end of the Force Majeure event detailing the end date, cause there of,
damage caused there by and any repairs that were required as a result of the Force
Majeure event, and the end date of the Force Majeure.
13.2 No obligations of either Par which arose before the Force Majeure causing the
suspension of performance shall be excused as a result of the Force Majeure.
13.3 Neither Pary shall be required to settle any strke, walkout, lockout or other labor
dispute on terms which, in the sole judgment of the Par involved in the dispute, are contrar to
the Pary's best interests.
SECTION 14: SEVERA OBLIGATIONS
Nothng contaned in this Agreement shall ever be constred to create an association, trst,
parnership or joint ventue or to impose a trust or parnership duty, obligation or liabilty
between the Paries. If Seller includes two or more paries, each such par shall be jointly and
severally liable for Seller's obligations under ths Agreement.
SECTION 15: CHOICE OF LAW
This Agreement shall be interpreted and enforced in accordance with the laws of the state of
Idaho, excluding any choice of law rules which may direct the application of the laws of another
jursdiction.
SECTION 16: PARTIA INVALIDITY
It is not the intention of the Paries to violate any laws governing the subject matter of this
Agreement. If any of the terms of the Agreement are finally held or determined to be invalid,
ilegal or void as being contrar to any applicable law or public policy, all other terms of the
Agreement shall remain in effect. If any terms are finally held or determined to be invalid,
ilegal or void, the Paries shall enter into negotiations concerning the terms affected by such
decision for the purose of achieving conformity with requirements of any applicable law and
the intent of the Paries to this Agreement.
25
SECTION 17: WAIVER
Any waiver at any time by either Pary of its rights with respect to a default under this
Agreement or with respect to any other matters arising in connection with this Agreement must
be in wrting, and such waiver shall not be deemed a waiver with respect to any subsequent
default or other matter.
SECTION 18: GOVERNMENTAL JURISDICTION AND AUTHORIZATIONS
This Agreement is subject to the jursdiction of those governental agencies having control over
either Pary or ths Agreement. PacifiCorp's compliance with the terms of this Agreement is
conditioned on Seller's submission to PacifiCorp prior to the Commercial Operation Date and
maintaining thereafter copies of all local, state and federal licenses, permts and other approvals
as then may be required by law for the construction, operation and maintenance of the Facilty.
SECTION 19: SUCCESSORS AND ASSIGNS
Ths Agreement and all of the terms and provisions hereof shall be binding upon and inure to the
benefit of the respective successors and assigns of the Paries hereto, except that no assignent
hereof by either Pary shall become effective without the wrtten consent of both Paries being
first obtaned. Such consent shall not be uneasonably withheld. Notwithstanding the foregoing,
any entity with which PacifCorp may consolidate, or into which it may merge, or to which it
may conveyor transfer substatially all of its electric utility assets, shall automatically, without
fuer act, and without need of consent or approval by the Seller, succeed to all of PacifiCorp's
rights, obligations, and interests under this Agreement. This aricle shall not prevent a financing
entity with recorded or secured rights from exercising all rights and remedies available to it
under law or contract. PacifiCorp shall have the right to be notified by the financing entity that it
is exercising such rights or remedies.
SECTION 20: ENTIRE AGREEMENT
20.1 This Agreement supersedes all prior agreements, proposals, representations,
negotiations, discussions or letters, whether oral or in wrting, regarding PacifiCorp's purchase of
Net Output from the Facilty. No modification of this Agreement shall be effective unless it is in
writing and signed by both Paries.
20.2 By executing ths Agreement, each Pary releases the other from any claims,
known or unown, that may have arisen prior to the Effective Date with respect to the Facilty
and any predecessor facilty proposed to have been constrcted on the site of the Facility.
SECTION 21: NOTICES
21.1 All notices except as otherwse provided in this Agreement shall be in wrting,
shall be directed as follows and shall be considered delivered if delivered in person or when
deposited in the U.S. Mail, postage prepaid by certified or registered mail and retu receipt
requested
26
Notices
All Notices
All Invoices:
Scheduling:
Payments:
Wire Transfer:
Credit and
Collections:
With Additional
Notices of an
Event of Default
or Potential
Event of Default
to:
PacifCorp
PacifiCorp
825 NE Multnomah Street Portland,
OR 97232
Attn: Contract Administration,
Suite 600
Phone: (503) 813 - ~5218
Facsimile: (503) 813 - 6291
Duns: 00-790-9013
Federal Tax ID Number: 93-0246090
Attn: Back Offce, Suite 700
Phone: (503) 813 - 5578
Facsimile: (503) 813 - 5580
Attn: Resource Planng, Suite 600
Phone: (503) 813 - 6090
Facsimile: (503) 813 - 6265
Att: Back Offce, Suite 700
Phone: (503) 813 - 5578
Facsimile: (503) 813 - 5580
Ban One N.A.
To be provided in separate letter from
PacifiCorp to Seller
Att: Credit Manager, Suite 1900
Phone: (503) 813 - 5684
Facsimile: [phone]
Att: PacifiCorp General Counsel
Phone: [phone]
Facsimile: [phone]
Seller
Lower Valley Energy, Inc.
PO Box 188
Afton, Wyoming 8311 0
Attention Rick KnoriJim
Webb,CEO
Director of Engineering
Phone [phone]-3175
Facsimile: (307) 739 1610885-5787
Attention GayLyn Turer
Phone [phone]
Facsimle: [phone]
Attention Rick Knori
Phone: [phone]
Facsimile: [phone]
Attention GayLyn Turer
Phone [phone]
Facsimile: [phone]
To be provided in separate letter
from Lower Valley Energy to Buyer
Attention GayLyn Turer
Phone [phone]
Facsimile: [phone]
James Webb, General ManagerCEO
Lower Valley Energy, Inc.
Phone [phone]
Facsimile: [phone]
The Paries may change the person to whom such notices are addressed, or their addresses, by
providing written notices thereof in accordance with ths Subsection.
27
IN WITNESS WHEREOF, the Paries hereto have caused this Agreement to be executed
in their respective names as of the date first above wrtten.
PacifiCorp Seller
By:By:
Name: Bruce Grswold
Title: Director Short Term Origination
and QF Contracts
Name: James R. Webb
Title: President! GFCEO
28
EXHIBIT A
DESCRIPTION OF SELLER'S FACILITY
(Seller to Complete)
Seller's Facility consists of two QFs, designated FacilitYoower) and Facilityl. in this
Agreement. Together, the Facility is described as:
Facilty Capacity Rating: 1,475 kW.
Identify the Maximum Facility Delivery Rate (the sum of the Maximum Facility Delivery
Rateoower) and Maximum Facility Delivery Ratel.~
Maximum Facilty Delivery Rate: 1,537 kW.
A-I
EXHIBIT A - Lower
DESCRIPTION OF SELLER'S F ACILITY(LOWER)
(Seller to Complete)
Seller's Facility consists of one generator manufactued by Ma-ell
Motori Emerson Motor Company. More specifically, each generator at the
Facilty is described as:
Type (synchronous or inductive): SL Induction Generator
Model: C4CSOO LC iONameplate Part No.: 370780-000
Number of Phases: 3
Rated Output (kW): 94597 Rated Output (kVA): 746
Rated Voltage (line to line): 480
Rated Current (A): Stator: .l935 A; Rotor: Induction .l935 A
Maximum kW Output: 94597 kW Maximum kV A Output: 98746 kVA
Minimum kW Output: 0 kW
Manufacturer's Guaranteed Cut-in Wind Speed (if applicable):N/A
Facilty Capacity Rating: 94535 kW at Hz 60 A
H6935
Identify the maximum output of the generator(s) and describe any differences between that
output and the Nameplate Capacity Rating:
Station service requirements, and other loads served by the Facilty, if any, are described
as follows: Station service loads are metered and connected on a separate service and meter from
the 12.47 kv distribution system through a 120/240 single phase service. Station Service loads
are estimated to be 12,000 KWH per year
Location of the Facilty: The Facility is located in Lincoln County, W Wyoming. The location
is more paricularly described as follows:
The project is located on Swift Creek, in Lincoln County, Wyoming, partially within the
Bridger-Teton National Forest at approximately 42°43' 42.3531" Nand 110°55' 00.70858" W.
(legal description of parcell
Power factor requirements:
Rated Power Factor (PF) or reactive load (kVAR): PF = .81
A-(lower)-l
EXHIBIT A - Upper
DESCRIPTION OF SELLER'S FACILITY(UPPER)
(Seller to Complete)
Seller's Facility~ consists of one generator manufactured by Marelli
Motori . More specifically, each generator at the Facility~ is described
as:
Type (synchronous or inductive): S 1 Induction Generator
Model: C4G500 LC 10
Number of Phases: 3
Rated Output (kID: 940 Rated Output (kV A):
Rated Voltage (lne to line):
Rated Current (A): Stator: i i 3 i A; Rotor: Induction 1131 A
Maximum kW Output: 940 kW Maximum kVA Output: 986 kVA
Minimum kW Output: 0 kW
Manufacturer's Guaranteed Cut-in Wind Speed (if applicable\;
Facilty Capacity Ratinglupper): 940 kW at Hz 60 A
1360
Identify the Maximum Facility Delivery Rate~ and describe any differences between that
output and the Facility Capacity Rating~~
Station service requirements. and other loads served by the Faciltylupperh if any. are
described as follows: Station service loads are metered and connected on a separate service and
meter from the 12.47 kv distribution system through a 120/240 single phase service.
Location of the Faciltylupper): The Facility~ is located in Lincoln County, W Wyoming.
The location is more particularly described as follows:
The project is located on Swift Creek, in Lincoln County, Wyoming, parially withn the
Bridger-Teton National Forest at approximately 42°43' N and i 10°54' W.
Power factor requirements:
Rated Power Factor (PF) or reactive load (kV AR): PF = .83
A-(upper)-l
EXHIBITB
SELLER'S INTERCONNECTION FACILITIES
(Seller to provide its own diagram and description)
POINT OF DELIVERY / SELLER'S INTERCONNECTION FACILITIES
Instructions to Seller:
1. Describe the point(s) of metering, including the tye ofmeter(s), and the owner of the
meter(st,
2. Provide single line diagræn ofl.in..Jaciltyoower) and FacilityÍ!~
The Lower Swift Creek Facility and the Upper Swift Creek Facility are metered
separately. The point of metering at each Facility is in the secondar
comparment ofthe 277/480 step up transformers. The Lower Swift Creek
Facility is a 750 kva transformer, The Upper Swift Creek Facility is a 1500 kva
transformer. The metering is done by 500-5 CT's and a Gemstar JEM10 meter.
The meters are owned by Bonnevile Power Adminstration.
2. Provide single line diagrams of FacilitYoower) and FacilityÍ! including station use
meter, Facility output meter(s), Interconnection Facilties, PePoints ofInterconnection,
~
One-Line diagram of facility was provided on April 15, 2009, seeline diagrams of
FacilitYoowerl and FacilityÍ! are attched document. For both, the Point of
Interconnection is the 12.47 kV side of the step-up transformer.
3. Specify the Point of Delivery, and any transmission facilities on Seller's side of the Point
of Delivery used to deliver Net Output.
~ The power will be delivered from the Lower Valley Energy distribution
system to BP A. BP A will deliver the power to PacifiCorp at the Goshen
Substation. See attached one-line diagram.
B-1
EXHBITC
REQUIRED FACILITY DOCUMENTS
REQUIRED OF ALL FACILITIES:
QF CertificationCertifications: FacilitYciower): OF 10-157-000 and FacilityÛ!~ QF 08-
641-000
Generation Interconnection Agreement Not applicable
Fuel Supply Agreement, if applicable N/ A
BPA point-to-point transmission service agreement
The following Documents are required to complete this project:
Easements:
Permits:
C-1
EXHIBITD
ENERGY DELIVERY SCHEDULE
Lower Swift Creek Hydro
!1Swift Creek Hydro
(" FaciltYupper::
0.940MW Namenlate Canacitv
("FaciltY1ower::
.535 MW Namenlate Canacitv
0.940MVV Nameplate
- _, FaciltYTotal
Ba Scheduled Monthly Energy Monthly NET Capacity
Estimates (1,11\~.. \lwe MW/mo ~
I~~.,~~,193,440 ~~
C~""r..~~,147,840 ~n%Ma 163,680 ~n%
Aß 282,939 Q,~
Ma 562,150 Q.ßQJt671,287 Q,W%Jl 677,951 ~97
1\. .... ...+550,511 (h +9
September 382,459 ~á+
October 374,729 Q.á4
November 300,058 ~44
December 223,200 ~~
TOTAL:4,530,244 ~á5
I January
I February
I March
I April
I May
I June
I July
I August
~eptember
I October
November
lDecember
TOTAL:
SMED:
ScheduledMonthly A vg. Monthly Monthly A vg. Monthly Monthly A vg.Energy Delivery Capacity Energy Deliver Capacity Energy Deliver
Delivery Rate Factor Delivery y Rate Factor Delivery y Rate~ il (% ~ (MW) (% (kWh) (MW)
........!~3 t~40 "'_"_ "".....:~.?...... ........?.s~o." ........ .........JQ~.??.?.~....._...._ .......:!.~ ......... ...........?_?~" ....". ".."......~.~?.?..U.~..."......... ..........9..:~9__..
h.!_~?"&~9"""...."..:~.?.. .."." ...... 23 %.........._..~~il??._."".._ ...".:g ......... ..........22%..... .............?.~ 0,2 l§.... ....". ..........Q.:.~.~...""..
..........)..?~..?.SQ.......... ......_....Q:..??........... ...........?.~.~........... ............s???...~Z_.".................:..!.~........... ..?~~o........... ...........??....& 1 7.. ....... ........Q.:.~.~..........
..........?s.~.?~~9........ ...........Q:l.?"__.. __ ..~.~~............. ......J~.11.??.?............. .. ......:.!.!... ....... ...............~.~~......................Q~.??.Q.L............. f-....Q:.??........
..........~??.?.s.~.?............ ..... ......:.?~.............. ..........." ~.sr.o................ ..............~.?..!.?..?..?.) .. ......._:..l?........_.. ...._..2.~............ ........?~2.?~?.S.............. ........)..:Q..!........
_........??Q.?.?.2.~.......... ............9.:.?.?............... ...........s..~~o............ . ..............~..???..?.!~ ..._......:..~Q............. ..__..?..~........... 933,511 i .30
...........???.?.~.?...s............ ..............:.7.7.............. .............s~~..._... .............~..+?' 058 .... ...........:.+7..... ...... ....S.S!o............. ............9il.3i'ti:::::::::::::::: :::::::::::::::~'4"''':~::
.........50 ,511 f-......:?.~. ....... ............?.2~.. .......... ....... 237 i-!??....._....... ........ ..:~~ ........ ...........?Q~o.... ... ...............7S7,~l.?............... ...........!..:Q.?........
........~..S.~?~?.2............. ......._......:.?~................ .............?.7.~........... ........J....?.: 0_~..9 ._.......:.~~... ..... ...........+.!.~. ...... ...........?? 7 ,489 m... ..........Q.:.??...........
..........~.?~.??.~2.......... ...............9~?.Q......._ ...............?+~0i........... ..........).~ ??.?..7~.............. ..............:.~.Q.....................~.7.~........... ..... ...?~+.?Q.Q.~.......... ......_9.:.79.. .....
..............~.QQ.?.Q?...s...... .. ..........Q.:.~2................ ........~..~~. .................!.?.??..?.S.5......... ...... .1 L... .. _.........?~.~............. ............ 4.??..S+?................. ..........9.:.??............223,200 0.30 32% 113,611 .15 28% 336,811 0.45
4.243.534 0.52 55% 2157.000 0.26 49% 6.400.535 0.76
D-1
Scheduled Maitenance - Seller will provide a suggested maintenance schedule anualy.
D-2
EXHIBITE
START-UP TESTING
Required factory testing includes such checks and tests necessar to determine that the
equipment systems and subsystems have been properly manufactured and installed, fuction
properly, and are in a condition to permit safe and efficient sta-up of the Facilty, which may
include but are not limited to:
1. Test of mechanical and electrcal equipment;
2. Calibration of all monitoring instrments;
3. Operating tests of all valves, operators, motor staers and motor;
4. Alars, signals, and fail-safe or system shutdown control tests;
5. Point-to-point continuity tests;
6. Bench tests of protective devices; and
7. Tests required by manufacturer of equipment
Required sta-up tests are those checks and tests necessar to determine that all features
and equipment, systems, and subsystems have been properly installed and adjusted, fuction
properly, and are capable of operating simultaeously in such condition that the Facilty is
capable of continuous delivery into PacifiCorp's electrical system, which may include but are
not limited to:
1. Turbine/generator mechanical runs and fuctionality;
2. System operation tests;
3. Brake tests;
4. Energization of transformers;
5. Synchronizing tests (manual and auto);
6. Excitation and voltage regulation operation tests;
7. Auto stop/sta sequence;
8. Completion of any state and federal environmental testing requirements.
9. Tests required by manufactuer of equipment;
For wind projects only, the following Wind Turbine Generator Installation Check Lists are
required documents to be signed off by Manufactuer or Subcontract Category Commissioning
Personnel as par of the Commissioning and starup testing:
Turbine Installation
Foundation Inspection
Controller Assembly
Power Cables
Cable Installation Check Lists including: Controller
Top Deck / Yaw Deck
Tower Top Section / Saddle
Mid Section Cables or buss bars
Base Section
Tower Base Section
Tower Lights and Outlets
Tower Mid Section
Tower Top Section
Nacelle
Rotor
E- 1
EXHIBIT F-l
MOTIVE FORCE PLAN
Fl- 1
EXHIBIT F-2
ENGINEER'S CERTIFICATION
(1 ) THAT THE F ACILITY AVERAGE NET ENERGY ESTIMATE is KWH
PER YEAR IN EACH FULL CALENDAR YEAR OF THIS AGREEMENT;
(Engineer's certification)
(2) THAT THE FACILITY, UNDER AVERAGE DESIGN CONDITIONS, LIKELY WILL
GENERATE NO MORE THA 10 aMW IN ANY CALENDAR MONTH.
(Engineer's certification)
F2- 1
EXHIBITG
SAMPLE ENERGY PURCHASE PRICE CALCULATIONS
The following are samples of calculations of energy purchase prices using the formula and tables
in Section 5.1.
The calculation for the purchase price during an On-Peak Hour in May of 2009 is $76.73/MWh
(the 2009 anual rate for Conformng Energy) multiplied by 92% (0.92) (the May On-Peak Hour
multiplier), which equals $70.59/MWh.
Table ~J.: Sample Calculations for Conforming Energy in 2009 (Purchase Price = anual rate *
monthy On-PeakOff-Peak multiplier).
Calculated Calculated
Conforming Purchase Price Purchase Price
Energy for 2009 On-for 2009 Off-
Annual Peak Peak
Rate for On-Peak Conforming Off-Peak Conforming
2009 Hour Energy Hour Energy
Month (perMWh)Multiplier (perMWh)Multiplier (perMWh)
Januar $76.73 103%$79.03 94%$72.13
Februar $76.73 105%$80.57 97%$74.43
March $76.73 95%$72.89 80%$61.38
April $76.73 95%$72.89 76%$58.31
May $76.73 92%$70.59 63%$48.34
June $76.73 94%$72.13 65%$49.87
July $76.73 121%$92.84 92%$70.59
August $76.73 121%$92.84 106%$81.33
September $76.73 109%$83.64 99%$75.96
October $76.73 115%$88.24 105%$80.57
November $76.73 110%$84.40 96%$73.66
December $76.73 129%$98.98 120%$92.08
G-1
EXHBITH
Seller Authorization to Release Generation Data to PacifiCorp
(TO BE REPLACED WITH SEPARTE EXHIBIT H CONTAINING SELLER'S
LETTERHEAD.)
H - i
ADDENDUMW
GENERATION SCHEDULING ADDENDUM
WHEREAS, Seller's Facility will not interconnect directly to PacifiCorp's System;
WHEREAS, Seller and PacifiCorp have not executed, and will not execute, a generation
interconnection agreement in conjunction with the Power Purchase Agreement;
WHEREAS, Seller has elected to exercise its right under PURPA to deliver Net Output
from it's QF Facility to PacifiCorp via one (or more) Transmitting Entities.
WHEREAS, PacifiCorp desires that Seller schedule delivery of Net Output to the Point
of Delivery on a firm, hourly basis;
WHEREAS, PacifiCorp does not intend to buy, and Seller does not intend to deliver,
more or less than Net Output from the Facility (except as expressly provided, below);
THEREFORE, Seller and PacifiCorp do hereby agree to the following, which shall
become par of their Power Purchase Agreement:
DEFINITIONS
The meanng of the terms defined in the Power Purchase Agreement ("this Agreement")
and this Addendum W shall apply to ths Addendum:
"Day" means midnight to midnght, prevailng local time at the Point of Delivery, or any
other mutuly agreeable 24-hour period.
"Energy Imbalance Accumulation," or "EIA," means, for a given Settlement Period,
the accumulated difference (beginning at zero (0) at the sta of each Settlement Period) between
Seller's Net Output and the energy actually delivered at the Point of Delivery. Each Settlement
Period contais two independent EIAs, one for On-Peak Hours and one for Off-Peak Hours. A
positive accumulated difference indicates Seller's delivery of Surlus Delivery.
"Firm Delivery" means unnterrptible transmission service that is reserved and/or
scheduled between the P-Points of Interconnection and the Point of Delivery pursuat to
Seller's Transmission Agreement(s).
"Settlement Period" means one month unless changed pursuat to Section 9 of this
Addendum.
"Supplemented Output" means any increment of scheduled hourly energy or capacity
delivered to the Point of Delivery in excess of the Facility's Net Output during that same hour.
"Surplus Delivery" means any energy delivered to the Point of Delivery by the Facility
in excess of hourly Net Output that is not offset by the delivery of energy to the Point of
Delivery in deficit of hourly Net Output durng the Settlement Period. PacifiCorp shall accept
Surlus Delivery, but shall not pay for it.
w - i
SELLER'S OBLIGATIONS IN LIEU OF THOSE CONTAINED IN A
GENERATION INTERCONNECTION AGREEMENT.
1. Seller's Responsibilty to Arrange for Delivery of Net Output to Point of
Delivery. Seller shall arange for the Firm Delivery of Net Output to the Point of Delivery.
Seller shall comply with the terms and conditions of the Transmission Agreement(s) between the
Seller and the Transmitting Entity(s). All Net Outut delivered via non firm transmission rights
shall be subject to the payment rate of Non Conforming Energy in provision in Section 5.1 of
this Agreement.
2. Seller's Responsibilty to Schedule Delivery. Seller shall coordinate with the
Transmitting Entity(s) to provide PacifiCorp with a schedule of the next Day's hourly scheduled
Net Output deliveries to the Point of Delivery at least 24 (twenty-four) hours prior to the
beginnng of the day being scheduled, and otherwse in accordance with the WECC
Prescheduling Calendar (which is updated anually and may be downloaded at:
htt://ww.wecc.bi:zl1
3. Seller's Responsibilty to Maintain Interconnection Facilties. PacifiCorp
shall have no obligation to install or maintain any interconnection facilities on Seller's side ofthe
PePoints of Interconnection. PacifiCorp shall not pay any costs arising from Seller
interconnecting its Facility with the Transmitting Entity(s).
4. Seller's Responsibilty to Pay Transmission Costs. Seller shall make all
arangements for, and pay all costs associated with, transmitting Net Output to PacifiCorp,
scheduling energy into the PacifiCorp system and any other costs associated with delivering the
Seller's Net Output to the Point of Delivery.
5. Energy Reserve Requirements. The Transmitting Entity(s) shall provide all
generation reserves as required by the WECC and/or as required by any other governing agency
or industr standard to deliver the Net Energy to the Point of Delivery, at no cost to PacifiCorp.
6. Seller's Responsibilty to Report Net Output. On or before the tenth (10th) day
following the end of each Biling Period, Seller shall send a report documenting hourly station
service, Inadvertent Energy (energy delivered to the Point of Interconnectionw at an average
hourly rate exceeding the Maximum Facilty Delivery Ratew), and Net Output from the Facility
during the previous Biling Period, in columar format substantially similar to the attched
Example 1. Ifrequested, Seller shall provide an electronic copy of the data used to calculate Net
Output, in a standard format specified by PacifiCorp. For each day Seller is late delivering the
certified report, Pacifi Corp. shall be entitled to postpone its payment deadline in Section 9 of this
Agreement by one day. Seller hereby grants PacifiCorp the right to audit its certified reports of
hourly Net Output. In the event of discovery of a biling error resulting in underpayment or
overpayment, the Parties agree to limit recovery to a period of three years from the date of
discovery.
7. Seller's Supplemental Representations and Warranties. In addition to the
Seller's representations and waranties contained in Section 3 of this Agreement, Seller warants
that:
(a) Seller's Supplemented Output, if any, results from Seller's purchase of
some form of energy imbalance ancilar service;
W - 2
(b) The Transmitting Entity(s) requires Seller to procure the service, above, as
a condition of providing transmission service;
(c) The Transmitting Entity(s) requires Seller to schedule deliveries of Net
Output to the Point of Delivery in increments of no less than one (1) megawatt;
(d) Seller is not attempting to sell PacifiCorp energy or capacity in excess of
its Net Output; and
(e) The energy imbalance service, above, is designed to correct a mismatch
between energy scheduled by the QF and the actual real-time production by the QF.
cn Seller shall not schedule delivery to the Point of Delivery at a rate
exceeding the Maximum Facility Delivery Rate rounded up to the nearest whole
megawatt.
8. Seller's Right to Deliver Supplemented Output. In reliance upon Seller's
waranties in Section 7, above, PacifiCorp agrees to accept and pay for Supplemented Output by
treating it as Net Output for those puroses; provided, however, that Seller agrees to achieve an
EIA of zero (0) kilowatt-hours durng On-Peak Hours and an EIA of zero (0) kilowatt-hours
during Off-Peak Hours at the end of each Settlement Period.
(a) Remedy for Seller's Positie Energy Imbalance Accumulations. In the
event Seller does not achieve zero (0) EIA at the end of a Settlement Period, any positive
balance shall be Surlus Delivery and shall not be included in or treated as Net Output.
PacifiCorp will include an accounting of Surlus Delivery in each monthly statement
provided to Seller pursuant to Section 9.1 of this Agreement.
(b) Negative Energy Imbalance Accumulations. A negative EIA at the end
of a Settlement Period (indicating that the Transmitting Entity has delivered less than
Seller's Net Output) wil not result in any corresponding compensation by PacifiCorp.
9. PacifiCorp's Option to Change Settlement Period. In the event PacifiCorp
reasonably determines that doing so likely will have a de minimis net effect upon the cost of
Seller's Net Output to PacifiCorp, it may elect to enlarge the Settlement Period, up to a
maximum of one Contract Year. Conversely, if PacifiCorp reasonably determines, based on the
QF's performance during the curent year, that reducing the Settlement Period likely will
significantly lower the net cost of Seller's Net Output to PacifiCorp, it shall have the right to
shorten Seller's EIA settlement period beginnng the first day of the following Contract Year.
However, in no case shall the Settlement Period be less than one month. If a Settlement Period
does not coincide with a Biling Period, PacifiCorp shall deduct any amount paid for Surlus
Delivery durng that Settlement Period from the Biling Period terminating concurrently or
soonest subsequently to the Settlement Period.
W - 3
Example of Seller's Output Reporting Requirement - Seller would complete one table for
FacilitYoower) and one table for Facility.ú and a table with the summed Net Output.
E FC(=Max (0,
A B (=A-B)D C-D))(C-E)
Meter MeterReadinglj at reading at MaximumPoint of Station Adjusted Facilty Net
Hour Interconnectio Power Gross Delivery Inadvertent OutpuI(
ending nOower)Meteroower)Output(lower)Rateoower)Energyoower)1m
Day (HE)(MWh)* (MWh)(MWh)(MW)(MWh)(MWh)
1 7:00 0.50 0.01 0.49 1.50 0 0.49
1 8:00 0.50 0.02 0.48 1.50 0 0.48
1 9:00 0.50 0.01 0.49 1.50 0 0.49
1 10:00 0.50 0.01 0.49 1.50 0 0.49
1 11:00 0.50 0.01 0.49 1.50 0 0.49
1 12:00 1.60 0.01 1.59 1.50 0.09 1.50
1 13:00 1.70 0.01 1.69 1.50 0.19 1.50
1 14:00 1.60 0.01 1.59 1.50 0.09 1.50
1 15:00 1.50 0.01 1.49 1.50 0 1.49
1 16:00 1.50 0.01 1.50 1.50 0 1.50
1 17:00 1.50 0.00 1.50 1.50 0 1.50
1 18:00 1.50 0.01 1.49 1.50 0 1.49
1 19:00 0.50 0.02 0.48 1.50 0 0.48
1 20:00 0.50 0.01 0.49 1.50 0 0.49
'I Seller shall show adjustment of Meter Reading for losses, if any, between point of meteringw
and the Point of Interconnectionw, in accordance with Section 8.1.
*
Does not apply if Station Service is provided from the gross output of the Facility.
W - 5