20110216Application.pdf

~ROCKY MOUNTAINPORA DI Of PAC
201 Sout Main. Suit 2300
Salt lake City. Uth 84111
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Febru 16,2011
VI OVERNGHT DELIVERY
Idaho Public Service Commssion
472 W. Washigton Street
P.O. Box 83720
Boise, Idaho 83720-0074 PAc- Ë -il-o~
Attntion: Jean D. Jewell
Commssion Secreta
RE: In the Matter of the Application of Rocky Mountain Power for Approval of Power Purchase
Agreement Between Rocky Mountain Power and Cargil, Inc.
Pleas fid enclosed the original and seven (7) copies each of the Application and Power
Purhase Agreement between Rocky Mountain Power under which Cargil would sell and Rocky
Mounta Power would purchae electrc energy generated from Cargill's biogas-fueled digester
generating facilty for the generation of electrc power located near Robert County, Idao, in
Jefferson County with a nameplate capacity ratig of 1,696 kilowatt.
Please contat Danel Solander, Senior Counsel, with any questions [phone].
Sincereeii , "j~1 i,J IJ i ;"1'
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Jlrl; K. trin
Vice President, Reguation
Enclosures
Danel E. Solander
Senior Counsel, Rocky Mounta Power
201 South Main, Suite 2300
Salt take City UT 84111
Telephone: (801) 220 - 4014
FAX: (801) 220 - 3299
Email: DanieL.Solander($PacifiCorp.com
F?f::(~r:f~i
2011 FEB 16 AH 10: /2
Attorney for Rocky Mountan Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMSSION
IN THE MATTR OF THE APPLICATION
FOR APPROV At OF POWER PURCHASE
AGREEMENT BETWEEN PACIFICORP
AND CARGItt, INCORPORATED
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APPLICA nON OF
ROCKY MOUNTAI
POWER
CASE NO. PAC-E-11-08
COMES NOW, PacifiCorp, d//a Rocky Mounta Power ("RM" or the
"Company"), and puruat to RP 52, hereby applies to the Idaho Public Utilties
Commission (the "Commssion") for an order approving the Power Puchae Agreement
between RMP and Cargil, Incorprated, dated Febru 8, 2011 (the "Agreement"). In
support of ths Petition, the Company states as follows:
i. BACKGROUND
RM is an electrcal corporation and public utilty doing business as Rocky
Mounta Power in the state of Idao and is subject to the jursdiction of the Commssion
with regard to its public utilty operations. RM also provides retal electrc service in
the states of Uta, Oregon, Wyoming, Washington, and Californa.
Cargil, Incorporated ("Cargill") intends to own, operate and maintan a biogas-
fueled digester generating facilty for the generation of electrc power located near
Roberts County, Idao, in Jefferson County with a naeplate capacity rating of 1,696
APPtICATION OF ROCKY MOUNTAI POWER - 1
kilowatt (the "Facilty"). The Facilty will be a quaified small power production
facilty under the applicable provisions of the Public Utilties Reguatory Policy Act of
1978 ("PUR A").
II. THE POWER PURCHASE AGREEMENT
1. Under the terms of the Agrment, Cargill elected to contrt with the
Company for an approximate ten-year term expirg Febru 28, 2021. Except as
otherwse provided, RMP will pay Cargil non-Ievelized, non-fueled published avoided
cost rates for capacity and energy adjusted for seasonality and On-PeakOff-Peak Hours
in accordance with Commssion Order Nos. 31025, 30423, and other applicable orders.
The Commssion recently limited the published avoided cost rate eligibilty of wid and
solar QFs to facilties of 100 kW or less in Order No. 32176. As a biogas-fueled digester,
the Facilty is not subject to the 100-kW eligibilty cap.
2. The tota naeplate capaity of ths Facilty is 1,696 kilowatts. As
described in Section 7 of the Agreement, Cargill will be requied to provide data on the
Facilty that RM will use to detee whether under normal and/or average conditions:
(1) the feasibilty that Facilty Net Energy will equal or exceed 9,450,000 kWh in the firs
year of operation and 12,600,000 kWh in subsequent years for the ful term of this
Agrment; and (2) the likelihood that the Facilty, under average design conditions, will
generate at no more than 10 MW in any calendar month. Furer, as described in Section
5.3 and Section 6.6 of the Agreement, should the Facilty exceed 10 average MW on a
monthy basis, RM will accept the energy ("Invertent Energy") that does not exceed
the Maximum GIA Delivery Rate, but will not purchae or pay for this Inadvertent
Energy.
APPLICATION OF ROCKY MOUNTAI POWER - 2
3. Pargraph 2.1 of the Agreement provides that the Agreement will not
become effective until the Commission has approved the Agreement and determined that
the prices to be paid for energy and capacity are just and reasonable, in the public
interest, and that the cost incured by RM for purchaing capaity and energy from
Cargil are legitimate expenses, all of which the Commssion will allow RM to recover
in rates in Idaho in the event other jursdictions deny recovery of their proportionate share
of said expenses.
4. Cargil has elected the day seven days after Commssion approval of the
Agreement as the Commercial Opration Date for this Facilty. Varous requirements
have been placed upon Cargil in order for RM to accept energy deliveres from ths
Facilty. RM will monitor compliance with these initial requirements. In addition,
RMP will monitor the ongoing requirements thoug the ful term of ths Agreement.
Cargil and RM have agred to Delay Liquidated Damages and associated Delay
Securty provisions of $100,097 for the Facilty with retu of the securty as specific
Agreement milestones are met.
5. Cargill has been made aware of and accepted the provisions of the PPA
regarding curilment or disconnection of its Facilty should certai operating conditions
develop on the Company's system. Section 6 of the PPA defies the conditions for
curlment and obligations of Cargill in the event of curlment.
6. All applicable interconnections chages and monthy operation and
maitenance chages under the Generation Interconnection Agreement with RMP
transmission will be assessed to Cargil.
APPLICATION OF ROCKY MOUNTAIN POWER ~ 3
III. COMMICATION
Communcations regarding ths Application should be addressed to:
Ted Weston
201 South Mai, Suite 2300
Salt Lae City, Uta 84111
Telephone: [phone]
Fax: [phone]
Email: ted.weston($pacificorp.com
and to:
Danel E. Solander
201 South Mai, Suite 2300
Salt take City, Uta 84111
Telephone: [phone]
Fax: [phone]
Email: daniel.solander($pacificorp.com
In addition, the Company respectfuly requests that all data request regarding ths
matter be addressed to one or more of the followig:
Bye-mail (preferred)dataequest($pacificorp.com
By reguar mail Data Request Respons Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, OR 97232
CONCLUSION
NOW, THREFORE, based on the foregoing, RM respectfuly requests tht the
Commssion issue its Order:
(1) Approving the Power Purchas Agreement between Cargill and RM
without change or condition; and
(2) Declarng that the prices to be paid for energy and capacity ar just and
reasonable, in the public interest, and that the cost incured by RM for purchasing
APPLICATION OF ROCKY MOUNTAIN POWER - 4
capacity and energy from Cargill are legitimate expenses, all of which the Commission
will allow RM to recover in rates in Idaho in the event other jursdictions deny recovery
of their proportionate shae of sad expenses.
DATED ths 16th day of Febru 2011
Respectfuly submitted,
1"", "7 d ! " .
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Danel E. Solander ..!
Attorney for Rocky Mountai Power ,,'
APPtICATION OF ROCKY MOUNTAI POWER - 5
POWER PURCHASE AGREEMENT
BETWEEN
CARGILL, INCORPORATED
(a new, on-system, non-fueled, non-Ievelized, 90%/110% performance band, Idaho
Qualifyng Facilty-l0aMW/Month or less)
AND
PACIFICORP
Section 1: Definitions..... ................. ................ .................................... ........ ........................1
Section 2: Term, Milestones, Commercial Operation Date..,..............................................9
Section 3: Representations and Waranties .........................................:.............................10
Section 4: Deliver of Energy and Capacity ............................................................;........13
Section 5: Purchase Prices.................................................................................................15
Section 6: Operation and Control ......................................................................................17
Section 7: Motive Force ....................................................................................................20
Section 8:.Metering............................................................................................................21
Section 9: Billngs, Computations and Payments..............................................................22
Section 10: Securty....... ........................................................ ......................................... ...23
Section 11: Defaults and Remedies ............ .... ................... ......... ................. .................. ....23
Section 12: Indemification and Liability.........................................................................26
Section 13: Insurance.........................................................................................................27
Section 14: Force Majeure.............................~...................................................................28
Section 15: Several Obligations ........................................................................................29
Section 16: Choice of Law ................................................................................................29
Section 17: Parial Invalidity ....~.................................................................................~......29
Section 18: Waiver ............................................................................................................30
Section 19: Governental Jursdiction and Authorizations ..............................................30
Section 20: Successors and Assigns ..................................................................................30
Section 21: Entire Agreement.. ..................... ........................................... ..........................31
Section 22: Notices............................................................................................................31
2ßH FEB 1 G
10: 1;
POWER PURCHASE AGREEMENT
THIS POWER PURCHASE AGREEMENT, entered into ths ~ day O~UO¡(t' 2011,
is between Cargill, Incorporated, a Delaware corporation (the "Seller") and Pacifi orp, an
Oregon corporation acting in its merchant fuction capacity ("PacifCorp"). Seller and
PacifiCorp are refered to collectively as the "Partes" and individually as a "Part".
RECITALS
A. Seller intends to constrct, own, operate and maintain a biogas-fueled digester
facility, including Seller's Interconnection Facilities, for the generation of electrc power located
within PacifiCorp serice tertory near Robers, in Jefferson County, Idaho with an expected
Facility Capacity Rating of 1,696-kilowatts (kW), as fuer descrbed in Exhibit A and Exhibit
B ("Facilty); and
B. Seller intends to operate the Facilty as a Qualifyng Facilty; as such ter is
defied in ths Agreement, and to sell Net Output to PacifiCorp in Idaho.
C. Seller estimates that the averge anual Net Output to be delivered by the Facilty
to PacifiCorp is 9,450,000 kilowatt.,hour (kWh) in the fist year of operation and 12,600,000
kWh in subsequent yeas pursuant to the monthy Intial Year Deliver Schedule in Section 4.3
in the deliver schedules in Exhibit F-l and Exhbit F-2 hereto, which amount of energy
PacifiCorp will include in its resource plang.
D. Seller intends to sell andPacifiCorp intends to purchase all the Net Output from
the Facility in accordance with the terms and conditions of ths Agreement.
E. PacifiCorp intends to designate Seller's Facilty as a Netork Resource for the
puroses of serng Network Load.
F. Ths Agreement is a ''New QF Contract" under the PacifiCorp Inter-Jursdictional
Cost Allocation Revised Protocol.
G. Seller has provided PacifiCorp with: (a) a motive force plan and associated
certification from a Licensed Professional Engieer as descrbed in Section 7 of this Agreement;
and (b) an executed copy of Exhibit I, "Seller Authorization to Release Generation Data to
PacifiCorp."
NOW, THEREFORE, the Paries mutually agree as follows:
SECTION 1: DEFINITIONS
When used in this Agreement, the following ters shall have the following meanngs:
1.1 "Adjusted Scheduled Monthly Energy Delivery" shall have the meanig set
fort in Section 4.4.
1.2 "As-built Supplement" shall be a supplement to Exhibit A, provided by Seller
following completion of construction of the Facilty, accurately describing the completed
Facility.
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1.3 "Biling Period" means the time period between PacifiCorp's reading of its
power pUrchase meter at the Facilty and shall coincide with calendar months.
1.4 "Capacity Factor" means, for any given period of time, the Net Output (kWh)
delivered divided by the product of the Facility Capacity Rating (kW) and the total hours. in
the given period of time.
1.5 "Commercial Operation" means that not less than 90% of the expected Facility
Capacity Rating is fully operational. and reliable and the Facilty is fully interconnected and
synchronized with the System, all of which shall be Seller's responsibilty to receive or obtain,
and which occurs when all of the following events: (i) have occurred, and(ü) remain
simultaneously true and accurate as of the time on which Seller gives PacifiCorp notice that
Commercial Operation has occurred: .
1.5.1 PacifiCorp has 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.
1.5.2 PacifiCorp has received documentation tht start-up testing of the
Facilty has been completed in accordance with Exhibit E.
1.5.3 PacifiCorp has received a certificate addressed to PacifiCorp from
a Licensed Professional Engineer, an attorney in good stading in Idaho, or a letter
from the Tranmission Provider, stating that, in accordance with the Generator
Interconnection Agreement, all required Interconnection Facilties have been
constructed, all required interconnection tests have been completed and the Facility is
physically interconnected with the System in conformance with the Generator
Interconnection Agreement and able to deliver energy consistent with the terms of this
Agreement, and the Facility is synchronied with the System.
1.5.4 PacifiCorp has received a certificate addressed to PacifiCorp from
a Licensed Professional. Engineer, or an.attorney in good standing in Idaho, stating that
Seller has obtained all Required Facilty Documents and, if requested by PacifiCorp in
writing, that Seller has provided copies of any or all such requested Required Facilty
Documents.
1.5.5 Seller has complied with the security requirements of Section 10.
1.5.6 Network Resource Designation and Transmission Service Request.
(a) Seller has provided all data required by the Transmission Provider
to enable the Facility to be designated as a network resource in
accordance with the Tarff.
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(b) PacifiCorp has received confirmation from the Transmission
Provider that the Facility has been designated as a network
resource.
(c) Seller has provided all data required for PacifiCorp to submit a
transmission serce request for the Facilty pursuant to the Tarff.
(d) PacifiCorp has received confiration from the TransmissionProvider that the transmission serce request has been granted in
suffcient capacity to meet or exceed the Maxmum Facility
Deliver Rate and the Seller has paid all costs associated with any
requiements of the transmission serce request.
1.6 "Commercial Operation Date" means the date, as designated by PacifiCorp
pursuant to Section 2.3, that the Facilty first achieves Commercial Operation.
1. 7 "Commission" means the Idao Public Utilties Commission.
1.8 "Conformng Energy" means all Net Energy except Non-Conformg Energy.
1.9 "Conformng Energ Purchase Price" means the applicable price for
Conforming Energy and capacity (if any) , specified in Section 5.1.
1.10 "Contract Year" mea a twelve (12) month period commencing at 00:00 hours
Mountain Prevailng 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, uness earlier terminated as provided herein.
1.11 "Delay Liquidated Damages", "Delay Daly Minum", "Delay Period",
"Delay Price" and "Delay Volume" are defied in Section 2.4 of this Agreement. "Delay
Security" is defined in Section 10.1.1 of th Agreement.
1.12 "Effecve Date" is defined in Section 2.1 of this Agreement.
1.13 "Energy Delivery Schedule" is defined in Section 4.3 of ths Agreement.
1.14 "Envionmental Attrbutes" means any and all claims, credits, benefits,
emissions reductions, offsets, and allowances, howsoever entitled, resulting from the
avoidance of the emission of any gas, chemical, or other substance to the air, soil or water,
which are deemed of value by PacifiCorp. Environmental Attributes include but are not
limited to: (1) any avoided emissions of pollutants to the air, soil, or water such as (subject to
the foregoing) sulfu oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO), and other
pollutants; and (2) any avoided emisions of carbon dioxide (C02), methane (CH4), and other
greenhouse gases (GHGs) that have been determined by the United Nations Intergovernental
Panel on Climate Change to contribute to the actual or potential theat of altering the Eart~s
climate by trapping heat in the atmosphere. Environmental Attributes do not include (i)
Production Tax Credits or certain other tax incentives existing now or in the future associated
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with the construction, ownership or operation of the Facilty, (ii) matters designated by
PacifiCorp as sources of liabilty, or (iii) adverse wildlife or environmental impacts.
1.15 "Environmental Contamination" means the introduction or presence of
Hazardous Materials at such levels, quantities or location, or of such form or character, as to
constitute a violation of federal, state or local laws or regulations, and present a material risk.
under federal, state or local laws and regulations tht the Premises wil not be available or
usable for the purposes contemplated by ths Agreement.
1.16 "Expiration Date" is defined in Section 2.1 of this Agreement.
1.17 "Facilty" is defined in Recital A of this Agreement.
1.18 "Facilty Capacity Rating" mea the sum of the Nameplate Capacity Ratigs
for all generators comprising the Facility.
1.19 "Force Majeure" has the meanng set fort in Section 14.1.
1.20 "Forced Outage" means an outage that requires removal of one or more
generating unts from service, another outage state or a reserve shutdown state before the end
oCthe next weekend. Maintenance Outages and Planned Outages are not Forced Outages.
1.21 "Generator Interconnecion Agreement" or "GIA" mean the generator
interconnection agreement entered into separately between Seller and the Transmission
Provider, providing for the construction, operation, and maintenance of the Interconnection
. . Facilties required to accommodate deliveries of Seller' sN etOutput.
1.22 "Governmental Authority" means any supranational, federal, state or other
political subdivision thereof, having jurisdiction over Seller, PacifiCorp or this Agreement,
including any municipality, townhip or county, and any entity or body exercising executive,
legislative, judicial, reguatory or admstrative functions of or pertaing to governent,
including any corporation or other entity owned or controlled by any of the foregoing~
1.23 "Hazardous Materials" means any waste or other substace that is listed,
defined, designated or classified as or determined to be haardous under or pursuant to any
environmental law or regulation.
1.24 "Inadvertent Energy" means: (1) energy delivered in excess of the Maximum
Monthly Puchase Obligation; and (2) energy delivered to the Point of Delivery at a rate
exceeding the Maximum Facilty Delivery Rate. Inadvertent Energy is not included in Net
Output.
1.25 "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
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utilized for such days. If the ICE index or any replacement of that index ceases to be
published during the term of ths 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 unreasonably withold, condition or delay.
1.26 "Initial Year Energy. Delivery Schedule" shall have the meaning set fort in
Section 4.3.1.
1.27 "Interconnection Facilties", as defined in the Generator Interconnection
Agreement, mean all the facilties and ancilary equipment used to interconnect the Facilty to
the System.
1.28 "Letter of Credit" mean an irrevocable stadby letter of credit in a form
retlsonably acceptable to PacifiCorp, namg PacifiCorp as the party entitled to demand
payment and present draw requests thereunder. Such letter of credit shall be provided by an
institution that is a United States office of a commercial ban or trust company organied
under the laws of the United States of America or a political subdivision thereof, with a credit
rating on its long-term senior unsecured debt of at least" A" from Standard & Poor's and
"A2" from Moody's Investor Services, and having assets of at least $10,000,00,000 (net of
reserves).
1.29 "Licensed Professiona Engineer" mean a person who is licensed to practice
engineering in the state of Idaho, who has trainng and experience in the engineerig
discipline(s) relevant to the matters with respect to which such person is called to provide a
certification, evaluation and/or opinon, 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 opinons 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.
1.30 "Maitenance Outage" means any outage of one or more generating . units that
is not a Forced Outage or a Planed Outage. A Maintenace Outage is an outage that can be
deferred until after the end of the next weekend, but that requires that the generating unites) be
removed from service before the next Planned Outage. A Maintenance Outage may occur any
time during the year and must have a flexible start date.
1.31 "Material Adverse Change" shall occur when Seller, in the reasonable opinion
of PacifiCorp, has experienced a material adverse change in abilty to fufill its obligations
under this Agreement. A downgrade of Seller's long-term credit rating (corporate or long-
term senior unecured debt ratig) below 'Baa3' from Moody's Investors Services
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("Moody's") or below 'BBB-' from Standard & Poor's Ratings Group ("S&p") or the
cessation of S&P or Moody's rating of Seller shall constitute a Materìal Adverse Change.
1.32 "Maxmum Curtled Facilty Delivery Rate" means the maximum
instantaneous rate (lW) at which the Facility is capable of delivering Net Output at the Point
of Delivery during a Qualifying Curtailment.
1.33 "Maximum Facilty Delivery Rate" means the maximum instantaneous rate
(kW) at which the Facility is capable of delivering Net Output at the Point of Delivery, as
specified in Exhibit Å. The Maximum Facilty Delivery Rate may not exceed the Maximum
GIA Delivery Rate.
1.34 "MaximumGIA Delivery Rate" means the maximum rate (kW) at which the
Generator Interconnection Agreement allows the Facility to deliver energy to the Point of
Delivery and is set fort in Exhibit A.
1.35 "Maxmum Monthly Purchase Obligation" mean the maximum amount of
energy PacifiCorp is obligated to purchase under ths Agreement in a calendar month. In
accordance with Commission Order No. 29632, the Maximum Monthy Purchase Obligation
for a given month, in kWh, shall equal 10,000 kW multiplied by the total number of hours in
that month and prorated for any parial month.
1.36 "Nameplate Capacity Rating" means the maximum instantaneous generating
capacity of any quaifying small power or cogeneration generating unit supplying all or part of
the energy sold by the Facilty, expressed in MW or kW, when operated consistent with the
manufacturer'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.
1.37 "NERC" means the Nort American Electric Reliabilty Corporation.
1.38 "Net Energy" means the energy component, in kWh, of Net Output. Net
Energy does not include Inadvertent Energy.
1.39 "Net Output" mean all energy and capacity (if any) produced by the Facilty,
less station use and less transformtion and tranmission losses and other adjustments, if any.
For purposes of calculating payment under this Agreement, Net Output of energy shall be the
amount of energy flowing through the Point of Delivery, less any station use not provided by
the Facilty. Net Output does not include Indvertent Energy.
1.40 "Net Replacement Power Costs" is defied in Section 11.4 of ths Agreement.
1.41 "Network Resource" shall have the meanng set fort in the Tariff.
1.42 "Network Servce Provider" means PacifiCorp Tranmission or a successor,
including any regional transmission organization (RTO), as a provider of network service to
PacifiCorp under the Tariff.
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1.43 "Non-Conforming Energy" mea for any Biling Period: (1) that portion, if
any, of Net Energy delivered subsequently to the intial 110% of the Scheduled Monthly
Energy Delivery for that Biling Period; or (2) all Net Energy delivered when Net Energy
delivered is less than 90% of the Scheduled Monthly Energy Delivery for that Billng Period;
and (3) all Net Output produced by the Facilty prior to the Commercial Operation Date.
1.44 "Non-Conforming Energy Purchase Price" means the applicable price for
Non-Conforming Energy and capacity, specified in Section 5. 1 .
1.45 "Off-Peak Hours" means all hours of the week.thatare not On-Peak Hours.
1.46 "On-Peak Hours" mea hours from 7:00 a.m. to 11:00 p.m. Mountain
Prevailing Time (MPT) , Monday though Saturday, excluding Western Electricity
Coordinting Council (WECC) and Nort American Electric Reliabilty Corporation (NERC)
holidays.
1.47 "PacifiCorp" is defied in the first paragraph of this Agreement, and excludes
PacifiCorp Transmission or a successor, including any Regional Transmission Organiation.
1.48 "PacifiCorp Transmission" means PacifiCorp, an Oregon corporation, acting
in its tranmission fuction capacity.
1.49 "Planned Outage" mea an outage of predetermined duration that is scheduled
in Seller's Energy Delivery Schedule. Boiler overhauls, tubine overhauls or inspections are
tyical planed outages. Maitenance Outages and Forced Outages are not Planned Outages.
1.50 "Point of Delivery" means the high side of the generation step-up transformer(s)
located at the point of interconnection between the Facilty and the System, as specified in the
Generator Interconnection Agreement. and in Exhibit B.
1.51 "Premises" means the real propert on which the Facilty is or wil be located,
as more fully described on Exhibit A.
1.52 "Prie Rate" mean the rate per annum equa 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 announced 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 Part to whom interest based on the prime rate is being paid.
1.53 "Production Tax Credits" means production tax credits under Section 45 of the
Internal Revenue Code as in effect from time to time during the term hereof or any successor
or other provision providing for a federal tax credit determined by reference to renewable
electric energy actually generated and sold and any correlative state tax credit determined by
reference to renewable electric energy actually generated and sold for which the Facilty is
eligible. Production Tax Credits do not include any tax credit determined by reference to
investment.
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1.54 "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 reliability, safety and expedition.
Prudent Electrical Practices is not intended to be limited to the optimum practice, method or
actto the exclusion of all others, but rather to be a spectrum of possible practices, methods or
acts.
1.55 "Qualifying Curtailment" shall have the meaning set fort in Section 4.4.
1.56 "QF" means "Qualifying Facilty", as that term is defined in the version of
FERC Regulations (codified at 18CFR Part 292) in effect on the date of this Agreement.
1.57 "Replacement Period", "Replacement Price" and "Replacement Volume"
shall have the meanings set fort in Section 1104 of this Agreement.
1.58 "Required Facilty Documents" means all deeds, titles, leases, licenses,
permts, authorizations, and agreements demonstrating that Seller controls the necessar
property rights, (e.g. site lease), rights to motive force, and government authorizations to
construct, operate, and maintain the Facilty, including without limitation those set fort in
Exhibit C.
1.59 "Requirements of Law" means any applicable and madatory (but not merely
advisory) federal, state and local law, statute, regulation, rue, code or ordince enacted,
adopted, issued or promulgated by any. federal, state, local or other. Governental Authority
or regulatory body (including those pertainng to electrical, building, zoning, environmental
and occupational safety and health requirements).
1.60 "Scheduled Commercial Operation Date" means the date by which Seller
promises to achieve Commercial Operation, as specified in Section 2.2.4.
i .61 "Scheduled Monthly Energ Delivery" mean the Net Energy scheduled to be
delivered during a given calendar month, as specified by Seller in the Energy Delivery
Schedule.
1.62 "Subsequent Energy Delivery Schedule" is defined in Section 4.3.3 of this
Agreement.
1.63 "System" mea the electrc transmission substation and transmission or
distribution facilties owned, operated or maintained by Transmission Provider, which shal
include, after constrction and installation of the Facility, the circuit reinforcements,
extensions, and associated terminal facilty reinforcements or additions required to
interconnect the Facility ,all as set forth in the Generator Interconnection Agreement.
8
1.64 "Tariff" means the PacifiCorp Transmission FERC Electric Tariff Volume No.
11 Pro Forma Open Access Transmission Tarff, as revised from time to time, or the
comparable tariff of a successor Tranmission Provider.
1.65 "Transmission Provider" means PacifiCorp Tranmission or a successor,
including any Regional Transmission Organation.
SECTION2: TERM, MILESTONES, COMMERCIAL OPERATION DATE
2.1 This Agreement shall become effective after execution by both Parties and after
approval by the Commssion ("Effective Date"); provided, however, this Agreement shall not
become effective until the Commssion has determined, pursuantto a final and non-appealable
order, that the prices to be paid for energy and capacity are just and reasonable, in the public
interest, and that the costs incurred 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 proportonate share ofsaid expenses. .
Unless earlier terinated as provided herein, the Agreement shall remain in effect until midnight
(24:00 MPT) on February 28,2021 ("Expiration Date").
2.2 Time is of the essence of this Agreement, and Seller's abilty to meet certain
requirements prior to the Commercial Operation Date and to achieve Commercial Operation
by the Scheduled Commercial Operation Date is critically important. Therefore,
2.2.1 By the date 5 business days after the Effective Date, Seller shall
provide Delay Security required under Section 10.1.1, as applicable.
2.2.2 At least ten business days prior to delivery of any energy from the
Facilty to PacifiCorp, Seller shall provide PacifiCorp with an executed Generator
Interconnection Agreement.
2.2.3 Prior to Commercial Operation, Seller shall provide PacifiCorp
with an As-built Supplement acceptable to PacifiCorp.
2.2.4 Seven days after the Effective Date of this Agreement, Seller shall
achieve Commercial Operation ("Scheduled Commercial Operation Date").
2.3 Establishing Commercial Operation. To achieve Commercial Operation, Seller
must provide, subject to PacifiCorp's written approval which wil not be uneasonably
witheld, written notice to PacifiCorp stating when Seller believes that the Facility has
achieved Commercial Operation accompanied by the certificates described in Section 1.5.
PacifiCorp's approval, if given, shall designate the Commercial Operation Date. In no event
wil delay in achieving the Scheduled Commercial Operatioii Date postpone the Expiration
Date specified in Section 2.1. 1/
9
2.4 Delay. Liquidated Damages. Seller shall cause the Facility to achieve
Commercial Operation on or before the Scheduled Commercial Operation Date. If
Commercial Operation occurs after the Scheduled Commercial Operation Date, Seller shall be
liable to pay PacifiCorp delay damages for the number of days ("Delay Period") the
Commercial Operation Date occurs after the Scheduled Commercial Operation Date, until the
earlier of occurrence of the Commercial Operation Date or the termination of this Agreement
("Delay Liquidated Damages"). Bilings and payments for Delay Liquidated Damages shall
be made in accordance with Section 10.1.
2.4.1 Delay tiquidated Damages. Delay Liquidated Damages equals the
sum of: for each day in the Delay Period, the greater of (1) the Delay Daily Minimum
or (2) the Delay Price times the Delay Volume,
Where:
"Delay Daily Minimum" equals (a) for the first 90 calendar days following the
Scheduled Commercial Operation Date: one-ninetieth (l/90th) of forty-five
dollars ($45) multiplied by the Maximum Facilty Deliver Rate with the
Maximum Faciliy Deliver Rate being measured in kW; (b) after the 90th
calendar day following the Scheduled Commercial Operation Date: $0.
"Delay Price" equals the positive difference, if any, of the Index Price minus the
weighted average of the On-Peak and Off-Peak monthly Conforming Energy
Prices; and
"Delay Volume" equals the applicable Scheduled Monthly Energy Delivery
divided by the number of days in that month.
2.4.2 Appropriateness of Damages. The Parties agree that the daages
PacifiCorp would incur due to delay in the Facilty achieving Commercial Operation on
or before the Scheduled Commercial Operation Date would be difficult. or impossible to
predict with certainty, and that the Delay Liquidat~d Damages are an appropriate
approximation of such damages.
SECTION 3: REPRESENTATIONS AND WARTIES
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 Pacifi Corp has taken all corporate actions required to be taken by it
to authorize the execution, delivery an performance of this Agreement and the
consumtion of the tranactions contemplated hereby.
10
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 court, or any regulatory agency or other body having authority to which
PacifiCorp is subject.
3.L5 Subject to Commsion approval, this Agreement is a valid and
legally binding obligation of PacifiCorp, enforceable against PacifiCorp in accordance
with its term (except as the enforceabilty of ths Agreement may be limited by
banptcy, inolvency, ban moratorium or simlar laws affecting creditors' rights
generally and laws restricting the availabilty of equitable remedies and except as the
enforceabilty of ths 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, covenats, and w~rrants to PacifiCorp that:
3.2.1 Seller is a corporation duly organi and validly existing under
the laws of Delaware.
3.2.2 Seller has the requisite power and authority to enter into this
Agreement and to perform according to the term hereof, including all required
regulatory authority to make wholesale sales from the Facility.
3.2.3 Seller's shareholders, directors, and offcers have taken all actions
required to authorize the execution, delivery and performance of ths Agreement and
the consummation of the tranactions contemplated hereby.
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 court, 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 this Agreement continue to
be a QF. Seller has provided the appropriate QF certification, which may include a
Federal Energy Regulatory Commssion 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 written legal opinion from
11
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 Facility
is a QF and providing suffcient proof (including copies of all documents and data as
PacifiCorp may request) demonstrating that Seller has maintained and wil continue to
maintain the Facilty as a QF.
3.2.7 All information about the Facility set fort in Exhibit A and
Exhibit B has been verified by Seller and is accurate to the best of its knowledge.
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 bankptcy proceeding, is unable
to pay its bils in the ordinry course of its business, or is the subject of any legal or
regulatory action, the result of which could reasonably be expected to impair Seller's
abiltyto own and operate the Facilty in accordance with the terms of this Agreement.
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 the Generation Interconnection
Agreement or any other agreement between the parties related to this Agreement, the
Generation Interconnection Agreement, or the Facilty, and is current on all of its
fincial obligations under such agreements.
3.2.1 1 Seller owns, and wil continue to own for the term of this
Agreement, all right, title and interest in and to the Facilty, free and clear of all liens
and encumbrances other th liens and encumbrances related to thrd-party financing of
the Facilty.
3.2.12 In entering into ths Agreement and the undertaking by Seller of
the obligations set fort herein, Seller has investigated and determned that it is capable
of performing hereunder and has not relied upon the advice, experience or expertise of
PacifiCorp in connection with the transactions contemplated by this Agreement.
3.2.13 All professionals or experts including, but not limited to,
engineers, attorneys or accountants, that Seller may have consulted or relied on in
undertakg the transactions contemplated by this Agreement have been solely those of
Seller.
3.2.14 Seller's leases of real property required for the operation of the
Facility have terms through the Expiration Date of this Agreement and Seller is not in
material breach of any terms of such leases.
3.3 Notice. If at any time during this Agreement, any Part obtains actual
knowledge of any event or information which would have caused any of the representations
and warranties in this Section 3 to have been materially untrue or misleading when made, such
Party shall provide the other Party with written notice of the event or inormation, the
representations and warranties affected, and the action, if any, which such Part intends to
12
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 occurrence of each such event.
SECTION 4: DELIVRY OF ENERGY AND CAPACITY
4.1 Delivery and Acceptance of Net Output. Unless otherwise provided herein,
PacifiCorp wil purchase and Seller-wil sell all Net Output from the Facilty.
4.2 No Sales to Third Parties. During the term of this Agreement, Seller shall not
sell any output from the Facilty to any entity other than PacifiCorp.
4.3 Energy Delivery Schedule. Seller shall prepare and provide to PacifiCorp, on
an ongoing basis, a written schedule of Net Energy expected to be delivered by the Facilty
("Energy Delivery Schedule"), in accordance with the following:
From the Commercial Operation Date though the first twelve ful calendar
months following the' Commercial Operation Date, Seller preicts that the
Facilty wil produce and deliver the following monthly amounts ("Initial Year
Energy Delivery Schedule"):
Month Energy Delivery (kWh)
February 2011- January 2012
600,000
600,000
600,000
750,000
750,000
750,000
900,000
900,000
900,000
900,000
900,000
900,000
Februar
March
April
May
June
July
August
September
October
November
December
. Januar
4.3.1 Seller may revise the Initial Year Energy Delivery Schedule any
time prior to the Commercial Operation Date.
13
4.3.2 Beginng at the end of the ninth full calendar month of
Commercial Operation, and at the end of every third month thereafter, Seller shall
supplement . the Energy Delivery Schedule with three additional months of forward
estimates (which shall be appended to this Agreement as Exhbit D) ("Subsequent
Energy Delivery Schedule"), such that the Energy Delivery Schedule wil provide at
least three months of scheduled energy estimates at all thnes. Seller shall provide
Subsequent Energy Delivery Schedules no later than 5:00 p.m. of the fift business day
after such nith month and each subsequent third month. 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 thee-month
period during the previous year.
4.3.3 Upon and after the Commercial Operation Date, Seller may no
longer revise the Energy Delivery Schedule for the first six full calendar months of
Commercial Operation. After 5:00 p.m. MPT of the fift business day following the
end of the. third ful calendar month of Commercial Operation and the end of each third
calendar month thereafter , Seller may no longer revise the Energy Delivery Schedule
for the six calendar months imediately following such third month. Subject to the
foregoing restrictions in this Section 4.3.3, Seller may revise the Energy Delivery
Schedule for any unestricted month by providing written notice to PacifiCorp. Failure
to provide timely written notice of changed. amounts wil be deemed to be an election
of no change.
4.4 Adjustment of Energy Delivery Schedule. Qualifying Curtlment means, to
the extent not caused by Seller's negligent, reckless, or wilful actions, a period in a given
calendar month during which delivery of Net Output is curtailed or interrupted pursuant to
Section 6.3. In the event of a Qualifying Curailment, the Scheduled Monthly Energy
Delivery wil be adjusted, pro rata, ("Adjusted Scheduled Monthly Energy Delivery") for
that month for purposes of calculating payment under Section 5. The Adjusted Scheduled
Monthy Energy Delivery shall be calculated as follows:
SMED(adj) = SMED*(i- t(HCi * DRm-DRCi)l~i=1 Ht DRm ~
Where:
SMED =
SMED(adj)=
HCi
Ht =
DRc¡=
Scheduled Monthly Energy Deliver for the month in which the
Qualifyg Curailment occurs
Adjusted Scheduled Monthly Energy Deliver for the month in
which the Qualifying Curailment occurs
the duration in hours of the Qualifyg Curailment (i)
total hours in the month in which Qualifyng Curailment occus
the Maximum Curailed Facilty Deliver Rate durng the
Qualifying Curtailment (i)
14
DRm =the Maximum Facility Delivery Rate
a Qualifyng Curailment
the number of Qualifyng curailments in the month
i
n =
Where Qualifying Curailments overlap, each distict perod of overlap shall be calculated as a
separate Qualifyng Curailment such that no hour withn a calendar month may figue into more
than one Qualifyng Curailment.
SECTION 5: PURCHASE PRICES
5.1 Energy Puchase Price. Except as provided in Sections 5.3, PacifiCorp wil pay
Seller non-Ievelized, Conforming Energy or Non-Conforming Energy Purchase Prices for Net
Output adjusted for the month and On-Peak Hours or Off-Pea Hours using the following
formulae, in accordance with Commssion Order Nos. 31025 and 30423:
Conforming Energy Purchase Pnce ;: ARe * MPM
Non-Conforming Energy Puchase Price = Minimum of(ARe * MPM; PV-85)
Where
ARce = Conforming Energy anual rate from Table 1, below, for the year of the
Net Output.
MPM monthly On-Pea or Off-Peak multiplier from Table 2, below, that
corresponds to the month of the Net Output and whether the Net Output
occured durng On-Peak Hour or Off-Peak Hour.
PV -85 85% of weighted average of the average Index Price for the month, or
portion of month, of Net Output.
Example calculations are provided in Exhibit G.
Table 1: Conformig Energy Anual Rates (from Commssion Order No. 31025)1
Conforming Energy
Annual Rate (AR)
Year S/MWh
2011 60.24
2012 63.97
2013 67.51
2014 71.32
2015 75.40
2016 77.76
2017 80.07
2018 82.58
i If Seller has elected levelized pricing for Net Output, additional securty requirements in
Section 10.2 apply.
15
2019 85.05
2020 87.61
2021 90.63
Table 2: Monthly On-PeaklOff-Peak Multipliers (from Commission Order No. 30423)
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%
5.2 Payment
For each Biling Period in each Contract Year, PacifiCorp shall pay Seller as follows:
For Conformng Energy delivered to the Point of Delivery:
Payment - (CEnergYOn_Pea * CEPPriceOn_Pe 1 1000) +
(CEnergYOf.Peak * CEPPriceoff_peak / 1000)
For Non-Conforming Enerd delivered to the Point of Delivery:
Payment - (NCEnergYOn_Pea * NCEPPriceon_Peak / 1000) +
(NCEnergYoff.Peak * NCEPPriceOff.Peak 1 1000)
Where:
CEnergy = Conforming Energy in kWh
CEPPrice = Conforming Energy Purchase Price in $/MWh
NCEnergy Non-Conforming Energy in kWh
NCEPPrice = Non-Conforming Energy Purchase Price in $/MWh
On-Peak = the corresponding value for On-Peak Hours
Off-Peak = the corresponding value for Off-Peak Hours
Example calculations are provided in Exhibit H.
2 See definition of "Non-Conformng Energy".
16
5.3 Inadvertent Energy. PacifiCorp may accept Inadvertent Energy at its sole
discretion, but wil not purchase or pay for Inadvertent Energy.
SECTION 6: OPERATION AN CONTROL
6.1 As-Built Supplement. Upon completion of any construction materially affecting
the Facility, Seller shall provide PacifiCorp an As-built Supplement bearing the stamp of a
Licensed Professional Engineer tht accurately depicts the Facilty as built. The As-built
Supplement must be reviewed and approved by PacifiCorp, which approval shall not
uneasonably be witheld, conditioned or delayed.
6.2 Safe Operation. Seller shall operate and maintain the Facility in a safe maner
in accordance with the Generator Interconnection Agreement, 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 the right to inpect the Facilty to confirm that Seller is operating the
Facility in accordance with the provisions of this Section 6 upon reasonable notice to Seller.
Seller is solely responsible for the operation and maintenace of the Facilty. PacifiCorp shall
not, by reason of its decision to inspect or not to inpect the Facilty, or by any action or
inaction taken with respect to any such inpection, assume or be held responsible for any
liability or occurrence arising from the operation and maintenance by Seller of the Facilty.
6.3 Curtilment. PacifiCorp shall not be obligated to purchase, receive, pay for, or
pay any damages associated with, Net Output (or associated Production Tax Credits or
Environmental Attributes) if such Net Output (or associated Production Tax Credits or
Environmental Attributes) is not delivered to the System or Point of Delivery due to any of the
following: (a) the interconnection between the Facility and the System is disconnected,
suspended or interrupted, in whole or in part, consistent with the terms of the Generation
Interconnection Agreement, (b) the Tranmission Provider or Network Service Provider
directs a general curtailment, reduction, or redispatch of generation in the area (which would
include the Net Output) for any reason, even if such curtilment or redispatch directive is
carried out by PacifiCorp, which may fulfill such directive by acting in its sole discretion; or if
PacifiCorp curtails or otherwise reduces the Net Output in order to meet its obligations to the
Transmission Provider or Network Service Provider to schedule within system limts, (c) the
Facility's Output is not received because the Facilty is not fully integrated or synchronied
with the System, or (d) an event of Force Majeure prevents either Part from delivering or
receiving Net Output. Seller shall reasonably determe the MWh amount of Net Output
curailed pursuat to this Section 6.3 after the fact based on the amount of energy that could
have been generated at the Facilty and delivered to PacifiCorp as Net Output but that was not
generated and delivered because of the curtilment. Seller shall promptly provide PacifiCorp
with access to such information and data as PacifiCorp may reasonably require to confrm to
its reasonable satisfaction the amount of energy that was not generated or delivered because of
a curtailinent described in this Section 6.3.
6.3.1 Upon termination of each curtailment, each Part having knowledge of
the curtilment shall transmit to the other Party, within ten (10) business days, a
17
written statement documenting the cause of curtailment, the time curtailment
commenced, the amount of curtailment during each hour of the curtailment period,
and the time curtailment ended.
6.3.2 At the end of each Biling Period, Seller shall calculate the curtailed
energy, including the Maximum Curtailed Facility Delivery Rate, for each
curailment for necessity during that Biling Period and transmit a sumar statement
of such calculation to PacifiCorp prior to the end of the next month. Seller shall
attest to the accuracy of its calculation of curtailed energy.
6.4 PacifiCorp as Merchant. Seller acknowledgesthatPacifiCorp, acting in its
merchant capacity fuction as purchaser under this Agreement, has no responsibilty for or
control over PacifiCorp Transmission or any successor Transmission Provider and that
interaction between PacifiCorp and PacifiCorp Transmission are at arms' length pursuant to
the Tariffand FERC Order No. 888 and related regulation.
6.5 Scheduling Net Output. At least niety (90) days before the first day of each
calendar quarter, Seller shall provide PacifiCorp with written notice of the Facilty's planed
Net Output generation schedule ("Schedule") for that calendar quarter. At least ten (10) days
before the beginng of each month, Seller shall notify PacifiCorp in writing of any changes or
updates to the Schedule for that month. At or before 0730 MPT on the day before a given day
of delivery, Seller shall notify PacifiCorp' s generation coordinator desk, by telephonig 503-
813-6090 or sending a facsimile to 503-813-6265, of any changes to the Schedule for the
delivery day. Seller shall notify PacifiCorp's generation coordinator desk no later than two
hours. following the commencement of an event of Force Majeure, unscheduled outage or
uncheduled derate, of the expected duration of any such event. The Schedule made pursuat
to this Section 6.5 is independent of and does not alter the.Energy Delivery Schedule.
6.6 Delivery Exceeding the Maximum GIA Delivery Ráte. Seller shall not deliver
energy from the Facility to the Point of Delivery at a rate that exceeds the Maximum GIA
Delivery Rate. Seller's failure to limit such deliveries to the Maximum GIA Delivery Rate
shall be a breach of a material obligation subject to 11.1.8.
6.7 Outages.
6.7.1 Planned Outages. Except as otherwise provided herein,' Seller
shall not schedule a Planned Outage during any portion of the month of December,
January, July, and August, except to the extent a Planned Outage is reasonably
reqùired to enable a vendor to satisfy a gurantee requirement in a situation in which
the vendor is not otherwise able to perform the guarantee work at a time other than
durg one of the months specified above. Seller shall, in Exhibit D, provide
PacifiCorp. with an anual forecast of Planed Outages for each Contract Year at least
one (1) month, but no more that three (3) months, before the first day of that Contract
Year, and shall promptly update such schedule, or otherwise change it only, to the
extent that Seller is reasonably required to change it in order to comply with Prdent
Electrical Practices. Seller shall not schedule more than one hundred fifty (150) hours
18
of Planned Outages for each calendar year. Seller shall not schedule any maintenance
of Interconnection Facilities during such months, without the prior written approval of
PacifiCorp, which approval may be witheld by PacifiCorp in its sole discretion.
6.7.2 Maitenance Outages. If Seller reasonably determes that it is
necessary to schedule a Maintenance Outage, Seller shall notify PacifiCorp of the
proposed Maintenance Outage as soon as practicable but in any event at least five (5)
business days before the outage begin (or such shorter period to whichPacifiCorp may
reasonably consent in light of then existing conditions). Upon such notice, the Parties
shall plan . the Maintenace Outage to mutully accommodate the reasonable
requirements of Seller and the service obligations of PacifiCorp. Seller shall take all
reasonable measures and use best efforts consistent with Prdent Electrical Practices to
not schedule any Maintenance Outage during the following periods: June 15 through
June 30, July, August, and September 1 through September 15. Seller shall include in
such notice of a proposed Maintenance Outage the expected start date and time of the
outage, the amount of generation capacity of the Facilty that wil not be available, and
the expected completion date and time of the outage. Seller may provide notices under
this Section 6.7.2 orally. Seller shall conf any such oral notification in writing as
soon as practicable. PacifiCorp shall promptly respond to such notice and may request
reasonable modifications in the schedule for the outage. Seller shall use all reasonable
efforts to comply with PacifiCorp's request to modify the schedule for a Maintenance
Outage if such modification has no substantial impact on Seller. Seller shall notify
PacifiCorp of any subsequent changes in generation capacity of the Facilty during such
Maintenance Outage and any changes in the Maintenance Outage completion date and
time. Seller shall take all reasonable meaures and exercise its best efforts consistent
with Prudent Electrical Practice& to minimize the frequency and duration of
Maintenance Outages.
6.7.3 Forced Outages. . Seller shall promptly provide to PacifiCorp an
oral report, via telephone to a number specified by PacifiCorp, of any Forced Outage
of the Facilty. Such report shall include the amount of generation capacity of the
Facility that wil not be available because of the Forced Outage and the expected retun
date and time of such generation capacity. Seller shall promptly update the report as
necessary to advise PacifiCorp of changed circumstaces. If the Forced Outage
resulted in more than 15 % of the Facilty Capacity Rating of the Facilty being
unvailable, Seller shall confirm the oral report in writing as soon as practicable.
Seller shall tae all reasonable measures and exercise its best efforts consistent with
Prudent Electrical Practices to avoid Forced Outages and to mimie their duration.
6.7.4 Notice of Deratings and Outages. Without limiting other notice
requirements, Seller shall notif PacifiCorp, via telephone to a number specified by
PacifiCorp, of any limtation, restriction, derating or outage known to Seller that
affects the generation capacity of the Facility in an amount greater than five percent
(5 %) of the Facility Capacity Rating for the following day. Seller shall promptly
update such notice to reflect any material changes to the information in such notice.
19
6.8 Effect of Outages on Estimated Output. Seller shall include Planned Outages
and Maintenance Outages that Seller reasonably expects to encounter in the ordinary course of
operating the Facility into the Scheduled Monthly Energy Delivery amounts in the Energy
Delivery Schedule set fort in Exhibit D.
6.9 Increase to the Maximum Facilty Delivery Rate. Seller may, in accordance
with this Section 6.9 and upon written approval by PacifiCorp, increase the Maximum Facilty
Delivery Rate, unless, after such increase, under normal or average design conditions the Net
Output would exceed the Maximum Monthly Purchase Obligation in any given month.
PacifiCorp approval of such increase is conditioned on the Public Utilty Regulatory Policies
Act (16 U.S.C. 824a-3) and other applicable law requiringPacifiCorp to purchase the
incremental Net Output. If Seller increases the Maximum Facilty Delivery Rate,PacifiCorp
wil continue to pay for base Net Output at the rate(s) prescribed by Section 5 of this
Agreement, and PacifiCorp wil pay for incremental Net Output resulting from the increase to
the Maximum Facility Delivery Rate at the rate(s) prescribed by the Commission at the time of
PacifiCorp's approval, if granted, of the increase in the Maximum Facility Delivery Rate.
PacifiCorp shall specify in its approval, if granted, a reasonable means of distinguishing such
base Net Output from such incremental Net Output.
6.10 Access Rights. Upon reasonable prior notice and subject to the prudent safety
requirements of Seller, and Requirements of Law relating to workplace health and safety,
Seller shall provide PacifiCorp and its authorized agents, employees and inspectors
("PacifiCorp Representatives") with reasonable access to the Facility: (a) for the purose of
reading or testing metering equipment, (b) as necessary to witness any acceptance tests, and
(c) for other reasonable purposes at the reasonable request of PacifiCorp. PacifiCorp shall
without fuer action release Seller against and from any and all any and all loss, fines,
penalties, claim, actions or suits, including costs and attomey'sfees, both at trial and on
appeal resulting from actions or omissions by any of the PacifiCorp Representatives in
connection with their access to the Facilty, except to the extent that such damages are caused
or by the intentiona or grossly negligent act or omission of Seller.
SECTION 7: MOTIVE FORCE
Prior to the execution of ths Agreement, Seller provided to PacifiCorp a motive force plan
attached hereto as Exhibit F-l, demonstrating to PacifiCorp's reasonable satisfaction: (1) the
feasibility that Facilty Net Energy will equal.the Energy Delivery Schedule in Exhibit D for the
duration of this Agreement; and (2) the likelihood that the Facilty, under average design
conditions, wil generate at no more than 10 aMW in any calendar month, together with a
cerification from aLicensed Professional Engineer attached hereto as Exhibit F-2, ceifyng to
PacifiCorp that the Facility can reasonably be expected to perform as predicted in the motive
force plan for the duration of this Agreement. The motive force plan included, or was
accompaned by, all Required Facility Documents relating to Seller's right to use the motive
force as reasonably determined by PacifiCorp, which accompanying documents, if any, are
attached hereto as par ófExhibit F-1.
20
SECTION 8: METERING
8.1 Metering Adjustment. Metering wil be performed at the location and in the
maner specified in ExWbit B and the Generator Interconnection Agreement. All quantities of
energy purchased hereunder shall be adjusted to account for electrical losses, if any, between
the point of metering and the Point of Delivery, so that the purchased amount reflects the net
amount of power flowing into the System at the Point of Delivery. 3 The loss adjustment shall
be a reduction of 2 % of the kWh energy production recorded on the Facility output meter until
actually measured and calibrated at the meter by PacifiCorp Transmission and documented in a
signed letter to Seller from PacifiCorp's QF Contracts Admnistrator.
8.2 Metering Errors. If any inpections or tests made pursuat to the Generator
Interconnection Agreement discloses an error exceeing two percent (2 % ), either fast or slow,
proper correction, based upon the inccuracy found, shall be made of previous readings for the
actual period during which the metering equipment rendered inaccurate measurements if that
period can he ascertained. If the actual period canot be ascertained, the proper correction
shall be made to the measurements taken during the time the metering equipment was in
service since last tested, but not exceeding thee Biling Periods, inthe amount the metering
equipment shall have. been shown to be in error by such test. Any correction in bilings or
payments resulting from a correction in the meter records sha be made in the next monthly
biling or payment rendered.
8.3 Telemeterig. In accordace with the Generator Interconnection Agreement,
Seller shall provide telemetering equipment and facilties capable of transmitting to
Tranmission Provider (who wil share it with PacifiCorp as authorized by Exhibit I, "Seller
Authorization to Release Generation Data to PacifiCorp") the following inormation
concerng the Facility on a real-time basis, and wil operate such equipment when requested
by PacifiCorp to indicate:
(a) instantaneous MW output at the Point of Delivery;
(b) Net Output; and
(c) the Facilty's total instataeous generation capacity.
8.4 Monthly Reports and togs and Other Information.
8.4.1 Electronic Fault Log. Seller shall maintain an electronic fault log
of operations of the Facility during each hour of the term of this Agreement
commencing on the Commercial Operation Date. Seller shall provide PacifiCorp with
a copy of the electronic fault log within thir (30) calendar days after the end of the
Billng Period to which the fault log applies.
3 If station servce is supplied via separate facilities, PacifiCorp wil deduct station serice from
the metered facilty output to calculate Net Output.
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8.4.2 Upon the request of PacifiCorp, Seller shall provide PacifiCorp the
manufacturers' guidelines and recommendations for maintenance of the Facilty
equipment.
8.4.3 By each January 10 following the Commercial Operation Date,
. Seller shall provide to PacifiCorp written certification that Seller has completed. all the
maufacturers' guidelines and recommendations for maintenace of the Facility
equipment applicable to the previous calendar year.
8.4.4 At anytime from the Effective Date, one (1) year's advance notice
of the termnation or expiration of any agreement pursuant to which the Facilty or any
equipment relating thereto is upon the Facilty site; provided that the foregoing does
not authorize any early termination of any land lease.
8.4.5 As soon as it is known to Seller, Seller shall disclose to
PacifiCorp, the extent of any material violation of any environmenta laws or
regulations arising out of the construction or operation of the Facility, or the presence
of Environmental Contamination at the Facilty or on the Premises, alleged to exist by
any Governental Authority having junsdiction over the Premises, or the present
existence of, or the occurrence during Seller's occupancy of the Premises of, any
enforcement, legal, or reguatory action or proceeing relating to such alleged violation
or aleged presence of Environmental Contamination presently occurring or having
occurred during the period of time that Seller has occupied the Premies.
8.5 Maintenace of Metering Equipment. To the extent not otherwise provided in
the Generator Interconnection Agreement, PacifiCorp shall inspect, test, repair and replace the
meterin equipment periodically, or at the request of Seller if Seller has reason to believe
metering may be off and requests an inspection in writing. To the extent not otherwise
provided in the Generator Interconnection Agreement, all PacifiCorp' s costs relating to
designing, installng, maintaining, and repairing metering equipment installed to accommodate
Seller's Facilty shall be borne by Seller.
SECTION 9: BILLINGS. COMPUTATIONS AND PAYMENTS
9.1 Payment for Net Output. On or before the thirtieth (30t) 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 pursuant to this
Agreement, the Generator Interconnection Agreement, and any other agreement(s) between the
Parties.. Any such offsets shall be separately itemized on the statement accompanying each
payment to Seller.
9.2 Corrections. PacifiCorp shall have up to thirt-six (36) months to adjust any
payment made pursuant to Section 9. i. In the event PacifiCorp determines it has overpaid
Seller (for Inadvertent Energy, calibration error, or otherwise), PacifiCorp may adjust Seller's
future payment accordingly in order to correct the error in a reasonable time.
22
9.3 Interest on Overdue Amounts. Any amounts owing after the due date thereof
shall bear interest at the Prime Rate plus two percent (2 %) per annum from the date due until
paid; provided, however, that the interest rate shall at no time exceed the maximum rate
allowed by applicable law.
9.4 Disputed Amounts. If either Par, in good faith, disputes any amount due
pursuant to an invoice rendered hereunder, such Part shall notify the other Part of the
specific basis for the dispute and, if the invoice shows an amount due, shall pay that portion of
the statement that is undisputed, on or before the due date. Any such notice shall be provided
within two (2) years of the date of the . invoice in which the error first occurred. If any amount
disputed by such Part is determined to be due to the other Part, or if the Parties resolve the
payment dispute, the amount due shall be paid with five (5) days after such determination or
resolution, along with interest in accordance with Section 9.3.
SECTION 10: SECURTY
10.1 Delay Security:
10.1.1 Duty to Post Securty. By the date provided in Section 2.2.1,
Seller shall post a Letter of Credit, cash or a parenta guaranty, each in a form
acceptable to PacifiCorp, in the amount of $100,097, as calculated pursuant to Section
10.1.2 ("Delay Security"). To the extent PacifiCorp receives payment from the Delay
Security, Seller shall, within fifteen (15) calendar days, restore the Delay Security as if
no such deduction had occurred.
10.1.2 Calculation of Delay Security. The dollar value of Delay Security
. shall equal the greater of: (1) forty-five dollars ($45) multiplied by the Maximum
Facilty Delivery Rate with the Maximum Facilty Delivery Rate being measured in
kW; or (2) the sum of the products, for each of the first thee calendar months after the
Scheduled Commercial Operation Date, of:
the energy in the Initial Year Energy Delivery Schedule for the month (kWh)
multiplied by the monthly weighted average On-Peak and Off-Peak Conformig
Energy Purchase Price for the month ($/MWh) divided by 1000.
Such amount shall be fixed upon execution of this Agreement.
10.1.3 Right to Draw on Security. PacifiCorp shall have the right to draw
on the Delay Security to collect Delay Liquidated Damages. Commencing on or about
the first of each month, PacifiCorp wil invoice Seller for Delay Liquidated Damages
incurred, if any, during the preceding month. If inufficient Delay Security is
available, Seller shall pay PacifiCorp for invoiced Delay Liquidated Damges no later
than five business days after receiving such invoice. The Parties wil make bilings and
payments for Delay Liquidated Damages in accordance with Section 9.
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10.1.4 Release of Delay Security. Unless PacifiCorp disputes whether
Seller has paid all Delay Liquidated Damages, PacifiCorp shall release the Delay
Security on the earlier of the 30th calendar day following commencement of
Commercial Operation or the 60th calendar day following PacifiCorp's termination of
this Agreement.
10.1.5 Default. Seller's failure to post and maintain Delay Security in
accordance with Section 10.1 wil constitute an event of default, unless cured in
accordance with Section 11.1.1 of this Agreement.
SECTION 11: DEFAULTS AND REMEDIES
11.1 The following events shall constitute defaults under this Agreement:
11.1.1 Non-Payment. A Part's failure to mae a payment when due
under this Agreement, . or post and maintain securty in conformance with the
requirements of Section 10. or maintain inurance in conformance with the
requirements of Section 13 of this Agreement, if the failure is not cured within ten (10)
business days after the non-defaulting Part gives the defaulting Par a notice of the
default.
11.1.2 Breach of Representation. Breach by a Party of a representation or
warranty set fort in this Agreement, if such failure or breach is not cured within th
(30) calendar days following written notice.
11.1.3 Default on Other Agreements. Seller' s failure to cure any default
under. the Generation Interconnection Agreement or any other agreement between the
paries related to this Agreement, the Generation Interconnection Agreement, or the
Facility within the time allowed for a cure under such agreement or intrument.
11.1.4 Insolvency. A Par (a) makes an assignment for the benefit of its
creditors; (b) files a petition or otherwise commences, . authorizes or acquiesces in the
commencement of a proceeding or cause of action under any banptcy or simlar law
for the protection of creditors, or has such a petition filed against it and such petition is
not withdrawn or dismissed within sixty (60) calendar days after such fiing; (c)
becomes inolvent; or (d) is unble to pay its debts when due.
11.1.5 Material Adverse Change. 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) business days from the
date of such request.
11.1.6 Sale to Third-Party. Seller's sale of Net Output to an entity other
than PacifiCorp. as prohibited by Section 4.2.
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11.1.7 Non-Delivery. Unless excused by an event of Force Majeure,
Seller's failure to deliver any Net Energy to the Point of Delivery for thee consecutive
calendar months, if the failure is not cured within thirty (30) calendar days after
PacifiCorp gives Seller notice of the default.
11.1.8 A Part otherwise 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 Party by this Agreement if the failure is not cured within thirty
(30) calendar days after the non-defaulting Part gives the defaulting Party notice of the
default; provided, however, that, upon written notice from the defaulting Party, this
thirty (30) day period shall be extended by an additiona niety (90) calendar days if(a)
the failure cannot reasonably be cured with the thirt.(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 originl thirt (30)
day period and is at all times thereafter dilgently and continuously proceeding to cure
the failure.
11.2 In the event of any default hereunder, the non-defaulting Part must notify the
defaulting Part 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-defaultig Par may termte ths Agreement at its sole discretion by
delivering written notice to the. other Par and may pursue any and all legal or equitable
remedies provided by law or pursuat to th Agreement. The rights provided in this Section
11 are cumulative such that the exercise of one or more rights shall not constitute a waiver of
any other rights.
11.3 In the event this Agreement is termted because of Seller's default and Seller
wishes to again sell Net Output from the facilty using the same motive force to PacifiCorp
following such termination, PacifiCorp in its sole discretion may require that Seller do so
subject to the term of this Agreement, including but not limited to the purchase prices (as set
fort in Section 5), until the Expiration Date (as set fort in Section 2.1). At such time Seller
and PacifiCorp agree to execute a written document ratifying the term of ths Agreement.
11.4 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
estimted administrative 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
adminstrative cost to the utilty 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
25
"Replacement Volume" equals the applicable Scheduled Monthly Energy Delivery
divided by the number of days in that month.
Amounts owed by Seller pursuant to this Section shall be due within five (5) business days
after any invoice from PacifiCorp for the same. The Parties agree that the damages
PacifiCorp would incur due to termination resulting from Seller's default would be diffcult or
impossible to predict with certainty, and that the damages in this Section 11. 4 are an
appropriate approximation of such damages.
11.5 Recoupment of Damages.
(a) Default Secunty Available. If Seller has posted default secunty,
PacifiCorp may draw upon that security to satisfy any damages, above.
(b) Default Security Unavailable. If Seller has not posted default secunty, or
if PacifiCorp has exhausted the default secunty, PacifiCorp may (in.
addition to any other remedy at law) collect any remaining amount owing
by parially witholding future payments to Seller over a reasonable
period of time. PacifiCorp and Seller shall work together in good faith to
establish the period, and monthy amounts, of such witholding so as to
avoid Seller's default on its commercial or financing agreements
necessary for its contiued operation of the Facilty.
SECTION 12: INDEMNIFICATION AND LIABILITY
12.1 Indemnties.
12.1.1 Indemnty bv Seller. Seller shall release, indemnfy 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 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 Facilty, or (d) arising from Seller's
breach of ths Agreement, including without limtation any loss, claim, action or suit,
for or on account of injury, bodily or otherwise, to, or death of, persons, or for
damage to, or destruction or econonic loss of propert 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.
12.1.2 Indemnty by PacifiCorp. PacifiCorp shal release, indemnfy and
hold harmless Seller, its directors, officers, agents, lenders and representatives againt
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 limtation any loss, claim, action or suit, for or on
26
account of injury, bodily or otherwise, 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.
12.2 No Dedication. Nothing in this Agreement shall be construed to create any duty
to, any standard of care with reference to, or any liabilty to any person not a Party to this
Agreement. No undertakig by one Par to the other under any provision of this Agreement
shall constitute the dedication of that Par's system or any portion thereof to the other Part
or to the public, nor affect the status of PacifiCorp as an independent public utilty corporation
or Seller as an independent individual or entity.
12.3 No Warranty. Any review, acceptance or failure to review Seller's design,
specifications, equipment or facilities shall not be an endorsement or a confrmation by
PacifiCorp and PacifiCorp makes no warranties, expressed or implied, regarding any aspect of
Seller's design, specifications, equipment or facilties, including, but not limited to, safety,
durability ,reliabilty, strength, capacity, adequacy or economic feasibility.
12.4 CONSEQUENTIA DAMGES. EXCEPT TO THE EXTENT SUCH
DAMAGES ARE INCLUDED IN THE LIQUIATED DAMAGES, DELAY DAMAGES,
OR OTHER SPECIFIED MEASURE OF DAMAGES EXPRESLY PROVIDED FOR IN
THIS AGREEMENT, NEITHER PARTY SHALL BE tIALE TO THE OTHER PARTY
FOR SPECIA, PUNITIVE, INDIRECT, EXEMPLARY OR CONSEQUENTIAL
DAMAGES, WHETHER SUCH DAMAGES ARE AttOWED OR PROVIDED BY
CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIAILITY, STATUTE OR
OTHERWISE.
SECTION 13: INSURCE
13.1 Certficates. Prior to connection of the Facilty to the System, Seller shall
secure and continuously carry insurance in compliance with the requirements of this Section.
Seller shal provide PacifiCorp insurance certificate(s) (of" ACORD Form" or the equivalent)
evidencing Seller's compliance with the insurance requirements hereunder. In the event of a
claim or other legal action potentially causing the commercial general liabilty insurance to
defend PacifiCorp, 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 furnihed
to PacifiCorp.
13.2 Required Policies and Coverages. Without limiting any liabilties or any other
obligations of Seller under this Agreement, Seller shall secure and continuously carr with an
insurance company or companies, or reinsurance companes, rated not lower than" A-:VII" by
the A.M. Insurance Reports the inurance coverage specified below:
13.2.1 Commercial General Liabilty insurance, written on an occurrence basis,
to include contractul liability, with a minium single limit of $1,000,000 per
27
occurrence to protect against and from all loss by reason of injury to persons or
damage to property based upon and arising out of the activity under this Agreement.
13.2.2 Property insurance providing coverage in an amount at least equal to
80% of the replacement value of the Facilty against "all risks" of direct physical loss
or damage, including coverage for eart movement, eartquake, flood, and boiler and
machinery. The Property policy may contain separate sub-limits and deductibles
consistent with current insurance industry utilty practices for similar property, and
subject to normal and customary polìcy exclusions, terms and conditions. Such
policy(ies) shall include all parties having a finacial interest in the described property
as loss payees.
13.3 The Commercial General Liabilty polìcy required herein shall include (i)
provisions including PacifiCorp, its directors, offcers and agents as additional insureds with
respect to liabilty for bodily injury or property damage caused by Seller, or those acting on
Seller's behalf, in the performance of the oblìgations hereunder, and(ii) separation of insureds
clause so that the insurance applies separately to each insured against whom claim is made or
suit is brought, even in instances where one inured claims againt or sues another insured.
13.4 All liabilty policies required by this Agreement shall include provisions that
such insurance is primary insurance with respect to the interests of PacifiCorp and that any
other insurance maintained by PacifiCorp is excess and not contributory inurance with the
insurance required hereunder. In the event of cancelation or reduction in minimum required
limits of these required insurance polìcies, Seller shall imediately notify PacifiCorp of such
action. Seller wil have 30 calendar days to cure the failure. If the failure canot be
reasonably cured, PacifiCorp may purchase the appropriate coverage and offset the
insurance cost against Seller's payments under this Agreement.
13.5 If Commercial General Liabilty insurance coverage is provided on a "claIm-
made" basis, coverage shall be maintained by Seller for a period of two (2) years after
completion of this Agreement and for such other length of time necessary to cover liabilties
arising out of the activities under ths Agreement.
SECTION 14: FORCE MAJEUR
14.1 As used in this Agreement, "Force Majeure" or "an event of Force Majeure"
means any cause beyond the reasonable control of the Seller or of PacifiCorp which, despite
the exercise of due diligence, such Part is unable to prevent or overcome. By way of
example, Force Majeure may include but is not limited to acts of God, flood, storm, wars,
hostilties, civil strife, strikes, and other labor disturbances, eartquakes, fires, lightnng,
epidemics, sabotage, restraint by court order or other delay or failure in the performance as a
resuitof 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 Part
could not reasonably have been expected to avoid and (iii) by the exercise of due dilgence,
such Party 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
28
market conditions that affect the price of energy or transmission. If either Party is rendered
wholly or in part unable to perform its obligation under this Agreement because of an event of
Force Majeure, both Parties shall be excused from whatever performance is affected by the
event of Force Majeure, provided that:
14.1.1 the non-performing Part, shall, within two (2) weeks after the
occurrence of the Force Majeure, give the other Part written notice describing the
particulars of the occurrence, including the start date of the Force Majeure, the cause
of Force Majeure, whether the Facility remains partially operational and the expected
end date of the F~)fce Majeure;
14.1.2 the suspension of performance shall be of no greater scope and of
no longer duration than is required by the Force Majeure;
14.1.3 the non-performg Part uses its best efforts to remedy its
inabilty to perform; and
14.1.4 the non-performing Par shal provide prompt written notice to the
other Part 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.
14.2 No obligations of either Part which arose before the Force Majeure causing the
suspension of performance shall be excused as a result of the Force Majeure.
14.3 Neither Party shall be required to settle any strike; walout, lockout or other
labor dispute on terms which, in the sole judgment of the Part involved in the dispute, are
contrary to the Party'sbest interests.
SECTION 15: SEVERAL OBLIGATIONS
. Nothng contained in ths Agreement shall ever be constred to create an association, trst,
parnership or joint venture or to impose a trst or parnership duty, obligation or liability
between the Paries. If Seller includes two or more entities, each such entity shall be jointly and
severally liable for Seller's obligations under this Agreement.
SECTION 16: CHOICE OF LAW
Ths 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
jurisdiction.
SECTION 17: PARTIAL INVALIDITY.
It is not the intention of the Paries to violate any laws govering the subject matter of this
Agreement. If any of the ters of the Agreement are finally held or deterned to be invalid,
29
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 concering 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.
SECTION 18: WAIVER
Any waiver at any time by either Party of its rights with respect to a default under this
Agreement or with respect to. any other matters arsing 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 19: GOVERNMENTAL JURISDICTION AND AUTHORIATIONS
PacifiCorp's compliance with the ters of this Agreement is conditioned on Seller's submission
to PacifiCorp prior to the Commercial Operation Date and Seller's maintenance thereafter of
copies of all local, state and federal licenses, penits and other approvals as then may be required
by law for the constrction, operation and maintenance of the Facility.
SECTION 20: SUCCESSORS AND ASSIGNS
20.1 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. This
Agreement may be assigned by either Party upon 30 business days (or longer if reasonably
required) prior written notice and opportunity to object by the other Part; provided that:,
20.1.1 Any entity with which PacifiCorp may consolidate, or into which it
may merge, or to which it may conveyor tranfer substantially all of its electric utilty
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.
20.1.2 Either Party may assign this Agreement without the consent of the
other Party to any affiliate of the assigning Party with an equal or greater credit rating
and with the legal . authority and operationa abilty to satisfy the obligations of the
assignig Part under this Agreement, provided that Seller promptly notifies the
PacifiCorp of any such assignent.
20.1.3 Seller shall have the right to assign ths Agreement, without the
consent of the PacifiCorp, for collateral security puroses to aid in providing finacing
for the Facility, provided that the Seller wil promptly notify PacifiCorp of any such
assignment.
20.1.4 Any attempted assignment that violates this aricle is void and
ineffective. An assignee is responsible for meeting the sare financial, credit, and
30
insurance obligations as the assignor. Where required, consent to assignent wil not
be uneasonably witheld, conditioned or delayed.
SECTION 21: ENTIR AGREEMENT
21.1 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 Facilty. No modification of this Agreement shall be
effective uness. it is in writing and signed by both Parties.
21.2 By executing ths Agreement, each Part releases the other from any claims,
known or unown, that may have arisen prior to the execution of this Agreement with respect
to the Facility and any predecessor facility proposed to have been constructed on the site of the
Facilty and using the same motive force.
SECTION 22: NOTICES
All notices except as otherwise provided in this Agreement shall be in writing, 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.
Notices PacifCorp Seller .
All Notices PacifiCorp Cargil, Incorporated
825 NE Multnornah Street Portland,9350 Excelsior Blvd.
OR 97232
MS 139-4-A
Hopkis, MN 55343
Attn: Contract Administration,
Suite 600 Att: GEEPG Controller
Phone: (503) 813 - 5380 Phone: [phone]
Facsimile: (503) 813 - 6291 Facsimle: [phone]
Duns: 00-790-9013
Federal Tax ID Number: 93-0246090 Duns: 00-624-9189
Federal Tax ID Number: 41-
0177680
All Invoices:Attn: Back Office, Suite 700 Att: GEEPG Controller
Phone: (503) 813 - 5578 Phone: [phone]
Facsimile: (503) 813 - 5580 Facsimile: [phone]
.
Schedulig:Attn: Resource Planng, Suite 600 Att: Craig Maetzold
Phone: (503) 813 - 6090 Phone: [phone]
Facsimile: (503) 813 - 6265 Facsimile: 952-742-6678
Payments:Att: Back Office, Suite 700 Att: GEEPG Controller
Phone: (503) 813 - 5578 Phone: [phone]
31
Notices PacifCorp Seller
Facsimile: (503) 813 - 5580 Facsimile:[phone]
Wire Transfer:Ban One N .A.
To be provided in separate letter from
PacifiCorp to Seller
Credit and .Attn: Credit Manager, Suite 700 Attn: GEEPG Controller
Collections:Phone: (503) 813 - 5684 Phone: [phone]
Facsimile: [phone] Facsimile: [phone]
With Additional Attn: PacifiCorp General Counsel Attn:GEEPG Lawyer
Notices of an Phone: [phone] McGinty Road, MS 24
Event of Default Facsimile: (503) 813~6761 Wayzata, MN 55391
or Potential
Phone: [phone]
Event of Default: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 this Section.
IN WITNESS WHEREOF, the Paries hereto have caused this Agreement to be executed
in their respective names as of the date first above wrtten.
Seller
By:BY:~~7
Name: $Jt'Ti ptt,Pr'(
Title: Short Ter Orgination and
QF Contracts
Title: tv J/t;.frø- bT r H /M41 b'A
32
EXHIBIT A: DESCRITION OF SELLER'S FACILITY
(Completed by Seller)
Seller's Facilty consists of two (2) 848 kW generator(s) manufactured by Jenbacher. More
specifically, each generator at the Facilty is described as:
A. Manufacturer's Nameplate Data:
Type (synchronous or inductive): Synchronous
Model: JMC 412
Number of Phases: 3
Rated Output (kW): 1,696 Rated Output (kVA):
Rated Voltage (line to line):
Rated Current (A): Stator: _ A; Rotor: A
Maximum kW Output: 1696 kW Maximum kV A Output: kV A
Minimum kW Output: 339 kW
Facilty Capacity Rating: 1,696 kWat
Maximum Facilty Delivery Rate: 1696 kW at 480v
Maximum GIA Delivery Rate: 1696 kW intataeous
Describe (1) any differences between the maxum output of the generator(s) and their
Nameplate Capacity Rating(s) and (2) any differences between the Facilty Capacity Rating, the
Maximum Facilty Delivery Rate, and the Maximum GIA Delivery Rate:
Station service requirements, and other loads served by the Facilty, if any, are described
as follows:
The station power requirements include (per unit):
. Jacket water preheating pump: 13kw
. Engine jacket water circulating pump: 7.5kw
. Jacket water circulating pump: 0.370kw
. Intercooling water pump: 0.370kw. Fresh oil pump: 2.5kw. Waste oil pump 2.5kw
. Pre-lube and cool down pump: 1.lkwTotal connected station power: 27.34kw
(Note that the above items do not operate continuously during station operations)
Location of the Facilty: The Facility is located in Jefferson County, Idaho. The location is
more parcularly described as follows:
20 N 2100 East Roberts,.Idaho 83444
Power factor requirements:
Rated Power Factor (PF) or reactive load (kV AR): PF 80%
A-I
EXHIBITB
POINT OF DELIVERY / PARTIES' INTERCONNECTION FACILITIES
(diagram and description provided by Seller)
Instrctions to Seller:
1. Include description of point of meterig, and Point of Delivery
2. Provide interconnection single line drawing of Facilty including any transmission
facilties on Seller's side of the Point of Delivery.
1. The Point of Delivery is at the "Point of Interconnection" on the attached one-line
diagram.
2. The meter labeled M1 on the attached one-line diagram is the totalizing meter or net
meter. The meters labeled M2 and M3 are station service load meters measuring only
the power delivered to each generator. Meter Ml will measure the gross output from
the two generators and wil also receive KWH and KV ARH outputs from meters M2
and M3. These values from metersM2 and M3 will be subtracted from the gross
generation values in meter Ml to produce a net output which wil be recorded on
chanel 1 of meter ML.
B-1
? POINT or INTERCONECTION
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IJ. MEER t.IT OWNED~ ¡ BYP~~P
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EXHBITC
REQUlREDF ACILITY DOCUMENTS
Seller's FERC Certification or Self-Certification as a Qualifying Facility (No. QF10-148-000) .
Generator Interconnection Agreement - Provided Janua 21,2011
Fuel Supply Agreement/ght to Motive Force - Provided December 23,.2010
The following Documents are required to complete ths project:
Facilty Site Lease- Provided December 9,2010
Build Own Operate Transfer Agreement - Provided December 9, 2010
Easements
Permits:
County conditional.use permit, if required
C-1
EXHITD
SUBSEQUENT ENERGY DEtIVERY SCHEDULE
Cargil Kettle Butte 1,696 kW Nameplate Capacity
Scheduled Monthly
Base Energy Delivery Monthly NET
Estimates (kWh)AvekW/mo Capacity Factor
Januar
February
March .
April
May
June
July
August .
September .
October
November
December
TOTAL:
Planed Outages. Seller will provide a Planed Outage schedule anually not to exceed 150
hours per year.
\...~.
D-l
EXHIBITE
START-UP TESTING
Required factory testing includes such checks and tests necessary to determine that the
equipment systems and subsystems have been properly manufactued and instaled, fuction
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 mechancal and electrical equipment;
2. Calibration of all monitoring instrents;
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 manufactuer(s) and designer(s) of equipment.
Required sta-up tests are those checks and tests necessar to determine that all featues
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 rus and fuctionality;
2. System operation tests;
3. Brake tests;
4. Energization of transformers;
5. Synchronizing tests (manua and auto);
6. Excitation and voltage regulation operation tests;
7. Auto stop/star sequence;
8. Completion of any state and federal environmental testing requirements; and
9. Tests required by manufactuer(s) and designer(s) of equipment.
E-l
EXHIBITF~l
MOTIVE FORCE PLAN
Kettle ButteMotive force plan:
1) Determine electrìëal generation design basis
a. Basis of ca1culation for electricâl generation is 0.28kW per Wet Cow Equivalent
(WCE)
b. Theproject design basis is 6000WCE
c. For 6000 WCE =/ 6000*(0.28) = 1680 kW
2) DetermIne tle projected generation rates fot the fist year of operatiotl.
a. The installed genset capaoity ìs 1696 kW, for ge1leration calculations an
ásšilptiol1 of 89% uptíme' is use4~
b. 1696 kW*(0.89)*(24br/d)*(365d!yr)*(1 MW/IOOOkW) = 13,223 MWhlyr 0100
i
MWhm()). Thisis base month genetätion projeption.
c. Asta;t-up phase is projeêtedãStheproject becomes operationaL.
i. For the first 3m.Ofiths, ptodUCtiotlis assumeg at55% of base, resulting in
".600;000 kWh per month '(rOun4ed).
ii. For months 4-6, prooiictjonisassumed at 70% of bäse, resulting in
""750,000 kWh per month (rounded).
iii. For months 7-12, pröduction is assumed at 85% of base, resulting in
900,OOOkWhlmonth (rounded).
3) Determine the projecteg gelleratiQn rates afer the first year.
A value of95% of base month generation wäsused to project ongoing power, this allows a 5%
factor ofsa.ety, resllting in 1,050,000 kWh per month (totmded).
FI- I
EXHIDITF-2
ENGINEER'S CERTIFICA110N
(1) THAT THE MOTIVE FORCE PLAN IN EXHIBIT F~l is ACCURATE.
.~RDgS'$~()NAL..ENømalll
I hereby certify that this plan, specification, or report Wâs prepared by me or under my
direct superVsionaiid tht I am a duly Licensed Professional Engieer under the laWS
of Minnesota.
Prit
Signâtur
Date: December~" ...._."...
(2) THAT, BASED ON THE MOTIVE FORCE PLAN IN~X14:ÍBIT F-I, THEFACn.TfV
CAN REASONABLY BE EXPECTED TO DELIVER DURING THE FÌRSTYEAR
OF OPERATION, ASSUMING AFEBRUARY 1,2011 S~A.T DATE. (Certifillg
engineer to complete !a/:e, below; Table must match Energy Delivery Schedule in.
Exhibit 1)):
9;450,000
THAT, BASED ON THE MOTIVE FORCE PLAN IN EXHIBIT F-l, THE FACILITY
CAN REASONABLY BE EXPECTED TO DELIVER AFTER THE FIRST YEAR OF
OPERAI10N, FOR THE DURATION OF THIS AGREEMENT.
F2-2
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9,. .."-'. - -, _ - ---......"r:..';r~¡;.,
:('~I=I~~.A~í)~1W\iP~t')';.'ø'~?~~!~
~.f&.l:n~2I
EXHIBITG
SAMPLE ENERGY PURCHASE PIDCE CALCULATIONS
The following are samples of calculations of energy purchase prices using the formula and tables
in Section 5.1.
The calculation for the non-Ievelized purchase price during an On-Peak Hour in May of 2011
equals: $60.24/MW~ (the 2011 anual rate for Conforming Energy) multiplied by 92% (0.92)
(the May On-Peak Hour multiplier), which equas $55.42/MWh.
Table 2:. Sample calculations for non-Ievelized Conforming Energy in 2011 (Purchase Price =
anua rate * monthy on-peakoff-peak multiplier).
Calculated Calculated
Conforming Purchase Price Purchase Price
Energy for 2011 On-for 2011 Off-
Annual Peak Peak
Rate for On-Peak Conforming Off-~eak Conforming
2011 Hour Energy Hour Energy
Month (per MWh) Multiplier (perMWh)Multiplier (per MWh)
Januay $60.24 103%$62.05 94%$56.63
Februar $60.24 105%$63.25 97%$58.43
March $60.24 95%$57.23 80%$48.19
April $60.24 95%$57.23 76%$45.78
May $60.24 92%$55.42 .....63% _$37.95
June .
$60.24 94%$56.63 65%$39.16
July $60.24 121%$72.89 92%$55.42
August $60.24 121%$72.89 106%$63.85
September $60.24 109%$65.66 99%$59.64
October $60.24 115%$69.28 105%$63.25
November $60.24 110%$66.26 96%$57.83
December $60.24 129%$77.71 120%$72.29.
0-1
EXHBITH
SAMPtE CONFORMG ENERGY CAtCULATIONS
The followig are sample calculations for determing On-Peak and Off-Peak Conforming
Energy and Non-Conformng Energy for puroses of the payment formulae in Section 5.2 for a
given month. These examples assume that the Net Energy is delivered afer the Commercial
Operation Date and that no Inadvertent Energy is delivered.
Step 1: Determine the 90%/110% performance taget.
SMED-90 (kWh) = 90% * SMED (kWh) (SMED is the Scheduled Monthly Energy
Delivery aftr any adjustments pursuat to Section 4.4.)
SMED-110 (kWh) = 110% * SMED (kWh)
Step 2: Determne which portion of Net Energy for the month is Conforming Energy and which
is Non-Conforming Energy in relation to the 90%/110% performance tagets.
Iftotal Net Energy -: SMED-90, all Net Energy is Non-Conforming Energy
If total Net Energy:;= SMED-90 and -:= SMED-llO, all Net Energy is Conformng
Energy
If tota Net Energy:; SMED-llO,
(a) Determine the point in time during the month at which Net Energy reached
SMED-llO(Time-ll0);
(b) All Net Energy delivered before Time-l1 0 is Conforming Energy;
(c) All Net Energy delivered afer Time-liO is Non-Conforming Energy.
Step 3: Determine the On-Peak and Off-Peak amounts for the Conforming Energy and Non-
Conforming Energy values by whether the meter reading indicates that the energy was
delivered durng On-Peak or Off-Peak Ho,urs. These amounts are the CEnergyOn-Peak,
CEnergYoff_Peak, NCEnergYOn_Peak, and NCEnergyoff-Pea values for the formulae in
Section 5.2.
Example Month: The following is an example calculation for a month given the following
values:
SMED = 200,000 kWh
Net Energy = 250,000 kWh
Example Step 1:Determine the 90%/110% performance taget.
SMED-90 (kWh) = 90% * 200,000 kWh (SMED) = 180,000 kWh
SMED-ii 0 (kWh) = 110% * 200,000 kWh (SMED) = 220,000 kWh
H -1
Example Step 2: Determine which Net Energy is Conforming Energy and which is Non-
Conforming Energy in relátIon to the 90%/110% performance targets.
Because 250,000 kW (Net Energy)). 220,000 kWh (SMED-110),
(a) Assume that the meter shows that accumulated Net Energy for the month
reached 220,000 kWh (SMED-110) at 1 p.m. on the 25th (Time-
110);
(b) All Net Energy delivered before 1 p.m. on the 25th (Time-llO) is Conforming
Energy;
(c) All Net Energy delivered afer 1 p.m. on the 25th (Time-llO) is Non-
Conforming Energy
Example Step 3: Determe the.On-Peak and Off-Peak amounts for the Conforming Energy
and Non-Conforming Energy values by whether the meter reading indicates that the
energy was delivered durng On-Peak or Off-Peak Hours. For ths example, actual
meter readings for On-Peak and Off-Peak Hours are made up. (Note: where Net
Energy ). SMED-11 0, CEnergYon_Pea + CEnergy Of-Peak = SMED-11 0.)
()n-Peak Conforming Energy (kWh) = metered Net Energy delivered before Time-110
: during On-Peak Hours = 150,000 kWh = CEnergyon-Peak
Off-Peak Conforming Energy (kWh) = metered NetEnergy delivered before Time-110
during Off-Peak Hours = 70,000 kWh = CEnergYOff-Pea
On-Peak Non-Conforming Energy (kWh) = metered Net Energy delivered after Time-110
durng On-Peak Hours = 20,000 kWh = NCEnergYon-Pea
Off-Peak Non-Conforming Energy (kWh) = metered Net Energy delivered afer Time-
110 during Off-Peak Hours = 10,000 kWh = NCEnergyoff-Peak
H-2
EXHIBIT I
Seller Authorization to Release Generation Data to PacifiCorp
Customer Aüthorization to Release Generation Data
Date: December 21, 2010
PacifCorp Transmission Services
Attntion: Director, Transmission Services
825 NE Multnomah, Suite 1600
Portland, Oregon 97232
RE: Voluntary CönsèntForm for C~rgil Environmental Finance- Kettle Butte
Dairy Project
Dear PactfCorp Transmisslon:
CatgiUiEnvironmental Finance hereby voluntarily authorizes laçifiCorp's transmission
business unit to shârê Cätgil Environmental Finance generator interconnection
information and generator meter data With Marketing Affliäteemployees of PacifiCorp
Energy, including,b\lt not lÍJJ1lted tothose in the Commercial &.Tfâdirig group.
CárgHl. EnvironnientalFinance acknowledges tJat PacifiCorp. did .not provide it any
,preferences, either operational or tate-related, hi éxëhaiige for this volunta consent.
Craig Maêtzöld
"" P~iñted::Nåfe
General M:anager
Title
peeember 21, 2010
Date