20171222Application.pdf

ROCKY MOUNTAIN
HP",H.E*"B."-,
RECEIVED
20110[C 22 fiH 10, 26
December 22,2017 tnAiio tluBLlijTll.l.,-li:S C0MMI
VIA OVERNIGHT DELIVERY
Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702
Re:Case No. PAC-E-17-14,
IN THE MATTER OF ROCKY MOUNTAIN POWER'S APPLICATION FOR
APPROVAL OF POWER PURCHASE AGREEMENT BETWEEN PACIFICORP
AltD TIIE CITY OF PRESTON,IDAHO
Dear Ms. Hanian
Please find enclosed the original and seven (7) copies each of the Application and Power Purchase
Agreement between PacifiCorp, d/b/a Rocky Mountain Power, and the City of Preston, Idaho.
Under the agreement the City of Preston would sell and Rocky Mountain Power would purchase
electric energy generated from the City of Preston's small hydro generating facility for the
generation of electric power located in Preston, Idaho, in Franklin County, with a nameplate
capacity rating of 400 kilowatts.
If you have any questions please contact Ted Weston at [phone].
Very truly yours,
1407 West North Temple, Suite 330
Salt Lake City, Utah 84116
ONSS
"^"DJ,Steward
Vice President, Regulation
Enclosures
Daniel E. Solander (ISB# 8931)
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake city, utah 84116
Telephone No. [phone]
Facsimile No. [phone]
E-mail: [e-mail]
Attorneyfor Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN )
POWER'S APPLICATION FORAPPROVAL )
OF POWER PURCHASE AGREEMENT )
BETWEEN PACIFICORPAIID THE CITY )
oF PRESTON, IDAHO )
CASE NO. PAC-E-17-I4
APPLICATION OF
ROCKY MOUNTAIN POWER
Comes now, Rocky Mountain Power, a division of PacifiCorp, ("Compotry"), and hereby
respectfully requests, pursuant to RP 52 and the applicable provisions of the Public Utility
Regulatory Policies Act of 1978 ("PURPA"), that the Idaho Public Utilities Commission,
("Commission"), issue an order approving or rejecting the Power Purchase Agreement
("Agreement") between PacifiCorp and the City of Preston, Idaho, ("Seller") dated November 30,
2017 .ln support of this Application, Rocky Mountain Power states as follows:
I. INTRODUCTION
l. Rocky Mountain Power provides electric service to retail customers in the states of
Idaho, Wyoming, and Utah. Rocky Mountain Power is a public utility in the state of Idaho and is
subject to the Commission's jurisdiction with respect to its prices and terms of electric service to
retail customers pursuant to Idaho Code 6l-129. Rocky Mountain Power provides retail electric
service to approximately 77,000 customers in the state of Idaho.
Page 1
2. The City of Preston, Idaho owns, operates, and maintains a small hydro-electric
power plant located in Franklin County, Idaho with a nameplate capacity rating of 400 kilowatts
("kW") (the "Facility"). Seller operates the Facility as a Qualifying Facility ("QF") under the
applicable provisions of PURPA.
3. Sections 201 and 210 of PURPA, and pertinent regulations of the Federal Energy
Regulatory Commission ("FERC") require that regulated electric utilities purchase electricity
produced by co-generators or small power producers that obtain QF status. The rate a QF receives
for the sale of its electricity is generally referred to as the 'oavoided cost" and must reflect the
incremental cost to an electric utility of electric energy or capacity or both, which, but for the
purchase from the QR such utility would generate itself or purchase from another source. The
Commission has authority under PURPA, Sections 201 and 210 and FERC regulations, 18 C.F.R.S
292,to set avoided costs, order electric utilities to enter into fixed-term obligations for the purchase
of electricity from QFs, and implement FERC rules.
4. On December 18, 2012, the Commission issued Order No. 32697, which
established parameters for published and negotiated avoided cost rate calculations. The
Commission further established and defined numerous contract terms and conditions for standard
purchase power agreements ("PPA") entered into between regulated utilities and QFs. On
January 2,2013, the Commission issued Errata to Order No. 32697, which corrected published
avoided cost rates to include energy payments not discounted by transmission and line loss.
Subsequently the Commission issued reconsideration Orders Nos. 32737 and 32802 on
February 5, 2013 and May 5, 2013, respectively, which further clarified certain terms and
conditions of PPAs.
Page2
II. THE POWER PURCHASE AGREEMENT
5. The Seller's current PURPA contract was executed on February 24,1982, after it
was approved by the Commission in December 1981. The PPA didn't become effective until the
Facility's commercial operation date in December 31, 1982. The 35-year PPA is scheduled to
expire on December 31,2017.
6. The total nameplate capacity of the facility is 400 kW. The Seller has provided
Rocky Mountain Power a motive force plan on the Facility demonstrating to the Company's
reasonable satisfaction that: (l) the feasibility that Facility net energy will equal the energy
delivery schedules for the full term of this Agreement1, and (2) the likelihood that the facility, under
average design conditions, will generate at no more than 400 kW in any calendar month. The
facilities estimated net output is approximately 2,900,000 kilowatt-hours per year.
7. The PPA submitted herewith, as Attachment l, is a renewal contract with the same
QF for new terms and conditions. This PPA complies with the Commission's Order Nos. 32697,
32737, and 32802 from Case No. GNR-E-I1-03.
8. Under the terms of the Agreement, the Seller elected to contract with the Company
for a 20-year term from the approval of the Agreement by the Commission. Except as otherwise
indicated, the Company will pay the Seller the price set forth in Exhibit F to the Agreement.
9. Paragraph 2.1 of the Agreement provides that it will not become effective until the
Commission has approved it and determined that the prices paid for energy and capacity are just
and reasonable, in the public interest, and that costs incurred by the Company for purchasing
energy and capacity are legitimate expenses, all of which the Commission will allow the Company
to recover in Idaho rates in the event other jurisdictions deny recovery of their proportionate share
ofsaid expenses.
Page 3
10. The current power purchase agreement between the Company and Seller expires
on December 3 1, 2017 . The parties understand that it may not be possible to review and approve
the new Agreement prior to expiration of the existing agreement. Therefore, the Company
respectfully requests that it be permitted to continue to purchase the output from the Facility under
the current terms and conditions until the new Agreement is reviewed and approved or rejected by
the Commission. PacifiCorp and the Seller have agreed that the price paid after December 31,
2017, would then be trued-up to the price that would have been paid under the new Agreement, in
order to hold PacifiCorp's customers harmless from the extension.
UI. COMMUNICATIONS
I l. Communications regarding this filing should be addressed to:
Ted Weston
Idaho Regulatory Affairs Manager
Rocky Mountain Power
1407 West North Temple, Suite 330
Salt Lake city, utah 841l6
Telephone: [phone]
Email : ted.weston@pac ifi corp.com
IdahoDockets@nacifi corfcom
Daniel E. Solander
Senior Counsel
Rocky Mountain Power
1407 West North Temple, Suite 320
salt Lake city, Utah 841l6
Telephone: [phone]
Email : daniel. solander@pacifi com.com
ln addition, Rocky Mountain Power requests that all data requests regarding this
Application be sent in Microsoft Word to the following:
By email (preferred): [e-mail]
Page 4
By regular mail:Data Request Response Center
PacifiCorp
825 Multnomah, Suite 2000
Portland, Oregon 97232
Informal questions may be directed to Ted Weston, Idaho Regulatory Affairs Manager, at
[phone].
IV. MODIFIED PROCEDURE
12. The Company believes that a hearing is not necessary to consider the issues
presented herein and respectfully requests that this Application be processed under Modified
Procedure, i.e., by written submissions rather than by hearing, pursuant to RP 201.
V. REOUEST FOR RELIEF
WHEREFORE, Rocky Mountain Power respectfully requests that the Commission:
(1) Issue an order authorizing that this matter be processed by Modified Procedure;
(2) Allow the Company to continue to purchase the output of the Facility pursuant to
the terms of the existing power purchase agreement between the Seller and the Company until
the Commission has reviewed and either approved or rejected the new Agreement, after which
the price paid will be trued up to the price that would have been paid under the new Agreement;
(3) Approve or reject the power purchase agreement between the City of Preston,
Idaho and the Company without change or condition; and
(4) Declare that the avoided cost prices set forth in the Agreement are just and
reasonable, in the public interest, and that the Company's incurrence of such costs are legitimate
expenses, all of which the Commission will allow Rocky Mountain Power to recover in rates in
Idaho in the event otherjurisdictions deny recovery oftheirproportionate share ofsaid expenses.
Page 5
DATED this2?"d day of December20lT
Respectfully submitted,
ROCKY MOLTNTAIN POWER
Daniel E.
1407 WestNorth Temple, Suite 320
Salt Lake City, Utah 84116
Telephone No. [phone]
Facsimile No. [phone]
E-mail: [e-mail]
Attorneyfor Roclqt Mountain Power
Page 6
EXECUTION VERSION
POWER PURCHASE AGREEMENT
BETWEEN
THE CITY OF PRESTON,IDAHO
AND
PACIFICORP
TABLE OF CONTENTS
4.1 Purchase and Sale
4.2 No Sales to Third Parties
4.3 Minimum Annual Delivery....
4.4 Title and Risk of Loss of Net Output...
4.5 Curtailment
4.6 PacifiCorpasMerchant.................
4.7 RenewableEnergyCredits.......
Section 5 CONTRACT PRICE; COSTS
5.1 Contract Price; Includes Capacity Rights
5.2 Costs and Charges.....
5.3 Station Service
5.4 Taxes
5.5 Costs of Ownership and Operation
5.6 Rates Not Subject to Review.........
Section 6 OPERATION AI\D CONTROL..
6.1 Standard of Facility Operation.
6.2 Interconnection ...........
6.3 CoordinationwithSystem...........
6.4 Outages
Section I DEFINITIONS, RULES OF INTERPRETATION
l.l Defined Terms
1.2 Rules of Interpretation
Section 2 TERM; MILESTONES.........
2.1 EffectiveDate...................
Section 3 REPRESENTATIONS AND WARRANTIES
3.1 Mutual Representations and Warranties
3.2 Seller's Further Representations and Warranties
3.3 No Other Representations or Warranties
3.4 Continuing Nature of Representations and Warranties; Notice......
Section 4 DELMRIES OF NET OUTPUT.
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Page
TABLE OF CONTENTS
(continued)
6.6 lncrease in Nameplate Capacity Rating;New Project Expansion or
Development ...............
6.7 DedicatedCommunicationCircuit
6.8 Reports and Records
6.9 Financial and Accounting Information
6.10 AccessRights........
6.1I FacilityImages.......
Section 7 QUALIFYING FACILITY STATUS
7.1 Seller's QF Status
7.2 QF Facility
Section 8 SECURITY AND CREDIT SUPPORT
8.1 Representations and Warranties in Lieu of Security.
8.2 Default Security
8.3 Retum of Default Security
8.4 Levelized Security
8.5 Security is Not a Limit on Seller's Liability
Section 9 METERING............
9.1 Installation of Metering Equipment.
9.2 Metering....
9.3 Inspection, Testing, Repair and Replacement of Meters
9.4 MeteringCosts.........
9.5 MeterData..........
9.6 WREGISMetering....
Section 10 BILLINGS, COMPUTATIONS AND PAYMENTS................
l0.l Monthly Invoices
10.2 Offsets
10.3 Interest on Late Payments
10.4 Disputed Amounts
10.5 Audit Rights
Section 11 DEFAULTS AND REMEDIES................
I l.l Defaults
11.2 Remedies for Failure to Deliver/Receive........
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TABLE OF CONTENTS
(continued)Page
I 1.3 Termination and Remedies ..................28
ll.4 Termination of Duty to Buy....... .................29
11.5 Termination Damages... ...........29
11.6 Duty/Right to Mitigate. ............29
ll.7 Security .................30
I1.8 Cumulative Remedies ..............30
Section 12 INDEMNIFICATION AI\D LIA8ILITY............... ..........30
12.1 Indemnities ................. 30
13.1 Required Policies and Coverages
Section 14 FORCE MAJEURE 31
l4.l Definition of Force Majeure .......................31
14.2 Suspension of Performance...
......... 3 I
14.3 Force Majeure Does Not Affect Other Obligations
14.4 Strikes
14.5 Right to Terminate
Section I 5 SEVERAL OBLIGATIONS................
Section 16 CHOICE OF LAW.........
Section 17 PARTIAL INVALIDITY........
Section 18 NON-WAMR.....
Section 19 GOVERNMENTAL JURISDICTION AND AUTHORIZATIONS
Section 20 SUCCESSORS Al[D ASSIGNS..........
20.1 Restriction on Assignments
20.2 PermittedAssignments
Section 21 ENTIRE AGREEMENT .........
Section 22 NOTICES.............
22J Addresses and Delivery Methods...
22.2 Changes of Address
Section 23 CONFIDENTIALITY
23.1 ConfidentialBusinesslnformation
23.2 Duty to Maintain Confidentiality.............
23.3 PacifiCorp RegulatoryCompliance
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TABLE OF CONTENTS
24.1
24.2
24.3
24.4
(continued)Page
23.4 Irreparable Injury; Remedies
23.5 News Releases and Publicity...................
Section 24 DISAGREEMENTS................
Negotiations ................
Place of Contract Formation; Choice of Forum
Settlement Discussions
Waiver of Jury Trial..........
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Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
EXHIBITS
Estimated Monthly Output
Description of Seller's Facility
Seller's Interconnection Facilities
Required Facility Documents
Leases
Contract Price
Levelized Security
Seller Authorization to Release Generation Data to PacifiCorp
Required Insurance
NERC Event Types
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POWER PURCHASE AGREEMENT
THIS POWER PURCHASE AGREEMENT (this "Agreement"), is entered into between
the City of Preston, a municipal corporation located in the State of Idaho (the "Seller") and
PacifiCorp, an Oregon corporation acting in its merchant function capacity ("PacifiCorp").
Seller and PacifiCorp are sometimes hereinafter referred to collectively as the "Parties" and
individually as a "Party."
RECITALS
A. Seller owns, operates and maintains a hydro-electric power plant located in
Franklin County, Idaho with a nameplate capacity rating of 400 KW (the "Facility"); and
B. Seller operates the Facility as a Qualifying Facility ("QF"); and
C. Seller expects that the Facility will deliver to PacifiCorp 2,873,000 KWh of Net
Output each year of operation. Seller estimates that the Net Output will be delivered during each
calendar year according to the estimates of monthly output set forth in Exhibit A. Seller
acknowledges that PacifiCorp will include this amount of energy in PacifiCorp's resource
planning;and
D. Seller desires to sell, and PacifiCorp agrees to purchase, the Net Output delivered
by the Facility in accordance with the terms and conditions hereof; and
E. The rates, terms and conditions in this Agreement are in accordance with the
rates, terms, and conditions approved by the Commission for purchases from Qualifying
Facilities; and
F. PacifiCorp intends to designate Seller's Facility as a Network Resource for the
purposes of serving network load.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises set forth
below and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties mutually agree as follows:
SECTION 1
DEFINITIONS, RULES OF INTERPRETATION
l.l Defined Terms. Unless otherwise required by the context in which any term
appears, initially capitalized terms used herein shall have the following meanings:
"Abandonment" means the relinquishment of all possession and control of the
Facility by Seller, other than pursuant to a transfer permitted under this Agreement.
"Affiliate" means, with respect to any entity, each entity that directly or indirectly
controls, is controlled by, or is under common control with, such designated entity, with
"control" meaning the possession, directly or indirectly, of the power to direct management and
I
policies, whether through the ownership of voting securities or by contract or otherwise.
Notrrrithstanding the foregoing, with respect to PacifiCorp, Affiliate shall only include Berkshire
Hathaway Energy Company and its direct, wholly owned subsidiaries.
"Agreement" is defined in the Recitals.
"Business Day" means any day on which banks in Salt Lake City, Utah, are not
authorized or required by Requirements of Law to be closed, beginning at 6:00 a.m. and ending
at 5:00 p.m. localtime in Utah.
"Capacity Rights" means any current or future defined characteristic, certificate,
tag, credit, ancillary service or attribute thereof, or accounting construct, including any of the
same counted towards any current or future resource adequacy or reserve requirements,
associated with the electric generation capability and capacity of the Facility or the Facility's
capability and ability to produce energy. Capacity Rights are measured in KW and do not
include any Tax Credits or other tax incentives existing now or in the future associated with the
construction, ownership or operation of the Facility.
o'Commission" means the Idaho Public Utilities Commission.
"Confidential Business Information" is defined in Section 23.1 .
"Contract Interest Rate" means the lesser of (a) the highest rate permitted under
Requirements of Law or (b) 200 basis points per annum plus the rate per annum equal to the
publicly announced prime rate or reference rate for commercial loans to large businesses in
effect from time to time quoted by Citibank, N.A. as its "prime rate." If a Citibank, N.A. 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 bank with $10 billion or more in
assets in New York City, N.Y., selected by the Party to whom interest is being paid.
"Contract Price" means the applicable price, expressed in $/MWh for Net Output
and Capacity Rights stated in Section 5.1.
"Contract Year" means any consecutive l2-month period during the Term,
commencing at 00:00 hours on the Effective Date or any of its anniversaries and ending at24:00
hours on the last day of such l2-month period.
"Credit Requirements" means a senior, unsecured long term debt rating (or
corporate rating if such debt rating is unavailable) of (a) BBB- or greater from S&P, or (b) Baa3
or greater form Moody's; provided that if (a) or (b) is not available, an equivalent rating as
determined by PacifiCorp through an internal process review and utilizing a proprietary credit
scoring model developed in conjunction with a third party.
"Default Security" is an amount equal to twenty five dollars ($25) per KW of the
Nameplate Capacity Rating.
"Effective Date" is defined in Section 2.1
2
"Electric System Authority" means each of NERC, WECC, WREGIS, an RTO, a
regional or sub-regional reliability council or authority, and any other similar council,
corporation , organization or body of recognized standing with respect to the operations of the
electric system in the WECC region, as such are applicable to the Seller or PacifiCorp.
"Environmental Auributes" 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. Environmental
Attributes include but are not limited to: (a) any avoided emissions of pollutants to the air, soil,
or water such as (subject to the foregoing) sulfur oxides (SOx), nitrogen oxides (NOx), carbon
monoxide (CO), and other pollutants; and (b) any avoided emissions of carbon dioxide (CO2),
methane (CH4), and other greenhouse gases (GHGs) that have been determined by the United
Nations Intergovernmental Panel on Climate Change or any Governmental Authority to
contribute to the actual or potential threat of altering the Earth's climate by trapping heat in the
atmosphere. Environmental Attributes do not include (i) Tax Credits or other tax incentives
existing now or in the future associated with the construction, ownership or operation of the
Facility, (ii) matters designated by PacifiCorp as sources of liability, or (iii) adverse wildlife or
environmental impacts.
"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 that the Premises will not be available or usable for the
purposes contemplated by this Agreement.
"Event of Default" is defined in Section I 1.1 .
"Expected Net Output" means 2,873,000 KWh of Net Output per Contract Year,
measured at the Point of Delivery.
"Facility" is defined in the Recitals and is more fully described in attached Exhibit
B and includes all equipment, devices, associated appurtenances owned, controlled, operated and
managed by Seller in connection with, or to facilitate, the production, generation, transmission,
delivery, or furnishing of electric energy by Seller to PacifiCorp and required to interconnect
with the System.
"FERC" means the Federal Energy Regulatory Commission.
"Firm Market Price Index" means (a) the average price reported by
Intercontinental Exchange, Inc. ("ICE") Day-Ahead Palo Verde On-Peak Index, for On-Peak
Hours, and (b) the average price reported on the ICE Day-Ahead Palo Verde Off-Peak Index, for
Off-Peak Hours. If either index is not available for a given period, for purposes of calculations
hereunder, the Firm Market Price Index shall be deemed to equal the volumetrically-weighted
average price derived from data published by ICE for the same number of days immediately
preceding and immediately succeeding the period in which the index in question was not
available, regardless of which days of the week are used for this purpose. If the Firm Market
Price Index or its replacement or any component of that index or its replacement ceases to be
J
published or available, or useful for its intended purpose hereunder, during the Term, the Parties
shall agree upon a replacement Firm Market Price Index or component that, after any necessary
adjustments, provides the most reasonable substitute quotation of the daily price of electricity for
the applicable periods.
"Force Majeure" is defined in Section 14.1.
"Forced Outage" means NERC Event Types Ul,U2 and U3, as set forth in
attached Exhibit J, and specifically excludes any Maintenance Outage or Planned Outage.
"Generation Interconnection Agreement" means the small generator
interconnection agreement entered into separately between Seller and Interconnection Provider
concerning the Interconnection Facilities.
"Govemmental Authority" means any supranational, federal, state or other
political subdivision thereof, having jurisdiction over Seller, PacifiCorp or this Agreement,
including any municipality, township or county, and any entity or body exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining to govemment,
including any corporation or other entity owned or controlled by any of the foregoing.
"Hazardous Materials" means any waste or other substance that is listed, defined,
designated or classified as or determined to be hazardous under or pursuant to any environmental
law or regulation.
"Indemnified Party" is defined in Section 6.1.2(b).
"Interconnection Facilities" means all the facilities installed for the purpose of
interconnecting the Facility to the System, including electrical transmission lines, upgrades,
transformers and associated equipment, substations, relay and switching equipment, and safety
equipment.
"Interconnection Provider" means PacifiCorp Transmission.
rrKlVrr means kilowatt.
"KWhrr means kilowatt hour.
"Lender" means an entity lending money or extending credit (including any
financing lease, monetization of tax benefits, transaction with a tax equity investor, backleverage
financing or credit derivative arangement) to Seller or Seller's Affiliates (a) for the construction,
term or permanent financing or refinancing of the Facility; (b) for working capital or other
ordinary business requirements for the Facility (including for the maintenance, repair,
replacement or improvement of the Facility); (c) for any development financing, bridge
financing, credit support, and related credit enhancement or interest rate, currency, weather, or
Environmental Attributes in connection with the development, construction or operation of the
Facility; or (d) for the purchase of the Facility and related rights from Seller.
4
"Letter of Credit" means an irrevocable standby letter of credit in a form
reasonably acceptable to PacifiCorp, naming PacifiCorp as the party entitled to demand payment
and present draw requests thereunder that:
(1) is issued by a Qualifying Institution;
(2) by its terms, permits PacifiCorp to draw up to the face amount thereof for
the purpose of paying any and all amounts owing by Seller hereunder;
(3) permits PacifiCorp to draw the entire amount available thereunder if such
letter of credit is not renewed or replaced at least thirty (30) Business Days prior to its stated
expiration date;
(4) permits PacifiCorp to draw the entire amount available thereunder if such
letter of credit is not increased or replaced as and when provided in Section 8;
(5) is transferable by PacifiCorp to any party to which PacifiCorp may assign
this Agreement; and
(6) shall remain in effect for at least ninety (90) days after the end of the
Term.
"Liabilities" is defined in Section l2.l.l.
"Maintenance Outage" means NERC Event Type MO, as set forth in attached
Exhibit J, and includes any outage involving ten percent (10%) of the Facility's Net Output that
is not a Forced Outage or a Planned Outage.
"Maximum Delivery Rate" means the maximum hourly rate of delivery of Net
Output in MWh from the Facility to the Point of Delivery, calculated on the basis of the Net
Output delivered in an hour accruing at an average rate equivalent to the actual Nameplate
Capacity Rating.
"Minimum Annual Delivery" is defined in Section 4.3.
"Moody's" means Moody's Investor Services, Inc.
"Mountain Prevailing Time" or "MPT" means Mountain Standard Time or
Mountain Daylight Time, as applicable in Utah on the day in question.
rrMlvrr means megawatt.
"MWh" means megawatt hour
"Nameplate Capacity Rating" means the maximum installed instantaneous
generation capacity of the Facility, expressed in MW (AC), when operated in compliance with
the Generation Interconnection Agreement and consistent with the recommended power factor
5
and operating parameters provided by the manufacturer of the generator, as set forth in a notice
from Seller to PacifiCorp.
"NERC" means the North American Electric Reliability Corporation.
"Net Output" means all energy and capacity produced by the Facility, less station
use and less transformation and transmission losses and other adjustments (e.g., Seller's load
other than station use), 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.
"Network Resource" is defined in the Tariff.
"Network Service Provider" means PacifiCorp Transmission, as a provider of
network service to PacifiCorp under the Tariff.
"Off-Peak Hours" means all hours ending 01:00:00 through 06:00:00 and hours
ending 23:00:00 through 24:00:00, MPT, Monday through Saturday and hours ending 0l:00:00
through 24:00:00, MPT, on Sundays and NERC designated holidays.
"On-Peak Hours" means all hours ending 07:00:00 through 22:00:00 MMPT,
Monday through Saturday, excluding NERC designated holidays.
"Output" means all energy produced by the Facility.
"PacifiCorp" is defined in the Recitals, and explicitly excludes PacifiCorp
Transmission.
"PacifiCorp Indemnitees" is defined in Section l2.l.l
"PacifiCorp Representatives" is defined in Section 6.1L
"PacifiCorp Transmission" means PacifiCorp, an Oregon corporation, acting in its
interconnection or transmission function capacity.
"PacifiCorp's Cost to Cover" means the positive difference, if any, between (a) the
time weighted average of the Firm Market Price Index for each day for which the determination
is being made, and (b) the Contract Price specified in Exhibit F in effect on such days, stated as
an amount per MWh. If on a given day (or Contract Year in the case of calculations for the
failure to meet the Minimum Annual Delivery) the difference between (a) minus (b) referenced
above is zero or negative, then PacifiCorp's Cost to Cover shall be zero dollars ($0), and Seller
shall have no obligation to pay any amount to PacifiCorp on account of Section I 1 .2.1 with
respect to such day (or Contract Year in the case of calculations for the failure to meet the
Minimum Annual Delivery).
"Party" and "Parties" are defined in the Recitals.
"Permits" means the permits, licenses, approvals, certificates, entitlements and
other authorizations issued by Governmental Authorities required for the ownership or operation
6
of the Facility or occupancy of the Premises, and all amendments, modifications, supplements,
general conditions and addenda thereto.
"Planned Outage" means NERC Event Type PO, as set forth in attached Exhibit J,
and specifically excludes any Maintenance Outage or Forced Outage.
"Point of Delivery" means the point of interconnection between the Facility and
the System, as specified in the Generation Interconnection Agreement and as further described in
Exhibit C.
"Premises" means the real property on which the Facility is located, as more fully
described on Exhibit B.
"Prudent Electrical Practices" means any of the practices, methods and acts
engaged in or approved by a significant portion of the independent electric power generation
industry for facilities of similar size and characteristics 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.
"PURPA" means the Public Utility Regulatory Policies Act of 1978.
"QF" means "Qualifying Facility," as that term is defined in the FERC regulations
(codified at l8 CFR Part292) in effect on the Effective Date.
"Qualifying Institution" means a United States commercial bank or trust company
organized under the laws of the United States of America or a political subdivision thereof
having assets of at least $ 10,000,000,000 (net of reserves) and a credit rating on its long-term
senior unsecured debt of at least "A" from S&P and "A2" from Moody's.
"Required Facility Documents" means the Permits and other authorizations, rights
and agreements now or hereafter necessary for ownership, operation, and maintenance of the
Facility, and to deliver the Net Output to PacifiCorp in accordance with this Agreement and
Requirements of Law, including those set forth in Exhibit D.
"Requirements of Law" means any applicable and mandatory (but not merely
advisory) federal, state and local law, statute, regulation, rule, action, order, code or ordinance
enacted, adopted, issued or promulgated by any federal, state, local or other Governmental
Authority or regulatory body (including those pertaining to electrical, building, zoning,
environmental and wildlife protection and occupational safety and health).
''RTO" means any entity (including an independent system operator) that becomes
responsible as system operator for, or directs the operation of, the System.
"S&P" means Standard & Poor's Rating Group (a division of S&P Global, Inc.).
"Seller" is defined in the Recitals.
7
"Seller Indemnitees" is defined in Section 12.1.2
"Seller's Cost to Cover" means the positive difference, if any, between (a) the
Contract Price per MWh specified in Exhibit F, and (b) the net proceeds per MWh actually
realized by Seller from the sale to a third party of Net Output not purchased by PacifiCorp as
required hereunder. If on any given day the difference between (a) minus (b) referenced above is
zero or negative, then Seller's Cost to Cover shall be zero dollars with respect to such day, and
PacifiCorp shall have no obligation to pay any amount to Seller on account of Section 11.2.2.
For any days prior to the Commercial Operation Date, the Contract Price applicable in the first
Contract Year shall be utilized for purposes of clause (a).
"Seller Uncontrollable Minutes" means, for the Facility in any Contract Year, the
total number of minutes during such Contract Year during which the Facility was unable to
deliver Net Output to PacifiCorp (or during which PacifiCorp failed to accept such delivery) due
to one or more of the following events, each as recorded by Seller's SCADA and indicated by
Seller's electronic fault log: (a) an emergency or Force Majeure event; (b) to the extent not
caused by Seller's actions or omissions, a curtailment in accordance with Section 4.5@); (c)
Planned Outages, but in no event exceeding 36 hours per Contract Year consistent with such
operating manual; and (d) a default by PacifiCorp; provided, however, that if any of the events
described above in items (a) through (d) occur simultaneously, then the relevant period of time
shall only be counted once in order to prevent double counting. Seller Uncontrollable Minutes
shall not include minutes when (i) the Facility or any portion thereof was unavailable solely due
to Seller's non-conformance with the Generation Interconnection Agreement or (ii) the Facility
or any portion thereof was paused or withdrawn from use by Seller for reasons other than those
covered in this definition.
"System" means the electric transmission substation and transmission or
distribution facilities owned, operated or maintained by Transmission Provider, which shall
include the circuit reinforcements, extensions, and associated terminal facility reinforcements or
additions required to interconnect the Facility, all as set forth in the Generation lnterconnection
Agreement.
"Tariff'means the PacifiCorp FERC Electric Tariff Volume No. I I Open Access
Transmission Tariff, as revised from time to time.
"Tax Credits" means any state, local and/or federal production tax credit, tax
deduction, and/or investment tax credit specific to the production of renewable energy and/or
investments in renewable energy facilities.
"Term" is defined in Section 2.1.
"Transmission Provider" means PacifiCorp Transmission, including the Grid
Operations business unit.
"Transmission Service" means, if applicable, the transmission services pursuant to
which the Transmission Provider transmits Output to the Point of Delivery, as applicable.
"WECC" means the Western Electricity Coordinating Council.
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1.2 Rules of Interpretation.
1.2.1 General. Unless otherwise required by the context in which any term
appears, (a) the singular includes the plural and vice versa; (b) references to "Articles,"
"Sections," "Schedules," "Annexes," "Appendices" or "Exhibits" are to articles, sections,
schedules, annexes, appendices or exhibits hereof; (c) all references to a particular entity or an
electricity market price index include a reference to such entity's or index's successors; (d)
"herein," "hereof' and "hereunder" refer to this Agreement as a whole; (e) all accounting terms
not specifically defined herein shall be construed in accordance with generally accepted
accounting principles, consistently applied; (f) the masculine includes the feminine and neuter
and vice versa; (g) "including" means "including, without limitation" or "including, but not
limited to"; (h) all references to a particular law or statute mean that law or statute as amended
from time to time; (i) all references to energy or capacity are to be interpreted as utilizing
alternating current, unless expressly stated otherwise; and O the word "or" is not necessarily
exclusive. Reference to "days" shall be calendar days, unless expressly stated otherwise herein
1.2.2 Terms Not to be Construed For or Against Either Party. Each term
hereof shall be construed according to its fair meaning and not strictly for or against either Party.
The Parties have jointly prepared this Agreement, and no term hereof shall be construed against a
Party on the ground that the Party is the author of that provision.
1.2.3 Headings. The headings used for the sections and articles hereof are for
convenience and reference purposes only and shall in no way affect the meaning or interpretation
of the provisions hereof.
1.2.4 Interpretation with FERC Orders. Each Party conducts and shall conduct
its operations in a manner intended to comply with FERC Order No. 717, Standards of Conduct
for Transmission Providers, and its companion orders, requiring the separation of its
transmission and merchant functions. Moreover, the Parties acknowledge that Interconnection
Provider's transmission function offers transmission service on its system in a manner intended
to comply with FERC policies and requirements relating to the provision of open-access
transmission service. Seller expressly recognizes that, for purposes hereof, the lnterconnection
Provider and Transmission Provider each shall be deemed to be a separate entity and separate
contracting party from PacifiCorp whether or not the Generation Interconnection Agreement is
entered into with Interconnection Provider or an Affiliate thereof. Seller acknowledges that
PacifiCorp, acting in its merchant capacity function as purchaser hereunder, has no responsibility
for or control over Interconnection Provider or Transmission Provider, and is not liable for any
breach of agreement or duty by Interconnection Provider or Transmission Provider.
SECTION 2
EFFECTIVE DATE; TERM
2.1 Effective Date & Term. This Agreement shall become effective upon approval by
the Commission; provided, however, this Agreement shall not become effective until the
Commission has determined, pursuant to a final 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
9
Commission will allow PacifiCorp to recover in rates in Idaho in the event other jurisdictions
deny recovery of their proportionate share of said expenses (the "Effective Date").
Unless earlier terminated as provided herein, the Agreement shall remain in effect for a term of
20 years from the Effective Date ("Term").
SECTION 3
REPRESENTATIONS AND WARRANTIES
3.,1 Mutual Representations and Warranties. Each Party represents, covenants, and
warrants to the other that:
3.1.1 Organization. It is duly organized and validly existing under the laws of
the State of its organization.
3.1.2 Authority. It has the requisite power and authority to enter this
Agreement and to perform according to the terms hereof.
3.1.3 Corporate Actions. It has taken all corporate actions required to be taken
by it to authorize the execution, delivery and performance hereof and the consummation of the
transactions contemplated hereby.
3.1.4 No Contravention. The execution and delivery hereof does not
contravene any provision of, or constitute a default under, any indenture, mortgage, security
instrument or undertaking, or other material agreement to which it is a party or by which it is
bound, or any valid order of any court, or any regulatory agency or other Govemmental
Authority having authority to which it is subject.
3.1.5 Valid and Enforceable Aereement. This Agreement is a valid and
legally binding obligation of it, enforceable against it in accordance with its terms, except as the
enforceability hereof may be limited by general principles of equity or bankruptcy, insolvency,
bank moratorium or similar laws affecting creditors' rights generally and laws restricting the
availability of equitable remedies.
3.1.6 Litigation. No litigation, arbitration, investigation or other proceeding is
pending or, to the best of either Party's knowledge, threatened in writing against either Party or
its members, with respect hereto and the transactions contemplated hereunder. No other
investigation or proceeding is pending or threatened in writing against aParty, its members, or
any Affiliate, the effect of which would materially and adversely affect the Party's performance
of its obligations hereunder.
3.2 Seller's Further Representations and Warranties. Seller further represents,
covenants, and warrants to PacifiCorp that:
3.2.1 Authoritv. Seller (a) has all required regulatory authority to make
wholesale sales from the Facility; (b) has the power and authority to own and operate the Facility
and be present upon the Premises for the Term; and (c) is duly qualified and in good standing
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under the laws of each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification.
3.2.2 No Contravention. The execution, delivery, performance and
observance by Seller of its obligations hereunder do not and will not:
(a) contravene, conflict with or violate any provision of any material
Requirements of Law presently in effect having applicability to either Seller or any of Seller's
members;
(b) require the consent or approval of or material filing or registration
with any Governmental Authority or other person other than such consents and approvals which
are (i) set forth in Exhibit D;
(c) result in a breach of or constitute a default under any provision of
any security issued by any of Seller's members or managers, the effect of which would materially
and adversely affect Seller's performance of, or ability to perform, its obligations hereunder, or
any material agreement, instrument or undertaking to which either Seller's members or any
Affiliates of Seller's members is a party or by which the property of any of Seller's members or
any Affiliates of Seller's members is bound, the effect of which would materially and adversely
affect Seller's performance of, or ability to perform, its obligations hereunder.
3.2.3 Required Facility Documents. All Required Facility Documents are
listed on Exhibit D. Seller holds as of the Effective Date and will maintain for the Term all
Required Facility Documents. The use of the Facility complies with all applicable restrictive
covenants affecting the Premises. Seller shall promptly notify PacifiCorp of any additional
Required Facility Documents.
3.2.4 Delivery of Energv. Seller holds rights sufficient to enable Seller to
deliver Net Output at the Nameplate Capacity Rating from the Facility to the Point of Delivery
pursuant to this Agreement throughout the Term.
3.2.5 Controlof Premises. Seller has all le,gal rights necessary for the Seller to
enter upon and occupy the Premises for the purpose of operating and maintaining the Facility for
the Term. All leases of real property required for the operation of the Facility or the performance
of any obligations of Seller hereunder are set forth and accurately described in Exhibit E. Seller
shall maintain all leases or other land grants necessary for the operation and maintenance of the
Facility as valid for the Term. Upon request by PacifiCorp, Seller shall provide copies of the
memoranda of lease recorded in connection with the development of the Facility.
3.2.6 Undertaking of Agreement: Professionals and Experts. Seller has engaged
those professional or other experts it believes necessary to understand its rights and obligations
pursuant to this Agreement. All professionals or experts including engineers, attorneys or
accountants, that Seller may have consulted or relied on in undertaking the transactions
contemplated by this Agreement have been solely those of Seller.
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3.2.7 Verification. All information relating to the Facility, its operation and
output provided to PacifiCorp and contained in this Agreement has been verified by Seller and is
true and accurate.
3.3 No Other Representations or Warranties. Each Party acknowledges that it has
entered hereinto in reliance upon only the representations and warranties set forth in this
Agreement, and that no other representations or warranties have been made by the other Party
with respect to the subject matter hereof.
3.4 Continuine Nature of Representations and Warranties: Notice. The
representations and warranties set forth in this section are made as of the Effective Date. If at
any time during the Term, the Seller obtains actual knowledge of any event or information that
would have caused any of the representations and warranties in this Section 3 to be materially
untrue or misleading at the time given, such Party shall provide the other Party with written
notice of the event or information, the representations and warranties affected, and the action, if
any, which such Party intends to take to make the representations and warranties true and
correct. If at any time the Seller obtains actual knowledge that the representations and warranties
in this Sections 3 are not true, Seller shall provide written notice to PacifiCorp. The notice
required pursuant to this section shall be given as soon as practicable after the occurrence ofeach
such event.
SECTION 4
DELIVERIES OF NET OUTPUT
4.1 Purchase and Sale. Except as otherwise expressly provided herein, commencing
on the Effective Date and continuing through the Term, Seller shall sell and make available to
PacifiCorp, and PacifiCorp shall purchase and receive the entire Net Output from the Facility at
the Point of Delivery. PacifiCorp shall be under no obligation to make any purchase hereunder
other than Net Output, as described above. PacifiCorp shall not be obligated to purchase, receive
or pay for Net Output that is not delivered to the Point of Delivery.
4.2 No Sales to Third Parties. During the Term, Seller shall not sell any Net Output,
energy, or Capacity Rights from the Facility to any party other than PacifiCorp.
4.3 Minimum Annual Delivery. Seller shall make available from the Facility a
minimum of 1,500,000 KWh of Net Output during each Contract Year ("Minimum Annual
Delivery"), provided that such minimum for the first Contract Year (if less than a full calendar
year) shall be reduced pro rata to reflect the Effective Date, and provided further that such
minimum Net Output shall be reduced pro rata to reflect any periods during a Contract Year that
the Facility was prevented from generating electricity during periods constituting Seller
Uncontrollable Minutes.
4.4 Title and Risk of Loss of Net Output. Seller shall deliver Net Output to the Point
of Delivery and Capacity Rights free and clear of all liens, claims and encumbrances. Title to
and risk of loss of all Net Output shall transfer from Seller to PacifiCo1p upon its delivery to
PacifiCorp at the Point of Delivery. Seller shall be deemed to be in exclusive control of, and
responsible for, any damage or injury caused by, all Output up to and at the Point of Delivery.
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PacifiCorp shall be deemed to be in exclusive control of, and responsible for, any damages or
injury caused by, Net Output after the Point of Delivery.
4.5 Curtailment. PacifiCorp shall not be obligated to purchase, receive, pay for, or
pay any damages associated with, Net Output if such Net Output 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 intemrpted, in whole or in part, consistent with the
terms of the Generation Interconnection Agreement, (b) the Transmission 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 and no matter how such
curtailment 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
any way in order to meet its obligations to the Transmission Provider or Network Service
Provider to operate within system limitations or otherwise, (c) the Facility's Output is not
received because the Facility is not fully integrated or synchronized with the System, or (d) an
event of Force Majeure prevents either Party from delivering or receiving Net Output. Seller
shall reasonably determine the MWh amount of Net Output curtailed pursuant to this Section 4.5
after the fact based on the amount of energy that could have been generated at the Facility and
delivered to PacifiCorp as Net Output but that was not generated and delivered because of the
curtailment. Seller shall determine the quantity of such curtailed energy based on the time and
duration of the curtailment period. Seller shall promptly provide PacifiCorp with access to such
information and data as PacifiCorp may reasonably require to confirm to its reasonable
satisfaction the amount of energy that was not generated or delivered because of a curtailment
described in this Section 4.5.
4.6 PacifiCorp as Merchant. Seller acknowledges that PacifiCorp, acting in its
merchant capacity function as purchaser under this Agreement, has no responsibility for or
control over PacifiCorp Transmission or any successor Transmission Provider.
4.7 Renewable Energy Credits. Seller maintains ownership of any commercially
transferrable or tradeable renewable energy credits associated with the Output.
4.8 Purchase and Sale of Capacit), Rights. For and in consideration olPacifiCorp's
agreement to purchase from Seller the Facility's Net Output on the terms and conditions set forth
herein, Seller transfers to PacifiCorp, and PacifiCorp accepts from Seller, any right, title, and
interest that Seller may have in and to Capacity Rights, if any, existing during the Term.
4.9 Representation Regardine Ownership of Capacity Riehts. Seller represents that it
has not sold, and covenants that during the Term it will not sell or attempt to sell to any other
person or entity the Capacity Rights, if any. During the Term, Seller shall not report to any
person or entity that the Capacity Rights, if any, belong to anyone other than PacifiCorp.
PacifiCorp may at its own risk and expense report to any person or entity that Capacity Rights
exclusively belong to it.
4.10 Further Assurances. At PacifiCorp's request, the Parties shall execute such
documents and instruments as may be reasonably required to effect recognition and transfer of
the Net Output or Capacity Rights, if any, to PacifiCorp.
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SECTION 5
CONTRACT PRICE; COSTS
5.1 Contract Price: Includes Caoacitv Rishts. Beginning on the Effective Date,
PacifiCorp shall pay Seller the Contract Price per MWh of Net Output delivered to the Point of
Delivery, as specified in Exhibit F, up to the Maximum Delivery Rate. Seller shall not be
entitled to any compensation over and above the Contract Price for any Net Output or Capacity
Rights associated therewith.
5.2 Costs and Charges. Seller shall be responsible for paying or satisfying when due
all costs or charges imposed in connection with the scheduling and delivery of Net Output up to
and at the Point of Delivery, including transmission costs, Transmission Service, and
transmission line losses, and any operation and maintenance charges imposed by Interconnection
Provider and Transmission Provider for the Interconnection Facilities. PacifiCorp shall be
responsible for all costs or charges, if any, imposed in connection with the delivery of Net
Output at and from the Point of Delivery, including transmission costs and transmission line
losses and imbalance charges or penalties. Without limiting the generality of the foregoing,
Seller, in accordance with the Generation Interconnection Agreement, shall bear all costs
associated with the modifications to Interconnection Facilities or the System (including System
upgrades) caused by or related to (a) the interconnection of the Facility with the System and (b)
any increase in generating capacity of the Facility.
5.3 Station Service. Seller shall be responsible for arranging and obtaining, at its sole
risk and expense, any station service required by the Facility that is not provided by the Facility
itself.
5.4 Taxes. Seller shallpay or cause to be paid when due, or reimburse PacifiCorp for,
all existing and any new sales, use, excise, severance, ad valorem, and any other similar taxes,
imposed or levied by any Governmental Authority on the Net Output or Capacity Rights up to
and including, but not beyond, the Point of Delivery, regardless of whether such taxes are
imposed on PacifiCorp or Seller under Requirements of Law. PacifiCorp shall pay or cause to
be paid when due all such taxes imposed or levied by any Governmental Authority on the Net
Output or Capacity Rights beyond the Point of Delivery, regardless of whether such taxes are
imposed on PacifiCorp or Seller under Requirements of Law. The Contract Price shall not be
adjusted on the basis of any action of any Governmental Authority with respect to changes to or
revocations of sales and use tax benefits, rebates, exception or give back. In the event any taxes
are imposed on a Party for which the other Party is responsible hereunder, the Party on which the
taxes are imposed shall promptly provide the other Party notice thereof and such other
information as such Party may reasonably request with respect to any such taxes.
5.5 Costs of Ownership and Operation. Without limiting the generality of any other
provision hereof and subject to Section 5.4, Seller shall be solely responsible for paying when
due (a) all costs of owning and operating the Facility in compliance with existing and future
Requirements of Law and the terms and conditions hereof, and (b) all taxes and charges
(however characterized) now existing or hereinafter imposed on or with respect to the Facility,
its operation, or on or with respect to emissions or other environmental impacts of the Facility,
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including any such tax or charge (however characterized) to the extent payable by a generator of
such energy or Environmental Attributes.
5.6 Rates Not Subject to Review. The rates for service specified herein shall remain
in effect until expiration of the Term, and shall not be subject to change for any reason, including
regulatory review, absent agreement of the parties. Neither Party shall petition FERC pursuant
to the provisions of Sections 205 or 206 of the Federal Power Act (16 U.S.C. $ 792 et seq.) to
amend such prices or terms, or support a petition by any other person seeking to amend such
prices or terms, absent the agreement in writing of the other Party. Further, absent the agreement
in writing by both Parties, the standard of review for changes hereto proposed by a Party, a non-
party or the FERC acting sua sponte shall be the "public interest" application of the "just and
reasonable" standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service
Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350
U.S. 348 (1956) and clarified by Morgan Stanley Capital Group. Inc. v. Public Util. Dist. No. I
of Snohomish, 554 U.S. 527,128 S. Ct.2733 (2008).
SECTION 6
OPERATION AI\ID CONTROL
6.1 Standard of Facility Operation.
6.1.2 Fines and Penalties
(a) Without limiting a Party's rights under Section 6.1.2(b), each Party
shall pay all fines and penalties incurred by such Party on account of noncompliance by such
Party with Requirements of Law in respect to this Agreement, except where such fines and
penalties are being contested in good faith through appropriate proceedings.
(b) Iffines, penalties, or legal costs are assessed against or incurred by
either Party (the "lndemnified Party") on account of any action by any Governmental Authority
due to noncompliance by the other Party (the "Indemnifying Party") with any Requirements of
Law or the provisions hereof, or if the performance of the Indemnifying Party is delayed or
stopped by order of any Governmental Authority due to the Indemnifying Party's noncompliance
with any Requirements of Law, the Indemnifying Party shall indemnify and hold harmless the
Indemnified Party against any and all Liabilities suffered or incurred by the Indemnified Party as
a result thereof. Without limiting the generality of the foregoing, the Indemnifying Party shall
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6.1.1 General. At Seller's sole cost and expense, Seller shalloperate, maintain
and repair the Facility and the Interconnection Facilities in accordance with (a) the applicable
and mandatory standards, criteria and formal guidelines of FERC, NERC, any RTO, and any
other Electric System Authority and any successors to the functions thereof; (b) the Permits and
Required Facility Documents; (c) the Generation Interconnection Agreement; (d) all
Requirements of Law; (e) the requirements hereof; and (f) Prudent Electrical Practice. Seller
acknowledges that it shall have no claims hereunder against PacifiCorp with respect to any
requirements imposed by or damages caused by (or allegedly caused by) the Transmission
Provider. Seller will have no claims against PacifiCorp under this Agreement with respect to the
provision of station service.
reimburse the Indemnified Party for all fees, damages, or penalties imposed on the lndemnified
Party by any Governmental Authority, other person or to other utilities for violations to the
extent caused by a default by the Indemnifying Party or a failure of performance by the
Indemnifying Party hereunder.
6.2 Interconnection. Seller is responsible for the costs and expenses associated with
maintaining interconnection service for the Facility at its Nameplate Capacity Rating at the Point
of Delivery. Seller shall have no claims hereunder against PacifiCorp, acting in its merchant
function capacity, with respect to any requirements imposed by or damages caused by (or
allegedly caused by) acts or omissions of the Transmission Provider or Interconnection Provider,
in connection with the Generation Interconnection Agreement or otherwise.
6.2.1 Preliminary Interconnection. Notwithstanding any other provision of this
Agreement to the contrary, for the period beginning on the Effective Date and ending on the
earlier of (i) the date a Generator Interconnection Agreement is obtained by Seller from
Interconnection Provider with respect to the Facility or (ii) December 31,2018, the Parties agree
that the interconnection-related provisions of that certain Power Purchase Agreement between
Seller and PacifiCorp, dated February 24,1982, as amended (the "Original PPA"), shall apply to
and be incorporated by reference into this Agreement. If a Generator Interconnection Agreement
is not obtained and in effect by December 31, 2018, this Agreement shall terminate with no
further action required by either Party. After a Generator Interconnection Agreement is in place
with respect to the Facility as provided in this Section 6.2.1, the interconnection-related
provisions of the Original PPA shall no longer be in effect.
6.3 Coordination with System. Seller shall be responsible for the coordination and
synchronization of the Facility and the Interconnection Facilities with the System.
6.4 Outages.
6.4.1 Planned Outages. Except as otherwise provided herein, Seller shall not
schedule a Planned Outage during any portion of the months of December, January, July, and
August, except to the extent a Planned Outage is reasonably required to enable a vendor to
satisfy a guarantee requirement. Seller shall provide PacifiCorp with an annual forecast of
Planned Outages for each Contract Year at least one month, but no more than three 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 Prudent Electrical Practices. Seller shall not schedule any maintenance of Interconnection
Facilities during such months, without the prior written approval of PacifiCorp, which approval
shall not be unreasonably withheld or delayed.
6.4.2 Maintenance Outages. If Seller reasonably determines 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 days before the outage
begins. Upon such notice, the Parties shall plan the Maintenance Outage to mutually
accommodate the reasonable requirements of Seller and the service obligations of PacifiCorp;
provided, however, that Seller shall take all reasonable measures consistent with Prudent
Electrical Practices to not schedule any Maintenance Outage during the following periods: June
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l5 through June 30, July, August, and September I through September 15. Notice of a proposed
Maintenance Outage shall include the expected start date and time of the outage, the amount of
generation capacity of the Facility that will not be available, and the expected completion date
and time of the outage. Seller shall give PacifiCorp notice of the Maintenance Outage as soon as
practicable after Seller determines that the Maintenance Outage is necessary. 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 any request to modify the
schedule for a Maintenance Outage provided that such change has no substantial impact on
Seller. Seller shall notify PacifiCorp of any subsequent changes in generation capacity available
to PacifiCorp as a result of such Maintenance Outage or any changes in the Maintenance Outage
completion date and time. As soon as practicable, any notifications given orally shall be
confirmed in writing. Seller shall take all reasonable measures consistent with Prudent Electrical
Practices to minimize the frequency and duration of Maintenance Outages.
6.4.3 Forced Outages. Seller shall promptly provide to PacifiCorp an oral
report, via telephone to a number specified by PacifiCorp (or other method approved by
PacifiCorp), of any Forced Outage resulting in more than ten percent (10%) of the Nameplate
Capacity Rating of the Facility being unavailable. This report shall include the amount of the
generation capacity of the Facility that will not be available because of the Forced Outage and
the expected return date of such generation capacity. Seller shall promptly update the report as
necessary to advise PacifiCorp of changed circumstances. As soon as practicable, the oral report
shall be confirmed in writing by notice to PacifiCorp. Seller shall take all reasonable measures
consistent with Prudent Electrical Practices to avoid Forced Outages and to minimize their
duration.
6.4.4 Notice of Deratings and Outages. Without limiting the foregoing, Seller
will inform PacifiCorp, via telephone to a number specified by PacifiCorp (or other method
approved by PacifiCorp), of any major limitations, restrictions, deratings or outages known to
Seller affecting the Facility for the following day (except for curtailments pursuant to Section
4.5(b)) and will promptly update Seller's notice to the extent of any material changes in this
information, with "major" defined as affecting more than five percent (5%) of the Nameplate
Capacity Rating of the Facility.
6.4.5 Effect of Outases on Estimated Output.Seller represents and warrants
that the estimated monthly Net Output set forth on Exhibit A takes into account the Planned
Outages, Maintenance Outages, and Forced Outages that Seller reasonably expects to encounter
in the ordinary course of operating the Facility.
6.5 Scheduling.
6.5.1 Cooperation and Standards. With respect to any and all scheduling
requirements hereunder, (a) Seller shall cooperate with PacifiCorp with respect to scheduling Net
Output, and (b) each Party shall designate authorized representatives to communicate with regard
to scheduling and related matters arising hereunder. Each Party shall comply with the applicable
variable resource standards and criteria of any applicable Electric System Authority.
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6.5.2 ScheduleCoordination.If, as a result hereof, PacifiCorp is deemed by
an RTO to be financially responsible for Seller's performance under the Generation
Interconnection Agreement, due to Seller's lack of standing as a "scheduling coordinator" or
other RTO recognized designation, qualification or otherwise, then Seller shall acquire such
RTO recognized standing (or shall contract with a third party who has such RTO recognized
standing) such that PacifiCorp is no longer responsible for Seller's performance under the
Generation Interconnection Agreement or RTO requirement.
6.6 Increase in Nameplate Capacity Rating: New Project Expansion or Development.
Without limiting any restrictions herein on Nameplate Capacity Rating, if Seller elects to
increase, at its own expense, the ability of the Facility to deliver Net Output in quantities in
excess of the Maximum Delivery Rate through any means, including replacement or
modification of Facility equipment or related infrastructure, PacifiCorp shall not be required to
purchase any Net Output above the Maximum Delivery Rate. If Seller or any Affiliate elects to
build an expansion or additional project within one mile of the Facility (measured from the
nearest generation equipment at both locations), neither Seller nor any Affiliate will have the
ability to require PacifiCorp to purchase (and PacifiCorp shall have no obligation to purchase
pursuant to this Agreement) the output of any such expansion or additional facility. Seller
covenants that it will take all actions necessary to ensure that the immediately preceding sentence
(i) applies to Seller's direct and indirect parent affiliates, and (ii) will not be avoided through use
or establishment of a special purpose entity or other Affiliate. Any such expansion or additional
facility may not materially and adversely impact the ability of either Party to fulfill its
obligations pursuant hereto.
6.7 Dedicated Communication Circuit. Seller shall install a dedicated direct
communication circuit (which may be by common carrier telephone) between PacifiCorp and the
control center in the Facility's control room or such other communication equipment as the
Parties may agree.
6.8 Reports and Records.
6.8.1 Electronic Fault Log. Seller shall maintain an electronic fault log of
operations of the Facility during each hour of the Term commencing on the Effective Date.
Seller shall provide PacifiCorp with a copy of the electronic fault log within thirty (30) days after
the end of the calendar month to which the fault log applies.
6.8.2 Other Information to be Provided to PacifiCorp. Seller shall provide to
PacifiCorp the following information concerning the Facility:
(a) A report summarizing the results of maintenance performed during
each Maintenance Outage, Planned Outage, and any Forced Outage, and upon request of
PacifiCorp any of the technical data obtained in connection with such maintenance; and
(b) One year's advance notice of the termination or expiration of any
material agreement, including leases, pursuant to which the Facility or any material equipment
relating thereto is upon the Premises; provided that the foregoing does not authorize any early
termination of any land lease. In the event Seller has less than one year's advance notice of such
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termination or expiration, Seller shall provide the notice contemplated by this Section to
PacifiCorp within fifteen (15) Business Days of Seller obtaining knowledge of the termination or
expiration.
6.8.3 Information to Governmental Authorities. Seller shall, promptly upon
written request from PacifiCorp, provide PacifiCorp with data collected by Seller related to the
construction, operation or maintenance of the Facility reasonably required by PacifiCorp or an
Affiliate thereof for reports to, and information requests from, any Governmental Authority or
Electric System Authority. Along with this information, Seller shall provide to PacifiCorp
copies of all submittals to Governmental Authorities or Electric System Authorities directed by
PacifiCorp and related to the operation of the Facility with a certificate that the contents of the
submittals are true and accurate to the best of Seller's knowledge. Seller shall use best efforts to
provide this information to PacifiCorp with sufficient advance notice to enable PacifiCorp to
review such information and meet any submission deadlines imposed by the requesting
organization or entity. PacifiCorp shall reimburse Seller for all of Seller's reasonable actual costs
and expenses in excess of $5,000 per year, if any, incurred in connection with PacifiCorp's
requests for information under this Section 6.8.3.
6.8.4 Data Request. Seller shall, promptly upon written request from
PacifiCorp, provide PacifiCorp with data collected by Seller related to the construction,
operation or maintenance of the Facility reasonably required for information requests from any
Governmental Authorities, state or federal agency intervener or any other party achieving
intervenor status in any PacifiCorp rate proceeding or other proceeding before any Governmental
Authority. Seller shall use best efforts to provide this information to PacifiCorp sufficiently in
advance to enable PacifiCorp to review it and meet any submission deadlines. PacifiCorp shall
reimburse Seller for all of Seller's reasonable actual costs and expenses in excess of $5,000 per
year, if any, incurred in connection with PacifiCorp's requests for information under this Section
6.8.4.
6.8.5 Documents to Governmental Authorities. After sending or filing any
statement, application, and report or any document with any Governmental Authority or Electric
System Authority relating to operation and maintenance of the Facility, Seller shall promptly
provide to PacifiCorp a copy of the same.
6.8.6 Environmental Information. Seller shall, promptly upon written request
from PacifiCorp, provide PacifiCorp with all data reasonably requested by PacifiCorp relating to
environmental information under the Required Facility Documents. Seller shall further provide
PacifiCorp with information relating to environmental impact mitigation measures it is taking in
connection with the Facility's construction or operation that are required by any Governmental
Authority. PacifiCorp shall reimburse Seller for all of Seller's reasonable actual costs and
expenses in excess of $5,000 per year, if any, incurred in connection with PacifiCorp's requests
for the foregoing information under this Section 6.8.6. As soon as it is known to Seller, Seller
shall disclose to PacifiCorp, the extent of any material violation of any environmental laws or
regulations arising out of the construction or operation of the Facility, or the presence of
Environmental Contamination at the Facility or on the Premises, alleged to exist by any
Governmental Authority having jurisdiction over the Premises, or the present existence of, or the
occuffence during Seller's occupancy of the Premises of, any enforcement, legal, or regulatory
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action or proceeding relating to such alleged violation or alleged presence of Environmental
Contamination presently occurring or having occurred during the period of time that Seller has
occupied the Premises.
6.8.7 Operational Reports. Seller shall provide PacifiCorp quarterly (on a
calendar year basis) operational reports in a form and substance reasonably acceptable to
PacifiCorp, and Seller shall, promptly upon wriffen request from PacifiCorp, provide PacifiCorp
with all operational data requested by PacifiCorp with respect to the performance of the Facility
and delivery of Net Output or Capacity Rights therefrom.
6.8.8 Notice of Material Adverse Events. Seller shall promptly notify
PacifiCorp of receipt of written notice or actual knowledge by Seller or its Affiliates of the
occurrence of any event of default under any material agreement to which Seller is a party and of
any other development, financial or otherwise, which would have a material adverse effect on
Seller, the Facility or Seller's ability to develop, construct, operate, maintain or own the Facility
as provided herein.
6.8.9 Notice of Litisation. Following its receipt of written notice or actual
knowledge of the commencement of any action, suito or proceeding before any court or
Governmental Authority against Seller or its members with respect to this Agreement or the
transactions contemplated hereunder, Seller shall promptly give notice to PacifiCorp of the same
Following its receipt of written notice or actual knowledge of the commencement of any action,
suit or proceeding before any court or Governmental Authority against Seller, its members or
any Affrliate, the effect of which would materially and adversely affect Seller's performance of
its obligations hereunder, Seller shall promptly give notice to PacifiCorp of the same.
6.8.10 Additional Information. Seller shallprovide to PacifiCorp such other
information respecting the condition or operations of Seller, as such pertains to Seller's
performance of its obligations hereunder, or the Facility as PacifiCorp may, from time to time,
reasonably request.
6.8.1I Confidential Treatment. The monthly reports and other information
provided to PacifiCorp under this Section 6.8 shall be treated as Confidential Business
Information if such treatment is requested in writing by Seller at the time the information is
provided to PacifiCorp, subject to PacifiCorp's rights to disclose such information pursuant to
Sections 6.8.4,6.8.5,6.8.7,9.5,9.6,23.2and23.3,andpursuanttoanyapplicableRequirements
of Law. Seller shall have the right to seek confidential treatment of any such information from
the Governmental Authority entitled to receive such information.
6.9 Financial and Accounting Information. If PacifiCorp or one of its Affiliates
determines that, under (i) the Accounting Standards Codification (ASC) 810, Consolidation of
Variable Interest Entities, and (ii) Requirements of Law that it may hold a variable interest in
Seller, but it lacks the information necessary to make a definitive conclusion, Seller hereby
agrees to provide, upon PacifiCorp's written request, sufficient financial and ownership
information so that PacifiCorp or its Affiliate may confirm whether a variable interest does exist
under ASC 810 and Requirements of Law. tf PacifiCorp or its Affiliate determines that, under
ASC 810, it holds a variable interest in Seller, Seller hereby agrees to provide, upon PacifiCorp's
20
written request, sufficient financial and other information to PacifiCorp or its Affiliate so that
PacifiCorp may properly consolidate the entity in which it holds the variable interest or present
the disclosures required by ASC 810 and Requirements of Law. PacifiCorp shall reimburse
Seller for Seller's reasonable costs and expenses, if any, incurred in connection with PacifiCorp's
requests for information under this Section 6.9. The information provided to PacifiCorp under
this Section 6.9 shall be treated as Confidential Business Information if at the time the Seller
provides such information to PacifiCorp the Seller provides written notice that the information is
Confidential Business Information. Seller shall have the right to seek confidential treatment of
any such information from any Governmental Authority entitled to receive such information.
Information provided pursuant to this Section 6.9 is subject to PacifiCorp's rights to disclose
such information pursuant to Sections 6.8.3, 6.8.4, 6.8.6,9.5,9.6,23.2 and23.3, andpursuant to
any applicable Requirements of Law.
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 purpose of reading or testing
metering equipment, (b) to provide tours of the Facility to customers and other guests of
PacifiCorp (not more than twelve (12) times per year), (c) for purposes of implementing Section
10.5, and (d) for other reasonable purposes at the reasonable request of PacifiCorp. PacifiCorp
shall release Seller against and from any and all Liabilities resulting from actions or omissions
by any of the PacifiCorp Representatives in connection with their access to the Facility, except to
the extent that such damages are caused by the intentional or negligent act or omission of Seller
or its agents or Affiliates.
6.1I Facility Images. PacifiCorp shallbe free to use any and all images from or of the
Facility for promotional purposes, subject to Seller's consent (not to be unreasonably withheld or
delayed, and which consent may consider Requirements of Law relating to Premises security,
obligations to outside vendors (including any confidentiality obligations), and the corporate
policies of Seller's Affiliates). Upon PacifiCorp's request and at PacifiCorp's expense, Seller
shall install imaging equipment at the Facility as PacifiCorp may request, including video and or
web-based imaging equipment subject to the prudent safety requirements of Seller, and
Requirements of Law relating to workplace health and safety. PacifiCorp shall retain full
discretion on how such images are presented including associating images of the Facility with a
Pacifi Corp-designated corporate logo.
SECTION 7
QUALIFYING FACILITY STATUS
7.1 Seller's OF Status. Seller covenants that, during the Term and before delivering
Net Output to PacifiCorp hereunder, Seller shall cause the Facility to maintain its status as a QF
7.2 OF Facilitv. Seller shall provide PacifiCorp with copies of the appropriate QF
certification (which may include a FERC self-certification) within ten (10) days of filing or
receiving the certification. During the Term, Seller shall maintain its QF status, and shall not
seek to change the Contract Price as a result of its status as a QF. At any time during the Term,
PacifiCorp may require Seller, at Seller's sole cost, to provide PacifiCorp with evidence
2t
satisfactory to PacifiCorp in its reasonable discretion that the Facility continues to qualify as a
QF under all applicable requirements. If after receiving such information from Seller, PacifiCorp
is not reasonably satisfied that the Facility qualifies for such status, PacifiCorp may require that
Seller provide a written legal opinion from an attorney who is (a) in good standing before a state
bar in the United States, and (b) has no economic relationship, association or nexus with the
Seller or the Facility, stating that the Facility is a QF and providing sufficient proof (including
copies of all documents and data as PacifiCorp may reasonably request) demonstrating that
Seller has maintained the Facility as a QF.
SECTION 8
SECURITY AND CREDIT SUPPORT
8.1 Representations and Warranties in Lieu of Securitv. Default Security is not
required if Seller satisfies as of the Effective Date each of the following representations and
warranties and further covenants to satisfy each of the following during the Term:
8.1 .l Financial Condition. Seller is not nor has within the past two (2) years
been (a) the debtor in any bankruptcy proceeding, (b) unable to pay its bills in the ordinary
course of its activities and operations, or (c) the subject of any legal or regulatory action, the
result of which could reasonably be expected to impair Seller's ability to own and operate the
Facility in accordance with the terms of this Agreement.
8.1.2 No Defaults on Payment Obligations. Seller has not at any time
defaulted in any of its payment obligations for electricity purchased from PacifiCorp.
8.1 .3 Current on Financial Obligations. Seller is not in default under any of its
other agreements and is current on all of its financial obligations, including construction-related
financial obligations.
8.1.4 Rights to Facility. Seller owns, and will continue to own for the Term, all
right, title and interest in and to the Facility, free and clear of all liens and encumbrances other
than liens and encumbrances related to third-party financing of the Facility.
8.1.5 Updates. Seller shall provide within five Business Days from receipt of
a written request from PacifiCorp all reasonable financial records and other documents necessary
for PacifiCorp to confirm Seller satisfies the representations and warranties contained in this
Section 8.1.
8.1.6 Declaration. Seller hereby declares (Seller initial one only):
_X_ Seller represents, warrants and covenants to each of 8.1 .l through 8.1 .5
above, and therefore is not required to post security under this Section 8 for so long as
Seller satisfies each of the foregoing; or
Seller elects to post the security under Section 8.
8.2 Default Security. Upon the Effective Date, unless Seller satisfies the
requirements of Section 8.1 above and has provided the associated declaration in Section 8.1.6,
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Seller shall provide Default Security to PacifiCorp in the form of a cash escrow or Letter of
Credit.
8.2.1 Cash Escrow Security. Seller shall deposit in an escrow account
established by PacifiCorp in a banking institution acceptable to both Parties, the Default
Security. Such sum shall earn interest at the rate applicable to money market deposits at such
banking institution from time to time. To the extent PacifiCorp receives payment from the
Default Security, Seller shall, within fifteen (15) days, restore the Default Security as if no such
deduction had occurred.
8.2.2 Letter of Credit Security. Seller shall post and maintain in an amount
equal to the Default Security: (a) a guaranty from a party that satisfies the Credit Requirements,
in a form acceptable to PacifiCorp in its discretion, or (b) a Letter of Credit in favor of
PacifiCorp. To the extent PacifiCorp receives payment from the Default Security, Seller shall,
within fifteen (15) days, restore the Default Security as if no such deduction had occurred. Seller
and any party providing a guaranty for Seller shall provide within five Business Days from
receipt of a written request from PacifiCorp all reasonable financial records necessary for
PacifiCorp to confirm Seller and/or the guarantor satisfies the Credit Requirements.
8.3 Return of Default Security. PacifiCorp shall return any remaining Default
Security to Seller within sixty (60) days of the termination of the Agreement.
8.4 Levelized Security.
8.4.1 Dutv to Post Levelized Security. Upon the Effective Date or at any time
during the Term when Seller has elected to receive levelized pricing and does not satisfy the
Credit Requirements, Seller shall post and maintain in favor of PacifiCorp (a) a guaranty from an
entity that satisfies the Credit Requirements, in a form acceptable to PacifiCorp in its reasonable
discretion, (b) a Letter of Credit, or (c) cash escrow (established in the same manner as described
in Section 8.2.1, except the amount shall be consistent with the requirements on this Section 8.4)
(the "Levelized Security"), &s provided in this Section 8.4. In the event Seller posts Levelized
Security and thereafter satisfies the Credit Requirements, as demonstrated to the reasonable
satisfaction of PacifiCorp, then Seller shall be entitled to a release by PacifiCorp of the Levelized
Security for so long as Seller continues to satisfy the Credit Requirements. Seller and any party
providing a guaranty for Seller shall provide within five Business Days from receipt of a written
request from PacifiCorp all reasonable financial records necessary for PacifiCorp to confirm
Seller and/or the guarantor satisfies the Credit Requirements.
8.4.2 Amount of Levelized Security. The total amount of the Levelized
Security required by Section 8.4.1 shall be the amount set forth in Exhibit G for each calendar
year. Upon the Effective Date, if Seller does not satisff the Credit Requirements, Seller shall
provide the Levelized Security for the first partial and full calendar year of the Term as set forth
in Exhibit G. Thereafter and throughout the Term, for the periods when Seller does not satisfy
the Credit Requirements, Seller shall maintain throughout the applicable calendar year the
Levelized Security amount in Exhibit G.
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8.4.3 Duty of Levelized Security to Pay Amounts Due to PacifiCorp. If Seller
fails to pay any amount due to PacifiCorp within the time provided for payment under this
Agreement, PacifiCorp shall be entitled to and shall draw upon the Levelized Security.
PacifiCorp shall also be entitled to draw upon the Levelized Security for damages arising if this
Agreement is terminated under Section I I because of Seller's default.
8.5 Securit), is Not a Limit on Seller's Liabilit),. The security contemplated by this
Section 8 (a) constitutes security for, but is not a limitation of, Seller's obligations hereunder and
(b) shall not be PacifiCorp's exclusive remedy for Seller's failure to perform in accordance with
this Agreement. Seller shall maintain security as required by Sections 8.2 and 8.4., as applicable,
per this Agreement. To the extent that PacifiCorp draws on any security, Seller shall, on or
before the first day of the Contract Year following such draw, replenish or reinstate the security
to the full amount then required under this Section 8. If at any time the Seller or Seller's credit
support provider(s) fails to meet the Credit Requirements, then Seller shall provide replacement
security meeting the requirements set forth in this Section 8 within ten (10) Business Days after
the earlier of (x) Seller's receipt of notice from any source that Seller or the credit support
provider(s), as applicable, no longer meets the Credit Requirements or (y) Seller's receipt of
written notice from PacifiCorp requesting the posting of alternate security.
SECTION 9
METERING
9.1 Installation of Metering Equipment. Metering equipment shall be inspected,
tested, maintained and replaced as provided in the Generation Interconnection Agreement;
provided, however, that PacifiCorp acting in its merchant function capacity shall be under no
obligation, pursuant hereto, to bear any expense relating to such metering equipment.
9.2 Metering. Metering shall be performed at the location and in the manner
specified in Exhibit C, the Generation lnterconnection Agreement and as necessary to perform
Seller's obligations hereunder. All quantities of Net Output purchased hereunder shall reflect the
net amount of energy flowing into the System at the Point of Delivery.
9.3 Inspection. Testing. Repair and Replacement of Meters. PacifiCorp shall have the
right to periodically inspect, test, repair and replace the metering equipment that are provided for
in the Generation Interconnection Agreement, without PacifiCorp assuming any obligations
thereunder. If any of the inspections or tests disclose an error exceeding 0.5 percent, either fast
or slow, proper correction, based upon the inaccuracy found, shall be made of previous readings
for the actual period during which the metering equipment rendered inaccurate measurements if
that period can be ascertained. Ifthe actual period cannot 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 three months, in the amount the metering equipment shall
have been shown to be in error by such test. Any correction in billings or payments resulting
from a correction in the meter records shall be made in the next monthly billing or payment
rendered. Such correction, when made, shall constitute full adjustment of any claim between
Seller and PacifiCorp arising out of such inaccuracy of metering equipment. Nothing in this
Agreement shall give rise to PacifiCorp, acting in its merchant function capacity hereunder,
24
having any obligations to Seller, or any other person or entity, pursuant to or under the
Generation Interconnection Agreement.
9.4 Metering Costs. To the extent not otherwise provided in the Generation
Interconnection Agreement, Seller shall bear all costs (including PacifiCorp's costs) relating to
all metering equipment at Seller's Facility.
9.5 Meter Data. Seller may request the Interconnection Provider or Transmission
Provider in writing in a form similar to that found in Exhibit H to provide any and all meter or
other data associated with the Facility or Net Output directly to PacifiCorp. Should Seller refuse
to provide a release similar to that found in Exhibit H, Seller shall establish a mechanism at its
expense that allows PacifiCorp, in its merchant function, to obtain all necessary meter and other
data to fully perform and verify Seller's performance under this Agreement. Notwithstanding
any other provision hereof, PacifiCorp shall have the right to provide such data to any Electric
System Authority.
9.6 WREGIS Metering. Seller shall cause the Facility to implement all necessary
generation information communications in WREGIS, and report generation information to
WREGIS pursuant to a WREGIS-approved meter that is dedicated to the Facility and only the
Facility.
SECTION 10
BILLINGS, COMPUTATIONS AND PAYMENTS
10.1 Monthly Invoices. On or before the tenth (l0n) day following the end of each
calendar month, Seller shall deliver to PacifiCorp a proper invoice showing Seller's computation
of Net Output delivered to the Point of Delivery during such month. When calculating the
invoice, Seller shall provide computations showing the portion of Net Output that was delivered
during On-Peak Hours and the portion of Net Output that was delivered during Off-Peak Hours.
If such invoice is delivered by Seller to PacifiCorp, then PacifiCorp shall send to Seller, on or
before the later of the twentieth (20th) day following receipt of such invoice or the thirtieth (30th)
day following the end of each month, payment for Seller's deliveries of Net Output to
PacifiCorp.
10.2 Offsets. Either Party may offset any payment due hereunder against amounts
owed by the other Party pursuant hereto. Either Party's exercise of recoupment and set off rights
shall not limit the other remedies available to such Party hereunder.
10.3 Interest on Late Payments. Any amounts that are not paid when due hereunder
shall bear interest at the Contract Interest Rate from the date due until paid.
10.4 Disputed Amounts. If either Party, in good faith, disputes any amount due
pursuant to an invoice rendered hereunder, such Party shall notify the other Party ofthe 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 Party is determined to be due the other Party, or if the Parties resolve the payment
25
dispute, the amount due shall be paid within five (5) Business Days after such determination or
resolution, along with interest at the Contract Interest Rate from the date due until the date paid.
10.5 Audit Riehts. Each Party, through its authorized representatives, shall have the
right, at its sole expense upon reasonable notice and during normal business hours, to examine
and copy the records ofthe other Party to the extent reasonably necessary to verify the accuracy
of any statement, charge or computation made hereunder or to verify the other Party's
performance of its obligations hereunder. Upon request, each Party shall provide to the other
Party statements evidencing the quantities of Net Output delivered at the Point of Delivery. If
any statement is found to be inaccurate, a corrected statement shall be issued and any amount
due thereunder will be promptly paid and shall bear interest at the Contract Interest Rate from the
date of the overpayment or underpayment to the date of receipt of the reconciling payment.
Notwithstanding the foregoing, no adjustment shall be made with respect to any statement or
payment hereunder unless aPafi questions the accuracy of such payment or statement within
two (2) years after the date of such statement or payment.
SECTION 11
DEFAULTS AI\[D REMEDIES
1 I .l Defaults. The following events are defaults (each a "default" before the passing
of applicable notice and cure periods, and an "Event of Default" thereafter) hereunder:
ll.l.l Defaults bv Either Party.
(a) A Party fails to make a payment when due hereunder if the failure
is not cured within ten (10) Business Days after the non-defaulting Party gives the defaulting
Party a notice of the default.
(b) A Party (i) makes a general assignment for the benefit of its
creditors; (ii) files a petition or otherwise commences, authorizes or acquiesces in the
commencement of a proceeding or cause of action under any bankruptcy or similar 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) days after such filing; (iii) becomes insolvent; or (iv) is unable to pay
its debts when due.
(c) A Party breaches a representation or warranty made by it herein if
the breach is not cured within thirty (30) days after the non-defaulting Party gives the defaulting
Party a notice of the default; provided, that if such default is not reasonably capable of being
cured within the thirty (30) day cure period but is reasonably capable of being cured within a
ninety (90) day cure period, the defaulting Party will have such additional time (not exceeding an
additional sixty (60) days) as is reasonably necessary to cure, if, prior to the end of the thirty (30)
day cure period the defaulting Party provides the non-defaulting Party a remediation plan, the
non-defaulting party approves such remediation plan, and the defaulting Party promptly
commences and diligently pursues the remediation plan.
(d) A Party otherwise fails to perform any material obligation
hereunder for which an exclusive remedy is not provided hereunder and which is not addressed
in any other Event of Default desuibed in Section I I .1, if the failure is not cured within thirty
26
(30) days after the non-defaulting Party gives the defaulting Party notice of the default; provided
that if such default is not reasonably capable of being cured within the thirty (30) day cure period
but is reasonably capable of being cured within a ninety (90) day cure period, the defaulting
Party will have such additional time (not exceeding an additional sixty (60) days) as is
reasonably necessary to cure, if, prior to the end of the thirty (30) day cure period the defaulting
Party provides the non-defaulting Party a remediation plan, the non-defaulting party approves
such remediation plan, and the defaulting Party promptly commences and diligently pursues the
remediation plan.
ll.l.2 Defaults by Seller.
(a) Seller fails to post, increase, or maintain the Levelized Security or
Default Security as required under, and by the applicable dates set forth in this Agreement and
such failure is not cured within fifteen (15) days after Seller's receipt of written notice thereof
from PacifiCorp.
(b) Seller sells Output or Capacity Rights from the Facility to a party
other than PacifiCorp in breach of Section 4.2, if Seller does not permanently cease such sale and
compensate PacifiCorp for the damages arising from the breach within ten (10) days after
PacifiCorp gives Seller a notice of default.
(c) PacifiCorp receives notice of foreclosure of the Facility or any part
thereof by a Lender, mechanic or materialman, or any other holder, of an unpaid lien or other
charge or encumbrance, if the same has not been stayed, paid, or bonded around within ten (10)
days of the date of the notice received by PacifiCorp.
(d) Seller fails to maintain any Required Facility Documents or
Permits necessary to own or operate the Facility and such failure continues for thirty (30) days
after Seller's receipt of written notice thereof from PacifiCorp;provided, however, that, upon
written notice from Seller, the thirty (30) day period shall be extended by an additional sixty (60)
days if (i) the failure cannot reasonably be cured within the thirty (30) day period despite diligent
efforts, (ii) the default is capable of being cured within the additional sixty (60) day period, and
(iii) Seller commences the cure within the original thirty (30) day period and is at all times
thereafter diligently and continuously proceeding to cure the failure.
(e) Seller's Abandonment of operation of the Facility and such failure
continues for thirty (30) days after Seller's receipt of written notice thereof from PacifiCorp.
(f) Seller fails to maintain insurance as required by the Agreement
and such failure continues for fifteen (15) days after Seller's receipt of written notice thereof
from PacifiCorp.
(g) Seller fails to satisfy the Minimum Annual Delivery for any
Contract Year.
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ll.2 Remedies for Failure to Deliver/Receive.
ll.2.l Remedy for Seller's Failure to Deliver. Upon the occurrence and during
the continuation of a default of Seller under Section I I .l .2(c), Seller shall pay PacifiCorp within
five Business Days after invoice receipt, an amount equal to the sum of (a) PacifiCorp's Cost to
Cover multiplied by the Net Output delivered to a party other than PacifiCorp, (b) additional
transmission charges, if any, reasonably incurred by PacifiCorp in moving replacement energy to
the Point of Delivery or if not there, to such points in PacifiCorp's control area as are determined
by PacifiCorp, and (c) any additional cost or expense incurred as a result of Seller's default under
Section I l.l .2(c), as determined by PacifiCorp in a commercially reasonable manner. The
invoice for such amount shall include a written statement explaining in reasonable detail the
calculation of such amount.
11.2.2 Remedyfor PacifiCom's Failure to Purchase. If PacifiCorp fails to
receive or purchase all or part of the Net Output required to be purchased pursuant hereto and
such failure is not excused under the terms hereof or by Seller's failure to perform, then Seller
shall first satisfy its obligations under Section I 1.6 and then PacifiCorp shall pay Seller, on the
earlier of the date payment would otherwise be due in respect of the month in which the failure
occurred or within five (5) Business Days after invoice receipt, an amount equal to Seller's Cost
to Cover multiplied by the amount of Net Output so not purchased, less amounts received by
Seller pursuant to Section I 1.6. The invoice for such amount shall include a written statement
explaining in reasonable detail the calculation thereof.
11.2.3 Remedy for Seller's Failure to Sell/Deliver Capacity Rights. Seller shall
be liable for PacifiCorp's actual damages in the event Seller fails to sell or deliver all or any
portion of the Capacity Rights to PacifiCorp.
I 1.3 Termination and Remedies. From and during the continuance of an Event of
Default, the non-defaulting Party shall be entitled to all remedies available at law or in equity,
and may terminate this Agreement by notice to the other Party designating the date of
termination and delivered to the defaulting Party no less than fifteen (15) days before such
termination date. The notice required by this Section I 1.3 may be provided in the notice of
default (and does not have to be a separate notice) so long as it complies with all other terms of
this Section I 1.3. As a precondition to Seller's exercise of this termination right, Seller must also
provide copies of such notice to the notice addresses of the then-current President and General
Counsel of PacifiCorp. Such copies shall be sent by registered overnight delivery service or by
certified or registered mail, return receipt requested. In addition, Seller's termination notice shall
state prominently therein in typefont no smaller than l4-point all-capital letters that "THIS IS A
TERMINATION NOTICE LTNDER A PPA. YOU MUST CURE A DEFAULT, OR THE PPA
WLL BE TERMINATED," and shall state therein any amount purported to be owed and wiring
instructions. Notwithstanding any other provision of this Agreement to the contrary, Seller will
not have any right to terminate this Agreement if the default that gave rise to the termination
right is cured within fifteen (15) days of PacifiCorp's receipt of such notice. Further, from and
after the date upon which Seller fails to remedy a default within the time periods provided in
Section I l.l, and until PacifiCorp has recovered all damages incurred on account of such default
by Seller, without exercising its termination right, PacifiCorp may offset its damages against any
payment due Seller. Except in circumstances in which a remedy provided for in this Agreement
28
is described as a Party's sole or exclusive remedy, upon termination, the non-defaulting Party
may pursue any and all legal or equitable remedies provided by law, equity or this Agreement.
The rights contemplated by this Section 1 1 are cumulative such that the exercise of one or more
rights shall not constitute a waiver of any other rights. In the event of a termination hereof:
(a) Each Party shall pay to the other all amounts due the other
hereunder for all periods prior to termination, subject to offset by the non-defaulting Party
against damages incurred by such Party.
(b) The amounts due pursuant to Section I 1.3(a) shall be calculated
and paid within thirty (30) days after the billing date for such charges and shall bear interest
thereon at the Contract Interest Rate from the date of termination until the date paid. The
foregoing does not extend the due date of, or provide an interest holiday for any payments
otherwise due hereunder.
(c) Before and after the effective date of termination, the non-
defaulting Party may pursue, to the extent permitted by this Agreement, any and all legal or
equitable remedies provided by law, equity or this Agreement.
(d) Without limiting the generality of the foregoing, the provisions of
Sections 4.6,5.4,5.5,6.8.3,6.8.4,6.8.6, 10.3, 10.4, 10.5, 11.3, 11.4,11.5,11.6,11.7,11.8, and
Section 12, Section 13, Section 23,and Section 24 shall survive the termination hereof.
ll.4 Termination of Duty to Buy. If this Agreement is terminated because of a default
by Seller, neither Seller nor any Affiliate of Seller, nor any successor to Seller with respect to the
ownership of the Facility or Premises, may thereafter require or seek to require PacifiCorp to
make any purchases from the Facility or any electric generation facility constructed on the
Premises under PURPA, or any other Requirements of Law, for any periods that would have
been within the Term had this Agreement remained in effect. Seller, on behalf of itself and on
behalf of any other entity on whose behalf it may act, hereby waives its rights to require
PacifiCorp to do so.
11.5 Termination Damages. If this Agreement is terminated as a result of an Event of
Default by one of the Parties, termination damages shall be determined. The amount of
termination damages shall be calculated by the non-defaulting Party within a reasonable period
after termination of the Agreement. Amounts owed pursuant to this Section 11 shall be due
within five (5) Business Days after the non-defaulting Party gives the defaulting Party notice of
the amount due. The non-defaulting Party shall under no circumstances be required to account
for or otherwise credit or pay the defaulting Party for economic benefits accruing to the non-
defaulting Party as a result of the defaulting Party's default.
I 1.6 Dut),/Right to Mitigate. Each Party agrees that it has a duty to mitigate damages
and covenants that it will use commercially reasonable efforts to minimize any damages it may
incur as a result of the other Party's performance or non-performance hereof. "Commercially
reasonable efforts" (a) by Seller shall include requiring Seller to use commercially reasonable
efforts to maximize the price for Net Output received by Seller from third parties, including
entering into an enabling agreement with, or being affiliated with, one or more power marketers
29
of nationally recognized standing to market such Net Output not purchased or accepted by
PacifiCorp (only during a period PacifiCorp is in default), to the extent permitted by
Requirements of Law and the Generation Interconnection Agreement, and (b) by PacifiCorp
shall include requiring PacifiCorp to use commercially reasonable efforts to minimize the price
paid to third parties for energy purchased to replace Net Output not delivered by Seller as
required hereunder.
11.7 Security. If this Agreement is terminated because of Seller's default, PacifiCorp
may, in addition to pursuing any and all other remedies available at law or in equity, proceed
against any security held by PacifiCorp in whatever form to reduce any amounts that Seller owes
PacifiCorp arising from such default.
I 1.8 Cumulative Remedies. Except in circumstances in which a remedy provided for
in this Agreement is described as a sole or exclusive remedy, the rights and remedies provided to
PacifiCorp hereunder are cumulative and not exclusive of any rights or remedies of PacifiCorp.
SECTION 12
INDEMNIFICATION AIID LIABILITY
12.l Indemnities.
l2.l.l Indemnity by Seller. To the extent permitted by Requirements of Law
and subject to Section 12.1.5, Seller shall release, indemnify and hold harmless PacifiCorp, its
divisions, Affiliates, and each of its and their respective directors, officers, employees, agents,
and representatives (collectively, the "PacifiCorp Indemnitees") against and from any and all
losses, fines, penalties, claims, demands, damages, liabilities, actions or suits of any nature
whatsoever (including legal costs and attorneys' fees, both at trial and on appeal, whether or not
suit is brought) (collectively, "Liabilities") actually or allegedly resulting from, or arising out of,
or in any way connected with, the performance by Seller of its obligations hereunder, or relating
to the Facility or Premises, for or on account of injury, bodily or otherwise, to, or death of, or
damage to, or destruction or economic loss of property of, any person or entity, excepting only to
the extent such Liabilities as may be caused by the gross negligence or willful misconduct of any
person or entity within the PacifiCorp Indemnitees. Seller shall be solely responsible for (and
shall defend and hold PacifiCorp harmless against) any damage that may occur as a direct result
of Seller's breach of the Generation Interconnection Agreement.
12.1.2 Indemnity by PacifiCorp. To the extent permitted by Requirements of
Law and subject to Section 12.1.5, PacifiCorp shall release, indemnify and hold harmless Seller,
its Affiliates, and each of its and their respective directors, officers, employees, agents, and
representatives (collectively, the "Seller Indemnitees") against and from any and all Liabilities
actually or allegedly resulting from, or arising out of, or in any way connected with, the
performance by PacifiCorp of its obligations hereunder for or on account of (a) injury, bodily or
otherwise, to, or death of, or (b) for damage to, or destruction or economic loss of property of,
any person or entity within the Seller Indemnitees, excepting only to the extent such Liabilities
as may be caused by the gross negligence or willful misconduct of any person or entity within
the Seller Indemnitees.
30
12.1.3 Additional Cross Indemnity. Without limiting Sections l2.l.l and
12.1.2, Seller shall release, indemnify and hold harmless the PacifiCorp Indemnitees from and
against all Liabilities related to Net Output prior to its delivery by Seller at the Point of Delivery,
and PacifiCorp shall release, indemnify and hold harmless the Seller Indemnitees from and
against all Liabilities related to Net Output once delivered to PacifiCorp at the Point of Delivery
as provided herein, except in each case to the extent such Liabilities are attributable to the gross
negligence or willful misconduct or a breach of this Agreement by any member of the PacifiCorp
Indemnitees or the Seller Indemnitees, respectively, seeking indemnification hereunder.
12.1.4 No Dedication. Nothing herein shall be construed to create any duty to,
any standard of care with reference to, or any liability to any person not a Party. No undertaking
by one Party to the other under any provision hereof shall constitute the dedication of
PacifiCorp's facilities or any portion thereof to Seller or to the public, nor affect the status of
PacifiCorp as an independent public utility corporation or Seller as an independent individual or
entity.
12.1.5 Consequential Damages. NEITHER PARTY SHALL BE LIABLE
TO THE OTHER PARTY FOR SPECIAL, PUNITIVE,INDIRECT, EXEMPLARY OR
CONSEQUENTIAL DAMAGES, WHETHER SUCH DAMAGES ARE ALLOWED OR
PROVIDED BY CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT
LIABILITY, STATUTE OR OTHERWISE. THE PARTIES AGREE THAT AI\Y
LIQUIDATED DAMAGES, DELAY DAMAGES, PACIFICORP AND SELLER COST
TO COVER DAMAGES, SECTION 11.2.3 CAPACITY RIGHTS LOSS DAMAGES, OR
OTHER SPECIFIED MEASURE OF DAMAGES EXPRESSLY PROVIDED FOR
HEREIN, ARE NOT INTENDED BY THEM TO REPRESENT SPECIAL, PUNITIVE,
INDIRECT, EXEMPLARY OR CONSEQUENTIAL DAMAGES.
SECTION 13
INSURANCE
l3.l Required Policies and Coveraees. Without limiting any Liabilities or any other
obligations ofSeller hereunder, Seller shall secure and continuously carry the insurance coverage
specified on Exhibit I during the Term or longer period if specified in Exhibit I.
SECTION 14
FORCE MAJEURE
14.1 Definition of Force Majeure. "Force Majeure" or "an event of Force Majeure"
means an event that (a) is not reasonably anticipated as of the date hereof, (b) is not within the
reasonable control of the Party affected by the event, (c) is not the result of such Party's
negligence or failure to act, and (d) could not be overcome by the affected Party's use of due
diligence in the circumstances. Force Majeure includes, but is not restricted to, events of the
following types (but only to the extent that such an event, in consideration of the circumstances,
satisfies the tests set forth in the preceding sentence): acts of God; civil disturbance; sabotage;
strikes; lock-outs; work stoppages; and action or restraint by court order or public or
Governmental Authority (as long as the affected Party has not applied for or assisted in the
application for, and has opposed to the extent reasonable, such court or government action).
3l
Notwithstanding the foregoing, none of the following constitute Force Majeure: (i) Seller's
ability to sell, or PacifiCorp's ability to purchase energy or capacity at a more advantageous price
than is provided hereunder; (ii) the cost or availability of fuel or motive force to operate the
Facility; (iii) economic hardship, including lack of money; (iv) any breakdown or malfunction of
the Facility's equipment (including any serial equipment defect) that is not caused by an
independent event of Force Majeure, (v) the imposition upon a Party of costs or taxes allocated
to such Party under Section 5, (vi) delay or failure of Seller to obtain or perform any Required
Facility Document unless due to a Force Majeure event, (vii) any delay, alleged breach of
contract, or failure by the Transmission Provider, Network Service Provider or Interconnection
Provider unless due to a Force Majeure event, (viii) maintenance upgrade or repair of any
facilities or right of way corridors constituting part of or involving the Interconnection Facilities,
whether performed by or for Seller, or other third parties (except for repairs made necessary as a
result of an event of Force Majeure); (ix) Seller's failure to obtain, or perform under, the
Generation Interconnection Agreement, or its other contracts and obligations to transmission
owner, Transmission Provider or Interconnection Provider, unless due to a Force Majeure event;
or (x) any event attributable to the use of Interconnection Facilities for deliveries of Net Output
to any party other than PacifiCorp. Notwithstanding anything to the contrary herein, in no event
will the increased cost of electricity, steel, labor, or transportation constitute an event of Force
Majeure.
14.2 Suspension of Performance. Neither Party shall be liable for any delay or failure
in its performance under this Agreement, nor shall any delay, failure, or other occuffence or
event become an Event of Default, to the extent such delay, failure, occuffence or event is
substantially caused by conditions or events of Force Majeure during the continuation of the
event of Force Majeure, for the same number of days that the event of Force Majeure has
prevailed, provided that:
(a) the Party affected by the Force Majeure, shall, within five (5) days
after the occurrence of the event of Force Majeure, give the other Party written notice describing
the particulars of the event; and
(b) the suspension ofperforrnance shall be ofno greater scope and of
no longer duration than is required to remedy the effect of the Force Majeure; and
(c) the affected Party shall use diligent efforts to remedy its inability
to perform.
14.3 Force Majeure Does Not Affect Other Oblieations. No obligations of either Party
that arose before the Force Majeure causing the suspension of perforrnance or that arise after the
cessation of the Force Majeure shall be excused by the Force Majeure.
14.4 Strikes. Notwithstanding any other provision hereof, neither Party shall be
required to settle any strike, walkout, lockout or other labor dispute on terms which, in the sole
judgment of the Party involved in the dispute, are contrary to the Party's best interests.
14.5 Right to Terminate. If a Force Majeure event prevents a Party from substantially
performing its obligations hereunder for a period exceeding 180 consecutive days (despite the
32
affected Party's effort to take all reasonable steps to remedy the effects of the Force Majeure with
all reasonable dispatch), then the Party not affected by the Force Majeure event, with respect to
its obligations hereunder, may terminate this Agreement by giving ten (10) days prior notice to
the other Party. Upon such termination, neither Party will have any liability to the other with
respect to the period following the effective date of such termination; provided, however, that
this Agreement will remain in effect to the extent necessary to facilitate the settlement of all
liabilities and obligations arising hereunder before the effective date of such termination.
SECTION 15
SEVERAL OBLIGATIONS
Nothing contained herein shall be construed to create an association, trust,
partnership or joint venture or to impose a trust, partnership or fiduciary duty, obligation or
Liability on or between the Parties.
SECTION 16
CHOICE OF LAW
This Agreement shall be interpreted and enforced in accordance with the laws of
the State of Utah, applying any choice of law rules that may direct the application of the laws of
another jurisdiction.
SECTION 17
PARTIAL INVALIDITY
The Parties do not intend to violate any laws governing the subject matter hereof.
If any of the terms hereof are finally held or determined to be invalid, illegal or void as being
contrary to any applicable law or public policy, all other terms hereof shall remain in effect. The
Parties shall use best efforts to amend this Agreement to reform or replace any terms determined
to be invalid, illegal or void, such that the amended terms (a) comply with and are enforceable
under applicable law, (b) give effect to the intent of the Parties in entering hereinto, and (c)
preserve the balance of the economics and equities contemplated by this Agreement in all
material respects.
SECTION 18
NON-WAIVER
No waiver of any provision hereof shall be effective unless the waiver is set forth
in a writing that (a) expressly identifies the provision being waived, and (b) is executed by the
Party waiving the provision. A Party's waiver of one or more failures by the other Party in the
performance of any of the provisions hereof shall not be construed as a waiver of any other
failure or failures, whether of a like kind or different nature.
aaJJ
SECTION 19
GOVERNMENTAL JURISDICTION
AI\D AUTHORIZATIONS
This Agreement is subject to the jurisdiction of those Governmental Authorities
having control over either Party or this Agreement. During the Term, Seller shall maintain all
Permits required, as applicable, for the construction, operation, or ownership of the Facility.
SECTION 20
SUCCESSORS AI\D ASSIGNS
20.1 Restriction on Assignments. Except as expressly provided in this Section 20,
neither Party may assign this Agreement or any of its rights or obligations hereunder without the
prior written consent of the other Party.
20.2 Permitted Assignments. Notwithstanding Section 20.1, either Party may, without
the need for consent from the other Party (but with notice to the other Party, including the names
of the assignees): (a) transfer, sell, pledge, encumber or assign this Agreement or the accounts,
revenues or proceeds therefrom in connection with project financing for the Facility; or (b)
transfer or assign this Agreement to an Affiliate meeting the requirements of this Agreement;
provided, however, that Seller shall not transfer, sell, encumber or assign this Agreement or any
interest herein to any Affiliate of PacifiCorp without the prior written consent of PacifiCorp.
Except with respect to collateral assignments for financing purposes in every assignment
permitted under this Section 20.2,the assignee must agree in writing to be bound by the terms
and conditions hereof and must possess the same or similar experience, and possess the same or
better creditworthiness, as the assignor. PacifiCorp may assign this Agreement in whole or in
part without the consent of Seller to any person or entity in the event that PacifiCorp ceases to be
a load-serving entity, in which event PacifiCorp shall be released from liability hereunder upon
approval of PacifiCorp ceasing to be a load-serving entity by the Commission. The Party
seeking to assign or transfer this Agreement shall be solely responsible for paying all costs of
assignment.
SECTION 21
ENTIRE AGREEMENT
This Agreement supersedes all prior agreements, proposals, representations,
negotiations, discussions or letters, whether oral or in writing, regarding the subject matter
hereof. No modification hereof shall be effective unless it is in writing and executed by both
Parties.
SECTION 22
NOTICES
22.1 Addresses and Delivery Methods. All notices, requests, statements or payments
shall be made to the addresses set out below. In addition, copies of a notice of termination of
this Agreement under Section I I .3 shall contain the information required by Section 1 1.3 and
shall be sent to the then-current President and General Counsel of PacifiCorp. Notices required
to be in writing shall be delivered by letter, facsimile or other tangible documentary form. Notice
34
by overnight mail or courier shall be deemed to have been given on the date and time evidenced
by the delivery receipt. Notice by hand delivery shall be deemed to have been given when
received or hand delivered. Notice by facsimile is effective as of transmission to each and all of
the telefacsimile numbers provided below for a Party, but must be followed up by notice by
registered mail or overnight carrier to be effective. Notice by overnight mail shall be deemed to
have been given the Business Day after it is sent, if sent for next day delivery to a domestic
address by a recognized overnight delivery service (e.g., Federal Express or UPS). Notice by
certified or registered mail, return receipt requested, shall be deemed to have been given upon
receipt.
To PacitiCorp:
To Seller:
All Notices:
PacifiCorp
825 NE Multnomah Street
Portland, OR 97232
Attention: Contract Administration
Suite 600
Facsimile: (503) 8l 3-629 I
Email : cntadmin@Facifi corp.com
Duns: 00-790-90 I 3
Federal Tax ID Number: 93-0246090
Payments:
Attn: Central Cashiers Office, Suite 550
Phone: [phone]
Wire Transfer:
Bank OneN.A.
To be provided in separate letter from
PacifiCorp to Seller
Invoices:
Attn: Back Office, Suite 700
Facsimile: [phone]
Email : powerinvoices@nacifi corp.com
Credit and Collections:
Affn: Credit Manager, Suite 700
Phone: [phone]
Facsimile: [phone]
Scheduling:
Attn: Pre-Scheduling, Suite 600
Phone: [phone]
Email : ctpreschd@pacifi corp.com
With additional Notices of an Event of
Default or Potential Event of Default to:
Attn: Assistant General Counsel
Suite 1800
All Notices:
City of Preston
70 W Onieda
Preston, lD 83263
Attn: Kelly Michelsen
Telephone Number: 208-852-1 81 7
Fax: [phone]
Kellymichelsen@,prestonidaho.net
And to:
City of Preston
70 W Onieda
Preston, lD 83263
Attn: Linda Acock
Telephone Number: 208-852-l 8l 7Fax: [phone]
L indaacock@,prestonidaho.net
35
22.2 Changes of Address. The Parties may change any of the persons to whom notices
are addressed, or their addresses, by providing written notice in accordance with this section.
SECTION 23
CONFIDENTIALITY
23.1 Confidential Business Information. The following constitutes "Confidential
Business Information," whether oral or written: (a) the Parties' proposals and negotiations
concerning this Agreement, made or conducted prior to the Effective Date, (b) the actual charges
billed to PacifiCorp hereunder, and (c) any information delivered by PacifiCorp to Seller prior to
the Effective Date relating to the market prices of energy and methodologies for their
determination or estimation. Seller and PacifiCorp each agree to hold such Confidential
Business Information wholly confidential, except as otherwise expressly provided in this
Agreement. "Confidential Business Information" shall not include information that (x) is in or
enters the public domain through no fault of the Party receiving such information, or (y) was in
the possession of a Party prior to the Effective Date, other than through delivery thereof as
specified in subsections (a) and (c) above. A Party providing any Confidential Business
Information under this Agreement shall clearly mark all pages of all documents and materials to
be treated as Confidential Business information with the term "Confidential" on the front of each
page, document or material. If the Confidential Business Information is transmitted by electronic
means the title or subject line shall indicate the information is Confidential Business lnformation.
All Confidential Business Information shall be maintained as confidential, pursuant to the terms
of this Section 23, for a period of two years from the date it is received by the receiving Party
unless otherwise agreed to in writing by the Parties.
23.2 Maintain Confidential Each Party agrees not to disclose Confidential
Business Information to any other person (other than its Affrliates, accountants, auditors,
counsel, consultants, lenders, prospective lenders, employees, officers and directors), without the
prior written consent of the other Party, provided that: (a) either Party may disclose Confidential
Business Information, if and to the extent such disclosure is required (i) by Requirements of
Law, (ii) in order for PacifiCorp to receive regulatory recovery of expenses related to this
Agreement, (iii) pursuant to an order of a court or regulatory agency, or (iv) in order to enforce
this Agreement or to seek approval hereof, and (b) notwithstanding any other provision hereof,
PacifiCorp may in its sole discretion disclose or otherwise use for any purpose in its sole
discretion the Confidential Business Information described in Sections 23.1(b) or 23.1(c). In the
event a Party is required by Requirements of Law to disclose Confidential Business Information,
such Party shall to the extent possible promptly notify the other Party of the obligation to
disclose such information.
23.3 PacifiCorp Regulatory Compliance. The Parties acknowledge that PacifiCorp is
required by law or regulation to report certain information that is or could otherwise embody
Confidential Business Information from time to time. Such reports include models, filings,
reports of PacifiCorp's net power costs, general rate case filings, power cost adjustment
mechanisms, FERC-required reporting such as those made on FERC Form I or Form 714,
market power and market monitoring reports, annual state reports that include resources and
loads, integrated resource planning reports, reports to entities such as NERC, WECC, Pacific
Northwest Utility Coordinating Committee, WREGIS, or similar or successor organizations,
36
forms, filings, or reports, the specific names of which may vary by jurisdiction, along with
supporting documentation. Additionally, in regulatory proceedings in all state and federal
jurisdictions in which it does business, PacifiCorp will from time to time be required to produce
Confidential Business Information. PacifiCorp may use its business judgment in its compliance
with all of the foregoing and the appropriate level of confidentiality it seeks for such disclosures.
PacifiCorp may submit Confidential Business Information in regulatory proceedings without
notice to Seller.
23.4 Irreparable Injury: Remedies. Each Party agrees that violation of the terms of this
Section 23 constitutes irreparable harm to the other, and that the harmed Party may seek any and
all remedies available to it at law or in equity, including injunctive relief.
23.5 News Releases and Publicitv. Except as otherwise provided in Section 6.12,
before either Party issues any news release or publicly distributed promotional material regarding
the Facility that mentions the Facility, such Party shall first provide a copy thereof to the other
Party for its review and approval. Any use of either Party's name in such news release or
promotional material must adhere to such Party's publicity guidelines then in effect; any use of
Berkshire Hathaway's name requires PacifiCorp's prior written consent.
a-JI
SECTION 24
DISAGREEMENTS
24.1 Nesotiations. Prior to proceeding with litigation or other means of formal dispute
resolution, the Parties must first attempt in good faith to resolve all disputes arising out of,
related to or in connection with this Agreement promptly by negotiation, as follows. Any Party
may give the other Party written notice of any dispute not resolved in the normal course of
business. Executives of both Parties at levels one level above those employees who have
previously been involved in the dispute must meet at a mutually acceptable time and place within
ten (10) days after delivery ofsuch notice, and thereafter as often as they reasonably deem
necessary, to exchange relevant information and to attempt to resolve the dispute. If the matter
has not been resolved within thirty (30) days after the referral of the dispute to such senior
executives, or if no meeting of such senior executives has taken place within fifteen ( I 5) days
after such referral, either Party may initiate any legal remedies available to the Party. All
negotiations pursuant to this clause are confidential.
24.2 Place of Contract Formation: Choice of Forum. Seller and PacifiCorp
acknowledge and agree that this Agreement has been made and entered into as of the date
executed by both Parties in Salt Lake City, Utah. Each Party irrevocably consents and agrees
that any legal action or proceeding arising out of this Agreement or the actions of the Parties
leading up to the Agreement shall be brought exclusively in the United States District Court for
the District of Utah in Salt Lake City, Utah, or if such court does not have jurisdiction, in the 3'd
Judicial District (Salt Lake County) Court of the State of Utah. By execution and delivery
hereof, each Party (a) accepts the exclusive jurisdiction of such courts and waives any objection
that it may now or hereafter have to the exercise of personal jurisdiction by such court over each
Party for the purpose of any proceeding related to this Agreement, (b) irrevocably agrees to be
bound by any finaljudgment (after any and all appeals) ofany such court arising out ofsuch
documents or actions, (c) irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of venue of any suit, action or
proceedings arising out of such documents brought in such courts (including any claim that any
such suit, action or proceeding has been brought in an inconvenient forum) in connection
herewith, (d) agrees that service of process in any such action may be effected by mailing a copy
thereof by registered or certified mail, postage prepaid, to such Party at its address as set forth
herein, and (e) agrees that nothing herein shall affect the right to effect service ofprocess in any
other manner permitted by law.
24.3 Settlement Discussions. No statements of position or offers of settlement made in
the course of the dispute process described in this section will be offered into evidence for any
purpose in any litigation between the Parties, nor will any such statements or offers of settlement
be used in any manner against either Party in any such litigation. Further, no such statements or
offers of settlement shall constitute an admission or waiver of rights by either Party in
connection with any such litigation. At the request of either Party, any such statements and
offers of settlement, and all copies thereof, shall be promptly retumed to the Party providing the
same.
24.4 Waiver of Jury Trial. EACH PARTY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY AND IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN
38
RESPECT OF ANY LITIGATION BASED ON THIS AGREEMENT, OR ARISING OUT OF,
I,JNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT
EXECUTED OR CONTEMPLATED TO BE E)(ECI.ITED IN CONJIJNCTION WITI{ TIITS
ACREEMENT, OR ANY COI.IRSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRTTTEN) OR ACTTONS OF ANy pARTy HERETO. TIIIS
PROVTSION IS A MATERIAL INDUCEMENT TO EACH OF THE PARTIES I]OR
ENTERING HER"ETNTO. EACH PARTY HEREBY WAIVES ANY RIGHTTO
CONSOLIDATE A}.IY ACTION, PROCEEDING OR COI^JNTERCI.^AIM ARTSING OI.'T OF
OR IN CONNECTION WTTH THIS AGREEMENT OR ANY OTHER AGREEMENT
EXECUTED OR CONTEMPLATED TO BE H(ECUTED IN CONJI,JNCTION WITH THIS
AGREEMENT, OR AI.IY MATTER ARJSING HEREI.'NDER OR THERET'NDE& WITH
ANY PROCEEDINC IN WHICH A JURY TRJAL HAS NOl'OR CANNOT BE WAIVED.
TI{IS PARAGRAPH WILL SURVTVE TT"IE EXPIRATION ORTERMINATION OF T}IIS
AGREEMENT.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their respective nafires as of the date last written below.
CITY OF PRESTON PACIFICORP
By:
Name:
Title:
By:
Name:
Title:
Datie: l/-7O'El Date:lt- lo . )c 17
39
/Lo, t.u
,44*L W, Pc(Y,<r"yflrP{oL
EXHIBIT A
ESTIMATED MONTHLY OUTPUT
2014 KWH 2015 KWH 2016 KWH 2017 KWHMONTH 201.3 KWH
JANUARY 223,L79
FEBRUARY L77,597
MARCH 206.,LO2
APRTL 267,965
MAY 280,980
JUNE 772,576
JULY 280,225
AUGUST 278,798
SEPTEMBER 266,705
ocToBER 276,992
NOVEMBER 234,620
DECEMBER 796,022
L47,3L2
LO7,278
723,236
227,804
256,L60
272,363
270,274
279,326
268,95L
279,395
258,836
249,981,
2L9,637
19&861
24L,X)2
263,533
28L,702
266,29
278,563
276,962
266,L96
227,L79
26L,276
237,75L
205,430
765,926
2@,O27
257,501-
279,477
2il,379
257,764
280,876
277,295
268,362
268,368
278,342
off line
off line
2@,L43
272,996
275,992
258,478
233,692
The amounts shown in yellow above shall reflect the "estimated monthly Net Output" as that
phrase is used in this Agreement.
AVERAGE KWH
19&8sO
L62,4L6
196,O82
257,9@
274,96L
266,W9
2il,lM
223,792
269,782
262,982
255,775
2N,524
EXHIBIT B
DESCRIPTION OF SELLER'S FACILITY
**'rThe Parties ogree that Seller will supplement this exhibit after execution of the
Agreement***
Seller's Facility consists of one generator manufactured by General Electric. More specifically,
each generator at the Facility is described as:
Type (synchronous or inductive):
Model: 8000 5ITB821057A1
Number of Phases: 3
Rated Output (kW): 410 Rated Output (kVA):480
Rated Voltage (line to line):
Rated Current (A): Stator: _ A; Rotor: _ A
kW Maximum kVA Output: _kVAkw
Manufacturer's Guaranteed Cut-in Wind Speed [if appliclllg]l
Maximum kW Output:
Minimum kW Output:
Facility Capacity Rating:kW at
Identify the maximum output of the generator(s) and describe any differences between that
output and the Nameplate Capacity Rating:
Station service requirements, and other loads served by the Facility, if any, are described
as follows:
Location of the Facility: The Facility is to be constructed in the vicinity of Glendale Road in
Franklin County, Idaho. The location is more particularly described as follows:
[Seller to provide legal description of parcelJ
Power factor requirements:
Rated Power Factor (PF) or reactive load (kVAR):
2
EXHIBIT C
SELLER'S INTERCONNECTION FACILITIES
POINT OF DELIVERY / SELLER'S INTERCONNECTION FACILITIES
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EXHIBIT D
REQUIRED FACILITY DOCUMENTS
REQUIRED OF ALL FACILITIES:
QF Certification
Interconnection Agreement, once obtained from PacifiCorp's transmission function
Fuel Supply Agreement, if applicable
REQUIRED IF SELLER ELECTS TO GRANT SENIOR LIEN:
Deed or Lease to Facility Premises
Preliminary Title Report of Premises
Proof of ownership of Facility
Off-take sale agreements, e.g. surplus heat sale contract, if applicable
Depending upon the type of Facility and its specific characteristics, additional Required Facility
Documents may be requested.
EXHIBIT F
CONTRACT PRICE
Contract Price shall be the applicable annual energy rate specified below
multiplied by the applicable monthly weighting factor for On-Peak Hours and Off-Peak Hours.
Year
Annual Energy Rate
s/Mwh
2018 59.1 8
20L9 62.52
2020 64.46
2021 65.70
2022 65.71
2023 66.88
2024 68.98
2025 72.71
2026 75.69
2027 77.46
2028 79.10
2029 80.97
2030 82.12
2031 83.29
2032 84.87
2033 86.16
2034 87.84
2035 89.74
2036 91.67
2037 93.78
Monthly Weighting Factors
Month
On-Peak
Hours
Off-Peak
Hours
January 103o/o 94o/o
February 105o/o 97o/o
March 95%80o/o
April 95o/o 760/o
May 92%63o/o
June 94o/o 65o/o
July 121%92%
August 121o/o 1060/o
September 109o/o 99%
October 115o/o 105o/o
November 110o/o 960/o
December 129o/o 120o/o
2
EXHIBIT G
LEVELIZED SECURITY
[Not applicableJ
J
EXHIBIT H
SELLER AUTHORIZATION TO RELEASE
GENERATION DATA TO PACIFICORP
I Inter co nne c t ion C us to mer Le tter he adJ
Transmission Services
Attn: Director, Transmission Services
825 NE Multnomah, Suite 1600
Portland, OR97232
RE:Interconnection Request
Dear Sir:
hereby voluntarily authorizes PacifiCorp's Transmission business unit to
share ts generator interconnection information and generator meter data
with marketing function employees of PacifiCorp, including, but not limited to those in the
energy supply management group.acknowledges that PacifiCorp did not
provide it any preferences, either operational or rate-related, in exchange for this voluntary
consent.
Name
Title
Date
EXHIBIT I
REQUIRED INSURANCE
L I Required Policies and Coverages. Without limiting any liabilities or any other obligations
of Seller under this Agreement, Seller shall secure and continuously carry with an insurance
company or companies rated not lower than "A-/VII" by the A.M. Best Company the insurance
coverage specified below:
l.l.l Workers' Compensation. Seller shall comply with any applicable laws or statutes,
state or federal jurisdiction, where Seller performs work.
1.1.2 Employers' Liability. Seller shall maintain employers' liability insurance with
minimum limits covering bodily injury for: $500,000 - each accident, $500,000 by disease
- each employee, and $500,000 by disease - policy limit.
I .1.3 Commercial General Liability. Seller shall maintain insurance to include premises
and operations, contractual liability, with a minimum single limit of $1,000,000 each
occurrence to protect against and from loss by reason of injury to persons or damage to
property based upon and arising out of the activity under this Agreement.
1.1.4 Business Automobile Liability. Seller shall secure and continuously carry business
automobile liability insurance with a minimum single limit of $1,000,000 each accident
covering bodily injury and property damage with respect to Seller's vehicles whether
owned, hired or non-owned.
1.1.5 Umbrella/excess Liability. Seller shall maintain umbrella or excess liability
insurance on an occuffence and following form basis with a minimum limits as follows:
(a) Facility Capacity Rating under 200 KW - $1,000,000
(b) Facility Capacity Rating at or above 200 KW - $5,000,000
1.1.6 Property Insurance. Seller shall maintain property insurance covering equipment
and structures in an amount at least equal to the full replacement value for "all risks" of
physical loss or damage, including coverage for earth movement, flood, boiler and
machinery, and business intemrption. The policy may contain separate sub-limits and
deductibles subject to insurance company underwriting guidelines. Property insurance will
be maintained in accordance with terms available in the insurance market for similar
facilities.
1.2 Additional Provisions or Endorsements:
1.2.1 Except for workers'compensation and property insurance, the policies required
herein shall include provisions or endorsements as follows:
(a) naming PacifiCorp, parent, divisions, officers, directors and employees as
additional insureds;
(b) 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 insurance with the insurance required hereunder, and
(c) cross liability coverage or severability of interest.
1.2.2 Unless prohibited by applicable law, all required insurance policies shall contain
provisions that the insurer will have no right of recovery or subrogation against PacifiCorp.
1.3 Certificates. Prior to connection of the Facility to PacifiCorp's electric system, or another
utility's electric system if delivery to PacifiCorp is to be accomplished by wheeling, Seller shall
secure and continuously carry insurance in compliance with the requirements of this Section.
Seller shall provide PacifiCorp insurance certificate(s) confirming Seller's compliance with the
insurance requirements hereunder. Insurance certificate confirming compliance shall be provided
to PacifiCorp by Seller at least annually and each time a new insurance policy is issued or becomes
effective.
1.4 Commercial General Liability coverage written on a "claims-made" basis, if any, shall be
specifically identified on the certificate, and Seller shall be maintained by Seller for a minimum
period of five (5) years after the completion of this Agreement and for such other length of time
necessary to cover liabilities arising out of the activities under this Agreement.
1.5 Periodic Review. PacifiCorp may review this schedule of insurance as often as once
every two (2) years. PacifiCorp may in its discretion require Seller to make reasonable changes
to the policies and coverages described in this Exhibit to the extent reasonably necessary to cause
such policies and coverages to conform to the insurance policies and coverages typically
obtained or required for power generation facilities comparable to the Facility at the time
PacifiCorp's review takes place.
EXHIBIT J
NERC EVENT TYPES
Event
Type
Description of Outages
UI
Unplanned (Forced) Outage-Immediate - An outage that requires immediate
removal of a unit from service, another outage state or a Reserve Shutdown state.
This type of outage results from immediate mechanical/electrical/hydraulic
control systems trips and operator-initiated trips in response to unit alarms.
U2
Unplanned (Forced) Outage-Delayed - An outage that does not require
immediate removal of a unit from the in-service state but requires removal within
six (6) hours. This type of outage can only occur while the unit is in service.
U3
Unplanned (.Forced) Outage-Postponed - An outage that can be postponed
beyond six hours but requires that a unit be removed from the in-service state
before the end of the next weekend. This type of outage can only occur while the
unit is in service.
SF
Startup Failure - An outage that results from the inability to synchronize a unit
within a specified startup time period following an outage or Reserve Shutdown.
A startup period begins with the command to start and ends when the unit is
synchronized. An SF begins when the problem preventing the unit from
synchronizing occurs. The SF ends when the unit is synchronized or another SF
occurs.
MO
Maintenance Outage - An outage that can be deferred beyond the end of the next
weekend, but requires that the unit be removed from service before the next
planned outage. (Characteristically, a MO can occur any time during the year, has
a flexible start date, may or may not have a predetermined duration and is usually
much shorter than a PO.)
ME
Maintenance Outase Extension - An extension of a maintenance outage (MO)
beyond its estimated completion date. This is typically used where the original
scope of work requires more time to complete than originally scheduled. Do not
use this where unexpected problems or delays render the unit out of service
beyond the estimated end date of the MO.
PO
Planned Outage - An outage that is scheduled well in advance and is of a
predetermined duration, lasts for several weeks and occurs only once or twice a
year. (Boiler overhauls, turbine replacement or inspections are typical planned
outages.)
PE
Planned Outage Extension - An extension of a planned outage (PO) beyond its
estimated completion date. This is typically used where the original scope of
work requires more time to complete than originally scheduled. Do not use this
where unexpected problems or delays render the unit out of service beyond the
estimated end date of the PO.