20020430Comments of NuWest Industries.pdf

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Conley Ward ISB #1683
GIVENS PURSLEY LLP
277 North 6th Street, Suite 200
O. Box 2720
Boise, ill 83701
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Attorneys for Nu- West Industries, Inc.
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF : CASE NO.: PAC-02-
P ACIFICORP DBA UTAH POWER & LIGHT
COJvIP ANY FOR APPROV AL OF CHANGES : COMMENTS OF NU- WEST
TO ITS ELECTRIC SERVICE SCHEDULES : INDUSTRIES, INC.
Nu- West Industries, Inc. ("Nu- West"), by and through its attorneys Givens Pursley
LLP, submits the following Comments in response to the Idaho Public Utilities Commission
Commission ) Notice of Stipulation and Proposed Settlement in the above entitled case.
Nu- West operates a phosphate fertilizer production facility near Soda Springs, Idaho.
Nu-West is PacifiCorp s second largest Idaho customer with a peale demand of approximately
000 kilowatts. Although the Nu- West facility has been through a number of ownership
changes over the years, it has been a PacifiCorp customer for at least three decades.
On June 9, 1998, Nu-West and PacifiCorp entered into a Master Electric Service
Agreement ("1998 Agreement"), in which PacifiCorp agreed to supply Nu-West's electric power
and energy up to a peak contract demand of22 000 kilowatts for approximately three and one
half years, through December 31 2001. The price for this power was fixed for the term of the
1998 Agreement at $.033/kwh ifNu-West exceeded the stated minimum annual consumption
figures, and $.034339/kwh ifNu- West's con,sumption fell below the minimum. The 1 QOQ
Agreement contained no provisions pernritting the Connnissioll to alter Nn-Wes!'s rate
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fi1J::the life of the contract. A copy of the 1998 Agreement is attached as Exhibit A.
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Through an oversight, PacifiCorp neglected to immediately file the 1998 A
COMMENTS OF NU-WEST INDUSTRIES INe.-
for Commission approval. On March 17 2000, PacifiCorp belatedly filed for approval of the
1998 Agreement, and approval was granted with a retroactive effective date of July 1 , 1998.
Order No. 28399, Case No. P AC-00-3 (June 13, 2000) (Copy attached as Exhibit B).
Shortly before the expiration of the 1998 Agreement, PacifiCorp and Nu- West
entered into a new Electric Service Agreement dated December 10 2001 ("2001 Agreement"
A copy of the 2001 Agreement is attached as Exhibit C. Unlike the prior 1998 Agreement, the
2001 Agreement specifically addresses the Commission s ratemaldng authority. Section 8.3 of
the 2001 Agreement states:
The parties agree that the Commission has the authority to modify the
rates for service under this Agreement under the same standard that
applies to tariff customers generally. Accordingly, surcharges or credits
that apply to service to tariff customers generally will also apply to service
under this Agreement.
However, the Agreement also contains a provision in Section 4.2, which provides that Nu-West's
rates shall be adjusted annually according to a prescribed formula that constitutes "the sole and
exclusive means of adjustment."
In its Comments on the 2001 Agreement, Staff questioned the apparent conflict
between Sections 4.2 and 8., and requested clarification from PacifiCorp. According to the
Commission s order
PacifiCorp replied that Section 8.3 of the submitted Agreement controls.
If the Commission were to find that some particular rate is the just and
reasonable rate to be charged Nu- West, that determination would apply
notwithstanding the rate calculated under the other terms of the
Agreement. Ifhowever, there were not a specific Commission
determination of the rates for Nu- West (for instance, if a general rate
increase were spread by stipulation), the Company contends that the rates
for Nu- West would be established pursuant to Section 4.
Order No. 28984 at 4, Case PAC-0l-17 (March 27 2002) (emphasis added). A copy of Order
No.28984 is attached as Exhibit D. With tins clarification, the Commission approved the
contract, finding "the remaining contract terms, as clarified, to be acceptable.!d.
COMMENTS OF NU-WEST INDUSTRIES INC. - 2
Shortly after PacifiCorp filed the 2001 Agreement with the Commission, PacifiCorp
filed its Application in the present case on January 7 2002, seeking authority to recover $38
million in excess net power costs incurred from November 1 , 2000 through October 31 2001.
The Commission initially authorized the deferral of these costs for possible later recovery in an
order dated November 1 , 2000. As filed, the Application did not seek any recovery of any of the
extraordinary power costs from Nu- West.
It was not until the Commission issued its Notice of Stipulation and Settlement in
this case on April 22, 2002, that Nu- West had any notice that its contract rates were at issue in
this proceeding. Attachment B to the Stipulation and Settlement now proposes to impose a
$936 000 power cost surcharge on Nu- West. After giving effect to a rate mitigation adjustment
to Nu-West of $777 000, the net effect is a $159 000 per year rate increase for Nu-West in each
of the next two years.
This unannounced attempt to shift nearly $1 000 000 a year in power cost surcharges
to Nu- West is unreasonable and unlawful in several respects. In the first place, the attempt to
recover from Nu-West for excess power costs incurred during 2000 and 2001 is clearly at odds
with the terms ofthe 1998 Agreement that was in effect during that period. The 1998 Agreement
provided for fixed rates during the term of the Agreement, and neither PacifiCorp nor the
Commission was authorized to alter those rates except upon an extraordinary showing that the
rate "is so low as to adversely affect the public service-as where it might impair the financial
ability of the public utility to continue its service, cast upon other consumers an excessive
burden, or be lmduly discriminatory.Agricultural Products Corporation v. Utah Power
Light Co.98 Idaho 23 , 29, 557 P.2d 617 (1976). No such showing has been made, or even
attempted, in tins case.
The fact that PacifiCorp was allowed to defer recovery of its excess power supply
costs until after the expiration of the 1998 Agreement does not change the applicability of the
Agricultural Products rule. The Commission cannot do indirectly what it is prohibited from
doing directly. If an authorized deferral of costs could be used to skirt the Agricultural Products
COMMENTS OF NU-WEST INDUSTRIES INe. - 3
rule, the rule would be a dead letter because the Commission could circumvent it at will. There
is no basis in law or equity for an attempt to do so in this case. The simple fact is that PacifiCorp
contractually agreed to specific rates for the period from 1998 through 2001 irrespective of its
cost of service. If costs had decreased during the contract rate period, Nu- West clearly would
not now be allowed to recover the difference as an alleged overpayment.
The Stipulation and Settlement's treatment ofNu-West is likewise a breach ofNu-
West's existing contract and a violation of the Commission order approving the 2001
Agreement. As Order No. 28984 makes clear, the 2001 Agreement contemplated that Nu-West
would not be subject to general rate proceedings as a matter of course. The parties intended the
contract rates to apply unless and until the Commission specifically determines that the Nu-West
contract rates are unjust and unreasonable. PacifiCorp s initial application in the present case
filed less than a month after the 2001 Agreement was signed and while the 2001 Agreement was
awaiting approval, is compelling evidence that PacifiCorp understood that Nu-West was
contractually excluded from rate adjustments in cases such as this. Moreover, the Commission
order approving the 2001 Agreement explicitly approved the clarification of the parties intent
and acknowledged that Nu-West would not be subject to "a general rate increase. . . spread by
stipulation. "
All ofPacifiCorp s and the Commission Staffs actions during the Agreement
approval process were consistent with the understanding that Nu- West's contract rates would be
exempt from the pending surcharge. Nu- West justifiably relied on those actions and
representations in seeking approval of the Agreement, and it had every reason to believe this
understanding was confirmed by the Commission order approving the 2001 Agreement. Under
these circumstances, PacifiCorp and the Commission Staff cannot be allowed to now reverse
course and argue for a Nu-West charge that they Imew, or should have Imown, was barred by the
2001 Agreement. This is precisely the type of inequitable change of position that is forbidden by
the doctrine of estoppel.
Finally, the Stipulation and Settlement clearly deprives Nu- West of due process of
COMMENTS OF NU- WEST INDUSTRIES INe. - 4
law. Nu- West had no notice that any party was seeking to include it in the surcharge case until
the Commission issued its Notice of Stipulation and Settlement on April 22, 2002. That Notice
provided Nu- West with only eight days to prepare comments or file testimony. While Nu- West
has managed to meet this filing deadline with its comments, it obviously cannot adequately
prepare for evidentiary proceeding or provide testimony in the short time allowed by the
Commission s filing deadline.
For the above and foregoing reasons, Nu- West requests that the Commission
order the amendment of the Stipulation and Settlement prohibit any power supply surcharge on
Nu-West's existing rates.
RESPECTFULLY SUBMITTED this 30th day of April, 2002.
COru
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GIVENS PURSLEY LLP
Attorneys for Nu- West Industries, Inc.
COMMENTS OF NU-WEST INDUSTRIES INC. - 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 30~ay of April, 2002, I caused to be served a true
and correct copy of the foregoing by the method indicated below, and addressed to the following:
Jean Jewell
Idaho Public Utilities Secretary
472 W. Washington Street
O. Box 83720
Boise, ill 83720-0074
- U.S. Mail - Fax ..1L By Hand
Eric L. Olsen
Racine Olson Nye Budge & Bailey
O. Box 1391
Pocatello, ill 83204-1391
1L U.S. Mail - Fax - By Hand
Doug Larson
PacifiCorp
201 S. Main, Suite 2300
Salt Lalee City, UT 84140
lL U.S. Mail - Fax - By Hand
Randall C. Budge
Racine Olson Nye Budge & Bailey
O. Box 1391
Pocatello, ill 83204-1391
1L u.S. Mail - Fax - By Hand
James R. Smith
Monsanto Company
O. Box 816
Soda Springs, ill 83276
1L U.S. Mail Fax ByHand
Anthony J. Yankel
29814 Lake Road
Bay Village, OH 44140
1L U.S. Mail - Fax - By Hand
Timothy Shurtz
411 S. Main
Firth, ill 83236
lL U.S. Mail - Fax - By Hand
John Eriksson
Stoel Rives LLP
201 S. Main, Suite 1100
Salt Lake City, UT 84111
1L U.S. Mail - Fax - By Hand
;21( J///l,Tina Smith
COMMENTS OF NU-WEST INDUSTRIES INe. - 6
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lViASTER ELECTRIC SERVICE AGREEMENT
between
PACIFICORP
and
NU-WEST INDUSTRIES INC. -l rH
This MASTER ELECTRIC SERVICE AGREEMENT ("Agreement"), entered into on this
,.-
day of Jutle, 1998 , is by and betVleen PacifiCorp, an Oregon corporation that provides retail electric I;/?/.
service and Nu-WestIndustries Inc. ("Nu-West"), a wholly ov.'lled subsidiary of Agrium U.S. Inc., a
Delaware corporation conducting business through facilities for the production of phosphate fertilizer
located at Soda Springs, Idaho.
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WHEREAS, PacifiCorp is a provider of retail electric energy and power, hereinafter referred to
as "Finn Power and Energy," and
W1-IEREAS, Nu- West and PacifiCorp have entered into a power purchase and sales agreement
for its Soda Springs, Idaho, facilities (hereinafter refeITed to as "Facilities ), under which agreement
PacifiCorp is the exclusive provider of electric power and energy to the Facilities, and
WHEREAS, under the existing agreement the relationship between the parties-would tenninate
on August 16, 1998 , and under this Agreement the parties wish to extend their business relationship for
an additional three and one-half (3 v,,) years, and
WHEREAS , PacifiCorp. desires to be the exclusive provider of all Firm Power and Energy to the
Facilities as described above.
NOW, THEREFORE, the parties hereto agree as rollows:
SECTION I: DEFINITIONS
As used in this Agreement, the following tenns shall have the following meanings:
1.1 Agreement:This Electric Service Agreement and any renewals thereof.
Billiuf! Period: The period or approximately thirty (30) days intervening between regularsuccessive meter readings.
1.3 Commission: The, Public Utilities Commission or the state ofIdaho.
1.4 Contract Demand: The specified Demand in kW that Nu- West agrees to purchase and
that PacifiCorp agrees to supply and have available for delivery to Nu- West.
Contract Year:A twelve (12)-month period commencing on July 1 annually and ending
on midnight of June 30 of the year following,
Customer Choice Availability Date:The date upon which Idaho state law, the
Commission, or PacifiCorp by voluntary tariff filing, aIlows other suppliers of electric. power and energy
open access to serve Nu- West's FacHities.
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Demand : The rate in kW at which PacifiCorp delivers electric energy to Nu- West either
at a given instant or averaged over any designated period oftime.
1.8 Electric Service Regulations : PacifiCorp s currently effective electric service
regulations, on file "\-"ith and approved by the Commission.
Electric. Service Schedule: PacifiCorp s currently effective electric service schedule, on
file with and approved by the Commission.
10 Firm Power and Eneri!Y : Electric power expressed in kilowatts (tlkW" ) and associated
energy expressed in kilowatt-hours ("kWh") intended to have assured availability to Nu-West to meet
all or any agreed-upon portion ofNu- West's load requirements
1.11 Measured Demand: The Demand in kW as shown by or computed from the readings of
PacifiCorp s power (Demand) meter for the IS-minute period ofNu- West's greatest use during the
Billing Period, adjusted for Power Factor as specified in the applicable Electric Service Schedule.
12 Power Factor: The percentage detennined by dividing Nu- West's average power use in
kW (real power) by the average kilovolt-ampere power load (apparent power) l'u- West imposes upon
PacifiCorp.
SECTION 2: TERM AND TERMINATION; EARLY TERMINATION CHARGE
Term : This Agreement shall be in full force and effect commencing upon July 1 , 1998
(" Effective Date ). This Agreement shall remain in full force and effect until December 31 , 2001, and
shan automatically be renewed from year to year subject to the same terms and conditions thereafter
unless either party submits written termination notice to the other party not less than thirty (30) nor more
than sixty (60) days prior to expiration of the initial term or any renewal tenn.
2.2 Extension of Ae:reement:Ninety (90) days prior to the termination of this Agreement the
parties shall meet in a good faith attempt to negotiate an extension ofthis Agreement under mutually
satisfactory terms and conditions.
SECTION 3: DELIVERY OF AND CHARGES FOR FIRM POWER AND ENERGY
Contract Demand and Request for Additional Contract Demand : The Contract Demand
for deliveries under this Agreement is twenty-two thousand kilowatts (22,000 kW). PacifiCorp shall
deliver such amounts of Finn Power and Energy as Nu. West requires to meet its load requirements up to
but not in excess of, such Contract Demand. Upon PacifiCorp s receipt afNu-West's written request for
additional Firm Power .md Energy, PacifiCorp shall make all reasonable attempts to supply such
additional Finn Power and Energy lmder terms and conditions acceptable to both parties. Within fifteen
(15) days of the request PacifiCorp shall advise Nu- West in writing whether the additional Finn Power
and Energy is or can be made available. IfPacifiCorp does provide Nu-West with Firm Power and
Energy in excess of the Contract Demand commitments, such deliveries shall tTigger a Contract Demand
superseding that specified in this section.
3.2 Purchase Prices : Nu- West shall pay the prices spedfied for the periods and quantifies set
forth below:
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Period Quantitv in kWh Price
Contract Years 1998
through 2001
0 to 114 572 379
114 572 380 and above
034339/kWh
$ .
033 OOO/kWh
July 1, 2001 through
December 31 2001
0 to 55 865 999
866 000 and above
O343391k\Vh
033000/k%
PacifiCorp shall compute Nu- West's bills for each Billing Period using the price of thirty-three mils per
kilowatt-hour ($.033/k.Vlh). In the event that Nu-West has not consumed the minimum amount to
qualify for such price by the end of each Contract Year of applicable period, PacifiCorp shaH recalculate
Nu- West's bills using the higher price per k'vVh , including interest at the rate then specified by the
Commission or, if no rate is specified, the then-effective prime rate as established by the Morgan
Guaranty Trust Bank ofN ew Y ork~ provided, that in the event PacifiCorp is unable to supply Firm
Power and Energy for reasons specified in section 8 of this Agreement, the amount of energy required to
qualifY for the lower price shall be reduced by 31 390 kWh for each full day of such inability. Nu-West
shall pay all bills, including recalculated bills, within thirty (30) days of receipt.
Commencement of Deliveries: PacifiCorp shall make initial deliveries under this
Agreement on July t 1998.
3.4 Point ofDeliverv: The Point of Delivery for all Firm Power and Energy delivered to Nu-
West shall be at the existing points of interconnection between PacifiCorp and Nu- West.
Delivery Voltage : PacifiCorp shall deliver Firm Power and Energy at the Point of
Delivery in the form of three-phase, alternating cunent at a !lominal frequency of 60 Heliz, and at a
nominal voltage of 46,000 volts.
Reactive Reauirements : Nu- West shall control and limit the flow of reactive power
between PacifiCorp s and Nu-WeBt's system so as to maintain a Power Factor of between eighty-five
percent (85%) lagging and eighty-five percent (85%) leading. IfNu- West's Power Factor adversely
affects operation ofPacifiCorp s facilities or adversely affects PacifiCorp s other customers, Nu-West
shall install at Nu- West's expense switched capacitors , synchronous condenser.s, or such other devices
and equipment as PacifiCorp may reasonably require to eliminate that portion of unscheduled reactive
power flow which causes the Power Factor below or above the limits established herein. Should Nu-
West fail to take requested corrective action requested by PacifiCorp within one hundred eighty (180)
days after written notice from PacifiCorp, PacifiCorp may perform such services or supply and install
such equipment as it deems reasonably necessary to provide colTective action, whereupon Nu-West shall
compensate PacifiCorp for all reasonable sums expended and all services contracted or perfo11lled
including PacifiCorp s standard overhead costs plus ten (10%) percent of all expenditures. Nu- West
shall pay such sums within thirty (30) days after PacifiCorp has mailed to Nu- West an itemized
statement of its charges therefor.
SECTION 4: PRICES OF AND PAYMENT FOR POWER AND ENERGY
Statements: All billing statements shall show the amount due for the type and quantity of
power and energy purchased.
Price for Power and Energy : Nu- V'l est shall pay the following prices fOT all deliveries of
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Finn Power and Energy under this Agreement:
4.2.From the Effective Date of this Agreement until the Customer Choice
Availability Date, Nu- West shall pay the prices specified in section 3.2 for all kWh
delivered hereunder.
By providing PacifiCorp written notice at least thirty (30) days prior to
the Customer Choice Availability Date, Nu-West may elect to have prices for power and
energy under this Agreement based upon market conditions commencing upon the
Custome,r Choice Availability Date. In the event of such election, the monthly price
shall be based upon the monthly spot market index determined by the daily average of
the California-Oregon border (" COB") prices as published in the Wall Street Journal
(" DJ COB prices ) during the Billing Period and weighted by the finn index for heavy
load hours (between 6:00 a.m. and 10:00 p.) and by the non-firm index for light load
hours (daily between 10:00 p.m. and 6:00 a.m. and on Sundays and Holidays), plus all
transmission charges and applicable line losses, to which sum PacifiCorp shall add four
mills per kWh ($.004/kWh). Nu~ West may elect to retain such prices for the duration of
this Agreement.
1 To establish daily DJ COB on-peak firm prices for
cun-ent deliveries, PacifiCorp shall use for billing purposes the average
of the daily on-peak firm prices rrom the previous month.
2 Until Dow Jones publishes prices for firm off-peak
deliveries, to establish monthly prices for current deliveries for
Nu-West's firm off.peak usage PacifiCorp shall use for billing purposes
the average of the daily non~firm off-peak prices. In the event that Dow
Jones begins publishing a DJ COB off-peak firm price index, such DJ
COB off-peak fiITl1 index shall replace the off-peak non-firm index in
computing Nu- West's off-peak prices.
Pavrnents and Dispute Resolution: All bills shall be paid by the due date ofthe bi1l, and
late charges shall be imposed upon any delinquent amounts. IfNu-West disputes any portion ofNu-
West's bill , Nu- West shall pay the total bill and shall designate the disputed portion, whereupon the
dispute shan successively be forwarded to the next higher level of management in each of the companies
until the dispute is resolved or the highest levels of management are unable to resolve such dispute, in
which case the matter shall be submitted to binding arbitration pursuant to the provisions of Title 7,
Chapter 9, of the Idaho Code
, "
Uniform Arbitration Act." AllY refund PacifiCorp determines Nu-West
is due shall bear interest at the rate then specified by the Commission or, if no rate is specified, the the11-
effective prime rate as established by the Morgan Guaranty Trust Bank of New York.
SECTION 5: METERING
Metering Equipment: PacifiCorp shall provide, maintain, and test meters and metering
equipment required for biUing purposes. The parties shall specify the locations for PacifiCorp
installation of metering equipment in Nu- West s premises, and N u- West shall allow PacifiCorp access to
such locations without charge during reasonable business hours.
Telecommunications Facilities:Upon PacifiCorp s request, Nu-West shall install a
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dedicated telephone line for meter reading purposes without charge to PacifiCorp. PacifiCorp shall pay
all recurring charges related to line operation.
5.3 Secondary Metering:Ifthe Point of Delivery is on the primary side ofNu-West's
transformers, PacmCorp may install its meter on the secondary side of the transfonners, whereupon
transformer and other losses occurring between the Point of Delivery and the meter shall be computed
and added to the meter readings to determine the monthly demand and energy consumption.
5.4 Transformer Loss Curves: If Nu- West takes service at primary voltage and if secondary
metering is used, Nu-West shall, prior to commencement of service, provide PacifiCorp with transformer
loss curves and test data to allow PacifiCorp to calculate transformer losses for biUing purposes.
SECTION 6: IN1EGRATION
This Agreement replaces and supersedes in their entirety all prior agreements between the parties
related to the same subject matter, including without limitation that certain agreement between the
parties dated August 17, 1987, and all subsequent amendments.
SECTION 7; JURISDICTION OF REGULATORY AUrnORITIES
Nu-West acknowledges that it is familiar with the Electric Service Schedule and Electric Service
Regulations and agrees to abide by them and all amendments and changes thereto so approved by the
Commission. In the event that the Commission or any other state, federal, or municipal authority issues
any rules, regulations, or orders which require PacifiCorp to alter or amend any ofthe provisions of this
Agreement or to terminate or curtail the delivery of Firm Power and Energy to Nu~ West, PacifiCorp
shall not be liable to Nu- West for damages or losses of any kind whatsoever which N u- West may sustain
as a result of such rule, regulation, or order, including consequential damages.
SECTION 8: FORCE MAJEURE
Neither Party shall be subject to any liability or damages for inability to provide or receive
service to the extent that such failure shall be due to causes beyond the control of either PacifiCorp or
Nu-West, including, but not limited to, the following: (a) the operation and effect of any rules
regulations and orders promulgated by any Commission, municipality, or governmental agency of the
United States, or subdivision thereof; Cb) restraining order, injunction or similar decree of any court;
war;' Cd) flood; (e) earthquake; Cf) sudden and accidental operating event including, but not limited to
fire or explosion; (g) act of God; (h) sabotage, or (i) strikes or boycotts. Should any ofthe foregoing
occur, the price for power that would otherwise be applicable under this Agreement under section 3.
shall be adjusted to reflect the existence ofthe force majeure event; provided, the party claiming force
majeure shall make every reasonable attempt to remedy the cause thereof as diligently and expeditiously
as possible.
SECTION 9: rvnSCELLANEOUS
Execution in Counterparts: This agreement may be executed in counterparts, and each
one taken together shall constitute one in the same instrument.
Modification: This Agreement may not be amended, modified or supplemented, except
in writing signed by both parties.
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9.3 Nonwaiver: No delay on the part of either party in exercising any right or remedy under
this Agreement shall operate as a waiver thereof. No prior waiver on the part of either Party, nor any
single or partial exercise of any right under this Agreement shall preclude any other further exercise
thereof of any other right under this Agreement.
9.4 Illel2alitv: Except with respe,ct to those material provisions, the absence of which would
render this Agreement impossible to perform, any section, paragraph or provision declared or rendered
unlawful by a court of law or regulatory agency with jurisdiction over the parties or subject matter
hereof, or deemed unlawful because of a statutory change, shall not otherwise affect the lawful
obligations that arise under this Agreement. In the event any provisions of this Agreement is declared
invalid, the Parties shall
promptly negotiate in good faith to restore this Agreement to its original intent ant effect to the
maximum extent possible, consistent with the relevant regulatory or judicial decision.
Assignment:This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, assigns, partners and/or legal representatives. This Agreement
may not be assigned by either Party without the prior written authorization of the non-assigning party;
provided, either Party may voluntarily transfer its rights and obligation hereunder as an incident to any
sales, merger, or other transfer of all or substantiaHy aU of its assets without the prior written
authorization of the non-assigning Party.
Choice of Law: This Agreement shall be subject to and construed under the laws of the
state of Idaho.
Notice: Any notice required to be given hereunder shall be deemed to have been given
when it is sent, with postage prepaid, by registered or certified mail, return receipt requested, to the
parties hereto at their respective addresses as follows:
If to Nu- West:
Agrium U. S. Inc.
Suite 426, 10333 Southport Rd, SW
Calgary, Alberta, Canada T2W 3X6
Attention: Dave DeBiasio
If to Pacifi Corp:
PacifiCorp
105 Commerce Drive
Evanston, Wyoming 82930
Attention: Mike Pommarane
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. -
n~ \VITNBSS \VlIERTIOI', th,~ pa1'tic2 hereto have com:",d thi~ Agreement to bf'. ~"XIf1r.ntfjl1 hy
persons duly authorized as of the date first above \vritten.
DJlCI~ICOi.Y NT,1.WHRT 1NlI1JST.N,~ INC.
Dy: Py~ ";:3
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Office of the Secretary
Service Date
June 13 2000
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF)
PACIFICORP DBA UTAH POWER & LIGHT)
COMPANY FOR APPROVAL OF A SPECIAL)
CONTRACT FOR SERVICE TO NU-WEST)INDUSTRIES, INC.
CASE NO. P AC-OO-
ORDER NO. 28399
On March 17, 2000, PacifiCorp dba Utah Power and Light Company (pacifiCorp;
Company) filed an Application with the Idaho Public Utilities Commission (Commission)
requesting approval of a Special Contract, a Master Electric Service Agreement (Agreement)
dated June 9, 1998, with Nu-West Industries, Inc. (Nu-West).
Nu West is a producer of phosphate fertilizer in Soda Springs, Idaho. Nu-West's
electric load exceeds 15 MW, which requires a Special Contract in Idaho. Reference Utah
Power Tariff Schedule 9; Schedule 400. Rates in the new Agreement are 3.3 ~/kWh for all kWh
if Nu-West uses a minimum amount of energy. If Nu-West uses less than the minimum on an
annual basis, it pays 3.4339 ~/kWh for all kWh.
The submitted Agreement was negotiated in 1998 for a three and one-half year
minimum term that ends December 31 , 2001. Thereafter, the Agreement is automatically
renewed from year to year subject to the same terms and conditions... unless either party
submits written termination notice... (Section 2.1) An oversight on the Company s part resulted
in the Agreement not being filed for Commission approval until this time.
On April 25 , 2000, the Commission issued a Notice of Application and Modified
Procedure in Case No. PAC-00-3. The deadline for filing written comments was May 16
2000. Timely comments were filed by Commission Staff and Solutia Inc.
Based on its analysis, Staff concludes that the proposed contract rates cover the
Company s costs and provide the Company with a reasonable return. Staff recommends that the
Agreement be approved as filed, for an effective date of July 1 , 1998. Staff recommends that the
Company include language in future contracts requiring Commission approval to malee the
contract rates effective. Staff also recommends that upon approval the Commission require the
Company to file a schedule summarizing the contact rates.
EXHIBIT
.D . /J
//)Jeitltsf UJI'J1!87
ORDER NO. 28399
Solutia, also a special contract customer, files no substantive comments regarding the
Application.
COMMISSION FINDINGS
The Commission has reviewed and considered the filings of record, submitted
contract and comments in Case No. PAC-00-3. We continue to fmd it reasonable to process
this case pursuant to Modified Procedure, i., by written submission rather than by hearing.
Reference IDAPA 31.01.01.204.
The Nu-West service contract is dated June 9, 1998 , and its initial term expires
December 31 2001. We limit our approval in this case to the rates only. To encourage better
special contract management practice by the Company, the Commission fmds it reasonable to
adopt Staffs recommendation and require that all special contracts for PacifiCorp s Idaho
service territory include language requiring Commission approval to make the contract rates
effective.
We find the Nu-West contract rates to be fair and reasonable and further fmd it
reasonable to approve same for effective date July 1 , 1998. The Company is directed to file a
schedule with the Commission summarizing the contract rates approved.
CONCLUSIONS OF LAW
The Commission has jurisdiction over PacifiCorp dba Utah Power & Light Company,
an electric utility, and its Application in Case No. P AC-00-3 pursuant to the authority and
power granted under Title 61 of the Idaho Code and the Commission s Rules of Procedure
IDAPA 31.01.01.000 et seq.
ORDER
In consideration of the foregoing and as more particularly described and qualified
above, IT IS HEREBY ORDERED and the Commission does hereby approve the rates set forth
in the Company s June 9, 1998, service contract with Nu-West Industries, Inc. for effective date
July 1 , 1998.
TI-llS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
ORDER NO. 28399
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code 9 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this /' P? ..bL
day of June 2000.
MARSHA H. SMITH, COMMISSIONER
ATTEST:
~r2~\~
Myrna J. lters
Commission Secretary
vld/O:PAC-OO-sw2
ORDER NO. 28399
04/26/02 13: 52 FAX 403 225 AGRlml - NAW
Aw24.-1J2 D7 :40am F rom-PAC I F I CORP UO1Z2US118 T-143
I4J 009
OO1/005 F-S50
Offi= oftfie Ser.:t=.'j'
Sel"lricc Dme
March 17. .200:!
BEFOP~ THE IDAHO CPiJBLIC Uttt.ri LES COr11MISSION
IN THE lVi-A TI'OF THE J..PPIJ;CATION
OF P ACIFlCORP DBA UTAH POVi.1ER &:LIGHT COMPAI\ty FORAPPROV.A.L OF
AN ~i ,CTP.lC SERVICE AGREEMENT
VVITH 1'e'1J- 'WEST Th"DUSTRIES.
) CASE NO. PAC-E-Ol..17
) ORDER NO. 28984
On De~~bl:r 26~ 2001, PacifiCorp cilia. Utah. Power & Light Company (Pa.c:itiCmp;Company) frIed an Application ;,vim l~e Idaho Public Utilities Co:m.mission (Commission)re:quemng approval of all Electric: Service Agreement (Agreement) with Nu- West Industries(Nu-West) dated December 10, 2001. TIu~ Agreement, along \-\i.th a. separate agreement, enteredinto under Eler:tric Service Schedule No.9. replaces an electric service agreement (priorAgreement) dated June 9, 1998, approved by the Comwissil?n in Case No. PACmE.OO~3.Nu-West is engaged in the production of phosphate ferti~ at fa~iIities located inSoch Springs. Idaho.
The Prigr Agree~nem governing electric:: s~.nrice: to NusWest terrainated onDecember 31, 2001. Rates under the Prior Agreement were OJ.3rt peL" kilowatt-hour for aUkilowatt-hou.rs if Nu.West used a specific minim1lrJl amount of e:m::rgy. However. j.f Nu.Westused less
~.
the minimom amount on an annual basis. it paid 03.4.3 3 9rt per kilowatt hour for allkilowatt bourn.
Rates; for service to Nu~ Wem under the Agreement subniittr..a are based, theCompflIlY contends, on the tost of .\ierving Nuw W est Accompanying the CQmpany~ s Applicationis a surttrnary of !he tost-of..service stUdy resul!:E: for servic:e 'to Nu~We!st. Due to the size of its
load (approximately 20 000 kVi!). a special agreement applies IDstc;:ad of an electricservitesche:dule. The Ag;reem~nt, the Company cDI'6T.ends. is effectively a. cUstomer~S'pecifio tmiffsch~dt:l1e. By its terms
the Agreement it effeotxve January 1 , 2002. subjeCt to approval by the
Com:rnission.. end wllJ ter.m.lnate OIl December 31, 2004, u.nl~ss: fe-newed in ac::c::ordance with theAgreemems term$.
re:fiec:ted in SecticHJ 4 of the Agreement, thf'.. foBov,:ing mcIltWy charges win applyuo Nu.~ "it" est:
ORDER NO. 2(;984
~BITD /')
.LrfJJ dJ) -f.tJd O/"llrJf!fll
..:;.
04/213/02 13: 52 FAX 403 225
Apr-:Zo:l~QZ 07 : 40 aii'I ~ rom~rAC I F I caRr
..-- .~ -.
CUStomer Charge
D-=:r.and Ch3:rg$
Energy Charge
Heavy Load Hours
(HLhl
Light Load Hours
(LLH)
AGRUTM - NAW 141010
F~35D+BO1ZZQSl15 H43 002l005
. , .
55 Per Month
515 Pc:r kV/-Month
r~3V...oc:tober N ovember...ADril
$282.$282.
$ 11.00
S 22.18.
S 17.$ 17.
SS Per M"Wh
Monday- Friday
!iEO800-fffi2300 MPT
;5-J1 other ho!.1.t1; and holidays
These Agreement changes v.."iU result in an effective rate of3.384~IkWn..
The dema,."1d and energy charges identified in the Agreement are to be UI1ifotm)y adjust~dannualJ)! effective january 17 2003 and each January 1 thereafter in accorda.nce with the formulaset: out in the Agreement. Agreement Section 4.2.
A separate agreemem under electric service Schedule No.
9 has beeI1 entered into for
~i"i "" Nu-W"",, Mountain Fuel SubStation. The emotive rate for that part of Nu-
Wost'servi~e under Schedule 9 'viIi" be 4.232~JkWh. The overall effective rAte for all of Nu-Wesrservice (Agreement and Schedule 9) is 3A8clk:\Vh.
Regarding jurisdiction of regulatory authorities, Se~rlon 8 of the Agreement includes the .foI1owing language:
TIns Agr~em~t: is subject to approval
of the Commission, In the event theConuni!;sion Order approving this Agreement either requjres imputation ofrevenUe to PacifiCorp. or provides for possible
futUre imputatIon of r~venuesto PadfiCorp. PacifiCorp may terminate this A~ent by providing Nu-West notice within
3D days of entry of the Commission s Order. In the ~""'t:ntthe Commission Order approving this Agreement does net pro'\Tide for thedirect assignmem or the revenues and
c-,osts of this Agreement to !he Idahojuri~dicti6n for l'att:maldIlg purpos;~s, PacifiCorp may terminate thisAgreernen.l by providing Nu-West notice wjthin 30 da)/s of the entry
of theCommissions Order. In the event that the Commission Order approving thisAgreement contains any condition that is materially
adverse to either party,the party arlverse:ly impacted by the condition may terminate this Agreementby providing rhe other parry
nDri~~ withil:1 30 days of 'the entry of theCOmmim:jol'1 s Order.
The pan.ie~ agree that the COrrmtiS$km ha.c; the authority to fuodify the ratesfor service under this .greebJir::nt Ubder 1!:he same: ~tandard that applies to'
()RDER :r,ro" 28984
04/26/02 13; 53 Fful 403 22?-
i'\prMZ4-Dl 07: 41 am rrDm-P,ACI F I CORP
AGRIUM - NAil'L._
+aO122Q31\8 i~143
141011
P. DDS/DOS F-g60
!ant: Ctmom"" i"n.....uy.
ACcording!" ~'-
' .
ser'YJ"'e to """':- h "'o.u.!:.Cm Ees
or edits ,..i..ft r
I" """'L~ CU5tomers g;enerally will al ""
"'~
""""Gt app~y to
~-
so apPlY to service 1IIxi". t!mCOmmission NO1io.. of
' Applio.u;on and Modined ~ No. PAC.E-ill-I7 ""'to is:med OD r 'rrnc. /He '" Cas.
~~. ~
-anuary i 7
002. The deadlL'1e fur iiIL,,-*" ""ritren c."..--~
......
l'cDruarv 8 "00" TI
"'" . "
""""-I.........,
~ , - -.
l1e I.....Oml11.1SSwn Staff was
tb*'" - n1 ... OJ. Y party to fi e COlTlrnents
Renly
comments Were filed by PacifiCorp
on Febnr-'I'I""l1'7 ,n
.. . "~ -
)' -. ~ -U'
, !
Q... Comments can be su""'-...,.;
10I1oW.!i:
.....~...J.2' asStaffCom.rneilts
~ proposed sgr""",,",-, between Pacific"", and No-
WeSt COntains rat.. based opo.
OOS 0' ~emce study
provided hy tho CO"'pany i. e"'!i_non m!h irs filing.
The StUdy
"""""ttod IS basod "" "" I1D.audired 1999 'es, )'Oar ""d incorporates
critical as.ol1II1ptions SUch as
sitUs/system tJ.ann.",. of large 'P.da1 A.,...",on, o"",to"'e",
, Er.""""", of the irrigationintemtp,abiJi!y credi, and allooa,o", used to
..sign rev-e ,eqttir""'en' .,Mng the
OUStomOl"classes.
A ge""",! comparison of contract rates
J'revK,usly approved by tho Co:tnmissiotl for,.,.,,;"" '0 Nu.Wost and . CO1I1parison of COSt ohem.,. stUdi.s "sed 10 gene~ly deveJop bothrate, leads the Staff to conclude th2t the proposed fa"", are re",on.ble.
Staff recoJ!lrizes th2t theproposod rates represent a reasonable 5,5% ;no""". OVor !he previo... rates that ""Pm.! inDecember 2001 and that t.\e rates proposed are
acCeptable to both parties.
Vvllile Staff recommends approval of the
changes proposed, it does not recommendapproval at this rime of the Specific assumptiOIls used by the Company
i. its eo", of serv; e. stUdyfiled in this casso Staff rrmintains th~t cost of
.service issue-oS will be fully addressed in other case&cUITemly pending before: the Co111mis$ion and l1eer::I not be decided in order to approve thepropmJt,:d l'iu-West rates, Should the CormnisSic)'!'!.
. Staff Contends, ultimately establish
cOst ofSe1"\'1te that is diff~rent than that used by the Company to jllStiiY these raLes. the Commissionmay modify Ctmtract rates under itS l:omirmmg ti'tuthoriry. Staff does not oppose a Commissionfinding that a.lloc~ted COstS and revenues subZ/::qu~n(jy e-stablishe:d for 5::ervice 'to Nu-Wes.t bea$sign~d to Idaho for ra.termucing pu:rpclsl'::'.s.
Staff believes that the CClrnr.t1i$sioll retains full jurisdiction ov~r contra~t rates
despite:Agroemont language ill SOctio" 4.
1 to tho OOntrary, Staff rocorn.monds that tho Company h,diree'od 10 oi,hox .Iira"",," tho ."'non CYt ~larify in tho Agt.eme.t ""a~tly wh", is in""'dod hy
I:5R NO. 28984
::;
04/26/02 13: 53 FAX 403 225 Q AGR,um - NAW
-..
+SOi~2ySii6 i~\49 004/005
141012
rB3507:41am Frcm-~ACIFICORPAp r"~~-OZ
Section 4.2 and e.:pJa;" wby it
is not colltra.dietn "'
ry to .1.1.1.& OIn.tznsmon 'Uti di ,
rues as pro;jdod fur in Section 8.3.
-.) .
COOn 0,,"," """tr"C!
.....
....omp2Iiy Reply
. P""iiiCorp replied tho!
Sccnon 8 3 of tit. Sl2b"'ined A C"tnn""-,,on were '0 .find ., h' ,
. ,
nt controls, If
I:ho
w..w! S...ttte
Pa.-ncular rate i~ f ...
' .
Pu. W
.. n... JUS, an reasonable rate to be cbareed
'1 est, t at elernunatlon would
....-
apply !lQt\JrirrIS"~d.ing the rate
calculated under the:: other-
term. of tho Agre.",ent. If however there Were not" ""edfi
. -
./'" c OIntt1isszon eter:rrunat1on of the
rates for Nu-West (fer instance i"' . r a general rate ll1crease W~e spread by stipulation), the
Company COntends that the :tates for Nil=Wesf would b~ ...~..lo.... ...",.~~ 1S e pur;suam to Section 4.COMMISSION FIl'IDINGS
The c"mrnission It,,,, reviewed
alJd considered the fiiings oftecord and oomm""" i"CMe 1-!o. PAC. E.!) 1-17. . The subrnined PaciJiCotpt:N"- West
Agre""""'t Provid", fot ildjo5tn1l'"tof rat.. ""ctor the tariff standard with an affinnative
CoIXImis!riO!1 Order. Tho ColtlpaDY hasSUpported the reasonabloness of the Nu-
West con""", rates with .
coS!-of-serv;oe study th"incorporates critical asstlnJptions and is
based on . non-audited
1999 test year. W. Inake nofindin!:, in !his Order regarding the "o.'-of.servi"" study and related
assumptions. W. find itmare appropriate for these matters to be
considered in other cases currently pending before this
Commission. We note, however. that the presen, AgreemClU, "" djd the prior Nu-Wes' contract,treats Nu- West as an Idaho
sims customer, allocating costs
a!1d f(!!VenUes to the Idaho jurisdiCtionfor rntema.k1J1g PUrposes. To the extem that the submitted Agreement is contiI1gent on our~pprovar of this ratc:rnaking tre=atment, we contirme to fm.d tl;ris txeatnIem acceptable. We find therates sel forth in the Agreement. based on infoI1'nation 'available today. to be fair, just andreasarwble. We ~lso find the remaining c:omr~ct terms, M clarified, to be Ilcceptable.
CONCLUSiONS OF LA \'"
TIle Idaho Public Utilities Commission has jurisdiction over PacifiCorp dba
UtahPower & Light Company, an etlectric 1JliJhy, and the issues presented in Cas~
No. P AC-O 1-pursuarn: to ,he authority
gr-antecl in XdZ'Jho COd~ Title 61 and the Ct:Jmmissi~n 's Rules ofProcedure, mAPA 31.01.0,1.000 er seq.
ORJDi.JE:R
In cDl1siderntion of th!;; foregoing and as more particularly desc:ribed ;and quaIifie:dab0ve, rr IS HEREBY O:RDEJi$D and th~ COmmi!;sion dDes hereby approve th~ Electri~
()P,.DEf'
...
NO. 289&4
13: 54 FAX ~03 2204/26/02
F rom-PAC I FICO'RP! ii, 07:41amApr~"\
Service Ai:ree=m betwe"" PacitiCoJ:p and No.West Indusn;..
, Inc, dated December 200J
for:an effective date of January 1
2002.nus IS A FINAl. ORDER. Auy
POlWn interested in this
Order
""'y
Petition Eor
=.si deratj on 1'vithin twcw:y..on.
(2!) cia ~ of tho son'ice dato of IfUs order with "'g/ITd to "" Y"'atter decided in !his Order. Within sov""
(7) day; ofter an)' per,;on boo potiljoned
:for
=onsideration, any other
pers"n :tn.y cro"'petition for
~d.."'ticm. See Idaho C ade
. 61.
616.
AGRIUM NAW
+~Ol ,203116 1-143 p.DGe/ODS
I4!013
F-a6n
DONE by Orner of th, L:iabo Public Utilities Corwniss;""
at Boise. Idaho !his
~I(r-'-day of March 2002.
~l-\.t~Le- .;.
MARsHA H. SMITH, CO1v!MIS~IONER
ATTEST:
*--
D . qu.JJJ~ap~. Jewell
Coirfmiss:ioTl Secretary
vldlD:?A.CEOI17-:;;w
CW-DER NO. 28984
GIVE
('lED
SLEY LLP
'J Pi'; 4: 15
lAW OFFICES
277 North 6th Street, Suite 200
PO Box 2720, Boise. Idaho 83701
TELEPHONE: [phone]
FACSIMilE: 208 388-1300
WEBSITE: www.givenspursley.com
"GaryG'.Aiie'ii Franklin G. Lee
i L t;C~fst"PhE t;~e;~S?~i i ~Vld R. Lombardi
Micn-a;,1 C. Creamer" ,,~, 1.f:I. 'David Lorello, Jr.Jeffrey A. DeVoe Kevin 1. Maloney
Emily MacMaster Durkee Kimberly D. MaloneyThomas E. Dvorak John M. Marshall
Roy Lewis Eiguren Kenneth R. McClure
Timothy P. Fearnside Kelly Greene McConnellJeffrey C. Fereday Cynthia A. MelilloKarl 1. Klein Christopher H. Meyer
Debora K. Kristensen Kendall L. MillerAnne C. Kunkel L. Edward Miller
Direct Dial: [phone]
Mail: cew(Q),givensDurslev.com
May 1 , 2002
VIA HAND DELIVER Y
Jean Jewell
Idaho Public Utilities Commission
472 W. Washington
O. Box 83720
Boise, ill 83720-0074
Re:Case No.: PAC-02-
Dear Jean:
$/.t
Patrick J. Miller
Judson B. Montgomery
Angela K. Nelson
W. Hugh O'Riordan
Kenneth L. Pursley
Brad V. Sneed
Conley E. Ward
Robert B. White
Raymond D. Givens
James A. McClure
Stephanie C. Westermeier
OF COUNSEL
Exhibit C Was inadvertently omitted from Nu- West's Comments filed yesterday
in the above-entitled case. Please add the attached Exhibit C to Nu- West's filing.
Thank you for your help.
Sin
rrl I, ()J~Conl~ard
CEW /tns
Enclosurecc: Service list w/attachments
S:\MACS\CEW\Nu-West\CoIT\2002-1 Jewell Exhibit C.doc
(!e: ;nr
f)~5~55
II f(
:~;'
/ED
; ,.....-
ELECTRIC SERVICE AGREEMENT
between
ACIFICORP
and
NU-WEST INDUSTRIES, INC.
') "'y; !..
LuLI;,i"l
-. U...T;; i-
, ,
r"~',-jIILII;':'.) VJi ;;i!.):JIJiJ
This ELECTRIC SERVICE AGREEMENT (this "Agreement"), entered into on this 10th
day of December 2001 is by and between PacifiCorp, an Oregon corporation ("PacifiCorp
and Nu- West Industries Inc., a Delaware corporation ("Nu- W est") having a place of business
within the State of Idaho, located at Soda Springs, Idaho within the county of Caribou.
Pacifi Corp and Nu- West are sometimes referred to separately as a "Party" and collectively as
Parties
WHEREAS, PacifiCorp is currently the provider of retail electric energy and power to
Nu- West's phosphate fertilizer production facilities served by Nu- West's El Paso Substation
located at Soda Springs, Idaho, and
WHEREAS, Nu- West desires to purchase all firm power and energy requirements for the
Facilities under this Agreement, and
WHEREAS, PacifiCorp desires to be the exclusive provider of all firm power and energy
to Nu-West's facilities, and
NOW THEREFORE, the parties hereto agree as follows:
SECTION 1: DEFINITIONS
.;.
As used in this Agreement, the following terms shall have the following meanings:
1.1 Adiustment Percentage : Adjustment Percentage ("AP") for following calendar year means
the overall annual percent change in PacifiCorp s Idaho base rates for all non-special
contract classes of customers, as approved by the Commission to be effective for the period
from July 1 st of the previous year to June 30th of the current year, as measured by the
percent change, relative to the previous year, in the PacifiCorp revenue requirement
attributable to such non-special customer classes in Idaho.
1.2 Agreement:This Electric Service Agreement and any renewals thereof.
1.3 Billing Demand: The Demand in kilowatts ("kW") which is used to determine the Demand
(power) charges in accordance with the provisions of this Agreement.
Nu-West EI Paso ESA FINAL doc
FINAL dated 12/07/01 at3:38 PM
Page I of 12 EXHIBIT
D(l-tLJ6J UillITlf'/J
1.4 Billing Period: The period of approximately thirty (30) days intervening between regular
successive meter readings.
1.5 Commission: The Public Utilities Commission of the state of Idaho.
Contract Demand: The specified Demand in kW that Nu- West requires to meet its load
requirements and that PacifiCorp agrees to supply and have available for delivery to Nu-
West, which shall be 20 000 kW unless otherwise agreed in writing in accordance with the
terms ofthis Agreement.
1.7 Demand: The rate in kW at which PacifiCorp delivers electric energy to Nu-West either at
a given instant or averaged over any designated period of time.
1.8 Electric Service Regulations: PacifiCorp s currently effective electric service rules and
regulations, on file with and approved by the Commission, as they may be amended or
- -
superseded ITom time to time with the approval of the Commission.
Facilities:Those operating facilities including the El Paso Substation owned by Nu- West to
which PaciflCorp shall provide electric power and energy pursuant to this Agreement
located at or near Soda Springs, Idaho
10 Firm Power and Energy: Electric power expressed in kW and associated energy expressed
in kWh intended to have assured availability to Nu-West to meet all or any agreed-upon
portion ofNu-West's load requirements.
11 Heavv Load Hours HLH"): Hours of the day from the hour ending 0800 through the hour
ending 2300 each Monday through Friday except Holidays. Light Load Hours ("LLH"
means all other times not included in HLH.
1.12 Holidays:Holidays include only New Year s Day, President's Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. When a holiday
falls on a Saturday or Sunday, the Friday before the holiday (if the holiday falls on a
Saturday) or the Monday following the holiday (if the holiday falls on a Sunday) will be
considered a Holiday and consequently off peak (Light Load Hours).
1.13 Measured Demand: The Demand in kW as shown by or computed ITom the readings of
PacifiCorp s power (Demand) meter representing Nu- West's greatest use during the Billing
Period, adjusted for Power Factor as specified in Section 4.3.
1.14 Point of Delivery: The point of delivery for all Firm Power and Energy delivered to Nu-
West shall be at the existing point of interconnection between PacifiCorp and Nu- West atthe E1 Paso substation.
1.15 Power Factor: The percentage determined by dividing Nu-West's power use in kW (real
Nu-West El Paso ESA FINAL doc
FINAL dated 12/07/01 at 3:38 PM
Page 2 of 12
power) by the kilovolt-ampere power load (apparent power). Nu-West's specific Power
Factor and metering criteria can be obtained from PacifiCorp upon request.
1.16 Prudent Electrical Practices: Prudent Electrical Practices shall mean those practices
methods and equipment, as changed from time to time, that are commonly used in prudent
electrical engineering and operations to operate electric equipment lawfully with safety, and
that are in accordance with the IEEE Standards utilized in the Company s Engineering
Handbook ("Handbook"), the National Electrical Safety Code, the National Electric Code
or any other applicable government code in effect during the term of this Agreement.
17 Termination Date: This Agreement terminates on December 31 , 2004.
SECTION 2: TERM AND TERMINATION
This Agreement shall become effective on January 1 , 2002 ("Effective Date ), subject to
Commission approval, and shall remain in full force through the Termination Date following
PacifiCorp s initial delivery of electric power and energy to Nu-West in accordance with this
Agreement. This ;\greement shall automatically be renewed from year to year for no more than
two (2) annual renewal terms, subject to the same terms and conditions unless either party
submits written termination notice to the other party not less than thirty (30) nor more than sixty
(60) days prior to. expiration of the initial term or any renewal term.
SECTION 3: DELIVERY OF AND CHARGES FOR FIRM POWER AND ENERGY
Scope of Deliveries : PacifiCorp shall deliver such amounts afFirm Power and Energy to
the Point of Delivery as Nu- West requires to meet its load requirements up to, but not in
excess of, Contract Demand, subj ect to the provisions of Section 3.
Request for Additional Contract Demand Upon PacifiCorp s receipt of Nu-West'
written request for power and energy above the Contract Demand, PacifiCorp shall use
commercially reasonable efforts to attempt to supply such additional power under terms
and conditions acceptable to both parties. Within fifteen (15) days of the request
PacifiCorp shall advise Nu- West in writing whether the additional power and energy is or
can be made available and the terms on which it can be made available. IfPacifiCorp and
Nu-West agree that PacifiCorp shall provide Nu-West with Firm Power and Energy in
excess of the Contract Demand commitments, the amount of agreed deliveries shall
become the new Contract Demand amending and superseding the Contract Demand
specified in this Agreement. This new Contract Demand shall be subject to the same
pricing and adjustments as defined in Section 4, unless otherwise agreed upon in writing.
Commencement of Deliveries: PacifiCorp shall make initial deliveries upon the Effective
Date.
Nu-West El Paso ESA FINALdoc
FINAL dated 12/07/01 at 3:38 PM
Page 3 of 12
3.4 Delivery Voltage: PacifiCorp shall deliver Firm Power and Energy at 'the Point of
Delivery in the form of three-phase, alternating current at a nominal frequency of 60
Hertz, and at a nominal voltage of 138 000 volts. For additional information on the
delivery voltage, see the section "Voltage Level and Range" in the PacifiCorp
Engineering Handbook.
Resale of Power.Nu- West shall not resell any electric power and energy delivered under
this Agreement to any other person or entity.
SECTION 4: BILLING, PRICES AND PAYMENT FOR POWER AND ENERGY
Billing: All billing statements for power and energy shall show the amount due for the type
and quantity of power and energy purchased and charged in accordance with this Agreement
and any charges permitted or required under the applicable Electric Service Regulations.
The following charges apply.
MONTHLY CHARGES:
May - October November - April
Customer Charge $ per Month 282.282.
Demand Charge $- per kW-month 11.00
Energy Charge $- per MWh
HLH Monday through Friday 22.18.
HE0800 to HE2300 MPT
LLH All other hours and Holidays 17.17.
Annual Adjustment: The demand and energy charges specified in this Section shall be
uniformly adjusted annually effective January 1 2003 and each January 1 thereafter, as
follows. This shall be the sole and exclusive means of annual adjustment to the unit chargescontained herein:
NC = CYC * (1 + AP)
Where:means new charge or charge after adjustment
CYC means current year charge as defined in Section 4.
A further adjustment shall be made effective each January 1 st using
the above formula but with CYC equal to NC as determined for the
previous year. In the event that this Agreement is renewed beyond
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the Termination Date per Section 2, NC and CYC will be adjusted
each year to reflect the renewal term.
The Customer Charges referred to in Section 4.1 shall remain at the same level throughout
the term of this Agreement and any renewals thereof.
4.3 Power Factor: The charges are based on Nu-West maintaining at all times a Power Factor of
85% lagging, or higher, as determined by measurement. If the average Power Factor for the
Billing Period is found to be less than 85% lagging, the Measured Demand as recorded by
PacifiCorp s meter for that Billing Period will be increased by 74 of 1 % for every 1 % that the
Power Factor is less than 85%.
4.4 Payments : All bills shall be paid by the date specified on the bill, or in the event no date is
specified on the bill, 15 days after receipt of the bill for the month, and late charges shall be
imposed upon any delinquent amounts. Nu- West must pay all payments by EDI or wiren- transfer to an account designated by PacifiCorp. The Nu-West account number must be
included with each wire transfer. In the event that a portion of the bill or adjustment arising
hereunder is pisputed, payment of the portion not in dispute shal~ be made when. due. Nu-
West and PacifiCorp shall seek to make a determination on any disputed amount within
sixty (60) days after issuance of Nu- West's notice of dispute. If it is determined that the
disputed amount is due PacifiCorp, Nu-West shall pay PacifiCorp within 15 days following
the determination, together with interest from the date the bill was originally due at the rate
then specified in the Electric Service Regulations on late payments or, if no rate is specified
the then effective prime rate as established by the Morgan Guaranty Trust Bank of New
York. Initially, the bank account shall be designated as follows:
WIRE TRANSFER PAYMENTSBan1e Bank ONE
ABA Routing #: 071000013
To Credit: PacifiCorp
Account #: 5547458
Deposits:If at any time Nu-West publicly discloses information which PacifiCorp believes
will impact Nu- West's ability to pay its electric service bills, PacifiCorp may request
deposits to the extent permitted under the applicable Electric Service Regulations. Such an
event would be limited to public disclosure of significant financial losses; inability to make
scheduled debt payments; foreclosure of assets, or disclosure that the company is
considering filing for bankruptcy. In the event Nu- West defaults in any of its obligations
under this Agreement or the applicable Electric Service Regulations, PacifiCorp may
exercise any or all of its rights and remedies under this Agreement, the applicable Electric
Service Regulations, and under any applicable laws, rules and regulations.
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SECTION 5: METERING
Metering Equipment:PacifiCorp shall provide, maintain and test meters and metering
equipment required for billing purposes. The parties shall specify the locations for
PacifiCorp s installation of metering equipment in Nu-West's premises, and Nu-West shall
allow PacifiCorp access to such locations without charge during reasonable business hours.
Telecommunications Facilities: Upon PacifiCorp s request . Nu-West shall install a
dedicated telephone line for meter reading purposes without charge to PacifiCorp. Nu- West
shall pay all recurring charges related to line operation.
5.3 Secondary Metering: If the Point of Delivery is on the primary side of Nu-West'
transformers, PacifiCorp may elect to install its meter on the secondary side of the
transformers, whereupon transformer and other losses occurring between the Point of
Delivery and the meter shall be computed and added to the meter readings to determine theh monthly demand and energy consumption.
5.4 Transformer Loss Curves: If Nu- West takes service at primary. voltage and if secondary
metering is used, Nu- West shall, prior to commencement of service, provide PacifiCorp
with transformer loss curves and test data to allowPacifiCorp to calculate transformer
losses for billing purposes.
SECTION 6: OPERATIONAL CONSTRAINTS
1 For details on the operational constraints and power quality, refer to the PacifiCorp
Engineering Handbook, Section - Power Quality. All measurements of currents and voltages
under this Section shall be taken at the Point of Delivery.
Reactive Requirements: Nu- West shall control and limit the flow of reactive power between
PacifiCorp s and Nu-West's system so as to maintain a Power Factor in accordance with the
Section 4.3. PacifiCorp s Billing Demands shall be increased in accordance with Section 4.
for excessive reactive flow.
6.3 Voltage Drops: In order to receive electric service from PacifiCorp, Nu- West shall
continuously comply with PacifiCorp s flicker guidelines and with the operating criteria set
forth in the PacifiCorp Engineering Handbook, Section "Voltage Fluctuation and Flicker . If
operation outside of these limits is desired, Nu- West must contact PacifiCorp for engineering
studies to be done prior to changing operations.
6.4 Harmonic Distortion: Nu- West shall operate the Facilities in such a manner so that the
harmonic distortion and notching falls within PacifiCorp s adopted guidelines and standards
as described in the PacifiCorp Engineering Handbook, Section "Harmonic Distortion
Voltage Balance: Nu- West shall operate the Facilities in such a manner so that the
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PacifiCorp system voltage balance falls within PacifiCorp s adopted guidelines and
standards as described in the PacifiCorp Engineering Handbook in the Power Quality
Section.
Voltage Transients: Nu-West shall operate the Facilities in such a manner so that the
PacifiCorp system does not experience transient magnification issues, such as those outlined
in PacifiCorp s adopted guidelines and standards as described in the PacifiCorp Engineering
Handbook - Power Quality Section.
Remediation:In the event that the Nu- West's operations fall outside of the technical
requirements of this contract, or the requirements set forth in the Electric Service
Regulations, or adversely affects the operations of PacifiCorp s transmission or distribution
system, or other PacifiCorp customers, PacifiCorp shall give Nu-West written notice of the
corrective actions required, and Nu- West shall have the opportunity for a period of fourteen
(14) days to discuss PacifiCorp s requirements. Although PacifiCorp will discuss the
- - corrective action with Nu- West, any final determination of the corrective action required
shall be based on compliance with PacifiCorp s Engineering Handbook, guidelines and
standards. After such fourteen- (14) day period, PacifiCorp sh~ll give Nu- West its final
determination of PacifiCorp s required corrective action. Should Nu-West fail to begin to
take corrective action required by PacifiCorp within thirty (30) days after written notice from
PacifiCorp or fail to pursue completion of such corrective action with diligence, PacifiCorp
may perform such services or supply and install such equipment as it deems necessary to
provide corrective action, whereupon Nu-West shall compensate PacifiCorp for an sums
expended, all materials utilized, and all services contracted or performed, by paying a sum
equal to 110% of all costs, expenses, material, and labor charges incurred by PacifiCorp,
including PacifiCorp s internal material and labor charges and standard overhead costs. Nu-
West shall pay such sums within fifteen (15) days after PacifiCorp has mailed Nu-West an
itemized statement of its charges therefore. If Nu- West desires to operate outside of these
limits, Nu- West shall pay for studies done by PacifiCorp to determine the impact on other
PacifiCorp customers and ifthe proposed operation is acceptable.
Notification. Nu-West shall notify PacifiCorp prior to increasing its consumption of electric
power and energy that will exceed the normal operating limits of the Facilities and Nu- West
shall provide sufficient time for Pacifi Corp to accommodate such loads. Nu- West shall also
notify PacifiCorp prior to any significant change in load characteristics or installation of a
significant number of devices (such as power factor correction capacitors, dynamic brakes
adjustable speed drives, etc.) that could impact the operation of the PacifiCorp system and
the interaction with Nu- West's system. Please refer to the Power Quality Section in the
PacifiCorp Engineering Handbook for additional information and guidelines.
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SECTION 7: INTEGRATION; AMENDMENT
This Agreement contains the entire agreement of the parties with respect to the subj ect
matter, and replaces and supercedes in their entirety all prior agreements between the parties
related to the same subject matter. Except pursuant to Sections 8 and 11 below, this Agreement
may be modified only by a subsequent written amendment or agreement executed by both
parties.
SECTION 8: JURISDICTION OF REGULATORY AUTHORITIES
1 This Agreement is subject to approval of the Commission. In the event the Commission
order approving this Agreement either requires imputation of revenue to PacifiCorp, or
provides for possible future imputation of revenue to PacifiCorp, PacifiCorp may terminate
this Agreement by providing Nu- West notice within 30 days of the entry of the
-- Commission s Order. ill the event the Commission order approving this Agreement does
not provide for the direct assignment of the revenues and costs from this Agreement to the
Idaho jurisdiftion for rate making purposes, PacifiCorp may tef?1inate this Agreement by
providing Nu-West notice within 30 days of the entry of the Commission s Order. In the
event that the Commission Order approving this Agreement contains any condition that is
materially adverse to either party, the party adversely impacted by the condition may
terminate this Agreement by providing the other party notice within 30 days of the entry of
the Commission s Order.
2 The Electric Service Regulations of PacifiCorp, together with all changes and amendments
thereto as approved by the Commission, are incorporated herein and made a part of the
agreement. Once the Commission approves the Agreement, the provisions of the
Agreement shall take precedence over any conflicting provisions ofPacifiCorp s Electrical
Service Regulations.
3 The parties agree that the Commission has the authority to modify the rates for service
under this Agreement under the same standard that applies to tariff customers generally.
Accordingly, surcharges or credits that apply to service to tariff customers generally will
also apply to service under this Agreement.
8.4 In the event that the statutes of the state ofIdaho are amended to provide Nu-West with the
ability to choose an electric supplier other than PacifiCorp, either party may terminate the
Agreement within 90 days of the effective date of the legislation by written notice delivered
to PacifiCorp.
SECTION 9: FORCE MAJEURE
Neither Party shall be subject to any liability or damages for inability to provide or receive
service to the extent that such failure shall be due to causes beyond the control of either
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PacifiCorp or Nu- West, including, but not limited to the following: (a) the operation and effect of
any rules, regulations and orders promulgated by any Commission municipality, or
governmental agency of the United States, or subdivision thereof (so long as the claiming party
has not applied for or assisted in the application for, and has opposed where and to the extent
reasonable, such government action); (b) restraining order, injunction or similar decree of any
court; (c) war; (d) flood; (e) earthquake; (f) act of God; (g) civil disturbance; or (h) strikes or
boycotts. Should any of the foregoing occur, the minimum charges and early termination charges
that would otherwise be applicable under this Agreement shall be waived and Nu- West shall
have no liability for service until Nu- West is able to resume service; provided the party claiming
Force Majeure shall make every reasonable attempt to remedy the cause thereof as diligently and
expeditiously as possible. Time periods for performance obligations of parties herein shall be
extended for the period during which Force Majeure was in effect. In the event that a Force
Majeure event occurs, and Nu-West does not resume service at pre-event levels within six (6)
months of the beginning of the event, the contract will be treated as terminated, pursuant to
Section 2 above.
SECTION 10: ASSIGNMENT
. . .
Neither Company nor Nu- West shall assign this Agreement without the written consent of the
other party hereto, which shall not be unreasonably withheld; provided, Nu- West may assign this
Agreement without such consent to an entity that acquires the majority of the value ofNu- West'
operating facilities, in which event Nu- West as assignor shall guarantee the assignee
performance ofNu-West's obligations under this Agreement and further provided that Company
may assign this Agreement without any such consent to an entity that acquires the majority of the
value of Company s facilities, in which event Company as assignor, shall guarantee the
assignee s performance of Company s obligations. Anyassignee or successor ofNu-West shall
remain subject to such any assignee or successor s qualification as a customer under Company
poliCies and the Electric Service Regulations, and shall be bound by this Agreement, the Electric
Service Regulations, and assume the obligations of Nu- West from the date of assignment. This
Agreement shall inure to the benefit and be binding upon any authorized assignee, its agents and
assigns; provided, that nothing herein shall prevent either party from assigning this Agreement to
its parent corporation or to its survivor in connection with a corporate reorganization so long as
such assignee is solvent and is able to meet its obligations hereunder for the Agreement and the
Electric Service Regulations.
SECTION 11: INFORMATION
11.1 Furnishing Information. Upon PacifiCorp s request, Nu-West shall submit its year-end
financial statements to PacifiCorp, certified to be true and correct and in accordance with
GAAP. Furthermore, Nu-West shall submit additional information as PacifiCorp may
reasonably request from time to time in furtherance of the purposes of this Agreement.
This information will be considered confidential by PacifiCorp.
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11.Accuracy of Information. Nu- West represents that all information it has furnished or will
furnish under this section to PacifiCorp will be accurate and complete in all material
respects. Nu-West also represents that Nu-West has not omitted and will not knowingly
omit any fact in connection with the information to be furnished under this section which
materially and adversely affects the business, operations, property or condition of the
Facilities or the obligations of PacifiCorp under this Agreement. Should PacifiCorp base
its willingness to enter into any portion of this Agreement or any decision with respect to
credit, deposits or any other material matter, on inaccurate information furnished under
this section by Nu- West for any reason, PacifiCorp shall have the right to revoke its
decision with respect to such matter and modify this Agreement and/or its decision to
reflect the determination which PacifiCorp would have applied had PacifiCorp received
accurate information.
SECTION 12: REPRESENTATNES AND NOTICES
For the purposes of this Agi-eement, any notices required to be given hereunder shall be sent
postage prepaid, by registered or certified mail, return receipt requested (or alternately by
facsimile or -any. other method acceptable by both parties) to the. parties at the respective
addresses below and shall be deemed to have been given when received as evidenced by the
appropriate receipt verifying delivery:
Representatives ofNu- West:
Nu- West Industries, Inc.
i 3131 Lake Fraser Drive SE
Calgary, Alberta
T2J 7E8 Canada
Attn: Vice President Supply Management
Fax:[phone]
Representatives ofPacifiCorp:
PacifiCorp
Director, Energy Contracts
825 NE Multnomah Street
Portland, OR 97232
Fax:[phone]
SECTION 13: REMEDIES; WAIVER
Either party may exercise any or all of its rights and remedies under this Agreement, the
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applicable Electric Service Regulations and under any applicable laws, rules and regulations.
PacifiCorp s liability for any action arising out of its activities relating to this Agreement or
PacifiCorp s electric utility service shall be limited to repair or replacement of any non-operating
or defective portion of PacifiCorp s electric utility facilities. Under no circumstances shall
PacifiCorp be liable for any economic losses, costs or damages, including but not limited to
special, indirect, incidental, consequential, punitive, or exemplary damages. No provision of this
Agreement or the Electric Service Regulations shall be deemed to have been waived unless such
waiver is in writing signed by the waiving party. No failure by any party to insist upon the strict
performance of any provision of this Agreement, the Electric Service Regulations or to exercise
any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such
breach of such provision or of any other provision. No waiver of any provision of this
Agreement or the Electric Service Regulations shall be deemed a waiver of any other provIsion
of this Agreement, the Electric Service Regulations or a waiver of such provision with respect to
any subsequent breach, unless expressly provided in writing.
SECTION 14: GOVERNING LAW; JURISDICTION; VENUE
. . .
All provisions of this Agreement and the rights and obligations of the parties hereto shall in all
cases be governed by and construed in accordance with the laws of the State of Idaho applicable
to contracts executed in and to be wholly perfoimed in Idaho by persons domiciled in the State of
Idaho. Each party hereto agrees that any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this Agreement, the
Electric Service Regulations or the transactions contemplated hereby or thereby, may only be
brought before the Commission, the Federal courts located within the State of Idaho, or state
courts of the State of Idaho, and each party hereby consents to the exclusive jurisdiction of such
forums (and of the appellate courts therefrom) in any such suit, action or proceeding.
Furthermore, each party hereto waives, to the extent permitted by law, any objection which it
may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any
such forum or that any such suit, action or proceeding which is brought in any such forum has
been brought in any inconvenient forum. If, for any reason, service of process cannot be found in
the state of Idaho, process in any such suit, action or proceeding may be served on a party
anywhere in the world, whether within or without the jurisdiction of any such forum.
SECTION 15: WAIVER OF JURY TRIAL
EACH PARTY HERETO HEREBY IRREVOCABLY WANES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE ELECTRIC SERVICE REGULATIONS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 16: HEADINGS
The descriptive headings contained in this Agreement are included for reference only and shall
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not affect in any way the meaning or interpretation orthis Agreement.
IN VvTINESS WHEREOF, the parties hereto have caused this Agreement to be executed by
persons duly authorized as or the date first above written.
ACIFICORP
V"'le.By:
Name: \
Title:
By:
Name:
Title:
Address:Address:
Fax:[phone]
Nu-West Industries. Inc.
13131 Lake Fraser Drive SE
Calgary, Alberta
T2J 7E8 Canada
Fax: (40j!) 225-7616
825 I'lli Multnomah Street
Portland, OR 97232
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