ELECTRIC SERVICE AGREEMENT BETWEEN IDAHO POWER COMPANY AND HOKU MATERIALS, INC
BETWEEN
IDAHO
POWER COMPANY
AND
HOKU
MATERIALS, INC
THIS
AGREEMENT FOR ELECTRIC SERVICE is executed on ___9/17/2008_____
by
HOKU MATERIALS, INC, a Delaware Corporation (“Hoku”) and IDAHO POWER COMPANY, an
Idaho Corporation (“Idaho Power”). In consideration of the mutual covenants
hereinafter set forth, the parties hereby agree as follows:
SECTION
1 - SPECIAL CONTRACT
1.1 This
Agreement is a Special Contract as described in Idaho Power’s Schedule
19.
SECTION
2 - DEFINITIONS
When
used in this Agreement:
2.1. “Commission”
shall mean the Idaho Public Utilities Commission or its successor
agency.
2.2. “Construction
Agreement” shall mean that certain Agreement for Construction of Hoku Electric
Substation and Associated Facilities dated as of December 28, 2007, by and
between Hoku and Idaho Power, as such may be amended from time to
time.
2.3. “Contract
Load Factor” shall mean 90 percent for purposes of establishing the energy
blocks for monthly billing.
2.4. “Embedded
Date” shall mean June 1, 2013.
2.5. “Embedded
Rate” shall mean the demand and energy rates detailed in the Company’s
then-effective Schedule 19T.
2.6. “Excess
Demand” shall mean the average kilowatts supplied during the coincident
15-consecutive-minute period of maximum use each day, adjusted for Power Factor,
which exceeds the Total Contract Demand.
2.7. “Excess
Energy” shall mean any kilowatt-hours of energy supplied to the Hoku Facility
during the monthly billing period as measured by the metering equipment located
at the Points of Delivery that exceeds the sum of the First Block Energy and
the
Second Block Energy.
2.8. “First
Block Contract Demand” shall mean the monthly number of kilowatts Idaho Power
has agreed to make available to the Hoku Facility in accordance with the
Scheduled Contract Demand in Section 6.
2.9. “First
Block Energy” shall mean the kilowatt-hours determined by multiplying the First
Block Contract Demand by the number of hours in the billing period multiplied
by
the Contract Load Factor.
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2.10. “Hoku
Facility” shall mean the Hoku Polysilicon Production complex located on One Hoku
Way, Pocatello, Idaho.
2.11. “Interconnection
Facilities” shall mean all facilities which are reasonably required by Prudent
Electrical Practices and the National Electric Safety Code to interconnect
and
deliver electrical power and energy to the Hoku Facility, including, but not
limited to, transmission facilities, substation facilities and metering
equipment.
2.12. “Minimum
Billed Energy” shall mean the number of kilowatt-hours determined by multiplying
50% of the Total Contract Demand for the billing month by the number of hours
in
the billing month at the Contract Load Factor.
2.13. “Points
of Delivery” shall mean the locations specified in paragraph 5.2 where the
electrical facilities owned by Hoku are interconnected to the electrical
facilities owned by Idaho Power and where power and energy are delivered by
Idaho Power for the purpose of providing electrical service for the operations
of the Hoku Facility.
2.14. “Power
Factor” shall mean the percentage obtained by dividing the maximum demand
recorded in kW by the corresponding kilovolt-ampere (kVa) demand established
by
Hoku.
2.15. “Prudent
Electrical Practices” shall mean those practices, methods and equipment that are
commonly and ordinarily used in electrical engineering and utility operation
to
operate electrical equipment and deliver electric power and energy with safety,
dependability, efficiency and economy.
2.16. “Schedule
19” shall mean the Company’s then effective Idaho Retail Tariff Schedule
19T.
2.17. “Schedule
32” shall mean the Hoku tariff schedule of rates and charges or its successor
schedules.
2.18. “Scheduled
Contract Demand” is defined in Section 6.1.1 below.
2.19. “Second
Block Contract Demand” shall mean 25,000 kilowatts.
2.20. “Second
Block Energy” shall mean the total kilowatt-hours supplied to the Hoku Facility
during the monthly billing period as measured by the metering equipment located
at the Points of Delivery less the First Block Energy, but no greater than
25,000 kilowatts multiplied by the number of hours in the billing period
multiplied by the Contract Load Factor.
2.21. “Total
Contract Demand” shall mean the sum of the First Block Contract Demand and the
Second Block Contract Demand as specified in Section 6, and as such may be
modified pursuant to Section 6.2 below.
2.22. “Transformer
Losses” shall mean energy losses resulting when a transformer changes the
voltage level of alternating current electricity. Transformer losses will be
accounted for in the initial metering installation.
SECTION
3 - TERM OF AGREEMENT
3.1 This
Agreement shall become effective as provided in paragraph 15.1 and remain in
effect through the Embedded Date and will be automatically renewed thereafter
until either Hoku or Idaho Power terminates this Agreement as provided in
paragraph 4.1.
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3.2 It
is the
intention of the parties that following the Embedded Date, the parties shall
enter into a new Special Contract whereby Hoku shall pay energy and demand
rates
that are equal to the lesser of the then-applicable Schedule 19 rate or the
average of the contract rates in Idaho Power’s then-effective other “Special
Contracts”. These Special Contract rates will remain in effect on an interim
basis until the next final Commission order in a general rate case proceeding.
3.3 Service
under this Agreement will commence June 1, 2009.
SECTION
4 - TERMINATION
4.1 Notice
of
Termination: After the Embedded Date, either party to this Agreement shall
have
the right to terminate this Agreement by delivering written notice of
termination to the other party. The effective date of termination will be
specified in the termination notice, but such effective date cannot be earlier
than 12 months after the date of the delivery of the notice of termination.
If
both parties give notice of termination, the earliest effective date will
prevail. If the effective date of a termination occurs before the new Special
Contract is effective between the Parties as described in Section 3.1 above,
then the applicable energy and demand rates shall be the Embedded
Rate.
SECTION
5 - SERVICES TO BE PROVIDED
5.1 Supply
Obligation: In accordance with Prudent Electrical Practices and the provisions
of this Agreement, Idaho Power will furnish Hoku’s total requirements for
electric power and energy at the Hoku Facility. Hoku will not resell any portion
of the power and energy furnished under this Agreement.
5.2 Points
of
Delivery: Electric power and energy shall be delivered by Idaho Power at each
point generally described as the load side terminals of the substation
transformer 13.8 kilovolt disconnect switches at the Hoku Facility.
5.3 Adjustment
for Transformer Losses: Metering on the load side of the substation transformers
will be adjusted for Transformer Losses.
5.4 Description
of Electric Service: Idaho Power shall supply three-phase, 60 hz alternating
current at nominal 13,800 volts, with a maximum steady state variation of plus
or minus five percent (5%) under normal system conditions. Consistent with
Prudent Electrical Practices, Idaho Power will operate within the capability
of
its existing system to minimize voltage level fluctuations, the normal frequency
variation to be within plus or minus 0.05 hz on a 60 hz base.
5.5 Available
Capacity: Idaho Power will make power available to Hoku in an amount equal
to
the kilowatts of Total Contract Demand shown in Section 6.1.1.
5.6 Request
for Proposals: During the initial term of the agreement, at Hoku’s request,
Idaho Power will use commercially reasonable efforts to obtain proposals to
supply power to meet Hoku’s summer loads not served by Idaho Power. Idaho Power
will customize such supply request to match Hoku’s requirements. These
additional purchases are subject to Idaho Power’s ability to deliver the power
to Hoku and Hoku’s acceptance of the price and terms of the proposals. Hoku is
responsible for the full costs of these purchases and any associated
transmission and ancillary service expense to transport such purchases to the
Hoku Facility.
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5.7 Release
of First Block Energy: With adequate notice and the written consent of Idaho
Power, Hoku may request a release of all or part of its First Block Energy
purchase commitment in return for credit on its First Block Energy Charge.
The
value of the credit will be determined by mutual agreement and will take into
consideration the timing of the notice and Idaho Power’s ability to manage any
supply commitments made on Hoku’s behalf.
SECTION
6 - CONTRACT DEMAND
6.1 Contract
Demand Provisions prior to the Embedded Date: The following provisions apply
during the period of time from June 1, 2009 to the Embedded Date, while Hoku
is
changing its load at the Hoku Facility.
6.1.1 Scheduled
Contract Demand: Hoku agrees to contract for, and Idaho Power agrees to provide
power made available to the Hoku Facility in the following amounts expressed
in
kilowatts (the “Scheduled Contract Demand”):
|
First
Block
|
Second
Block
|
||
|
Time
|
Contract
|
Contract
|
Total
Contract
|
|
Period
|
Demand
|
Demand
|
Demand
|
|
6/1/2009
- 9/15/2009
|
18,000
|
25,000
|
43,000
|
|
9/16/2009
- 12/31/2009
|
39,000
|
25,000
|
82,000
|
|
1/1/2010
- 6/15/2010
|
57,000
|
25,000
|
82,000
|
|
6/16/2010
- 8/15/2010
|
18,000
|
25,000
|
43,000
|
|
8/16/2010
- 9/15/2010
|
42,000
|
25,000
|
67,000
|
|
9/16/2010
- 12/31/2010
|
57,000
|
25,000
|
82,000
|
|
1/1/2011
- 6/15/2011
|
57,000
|
25,000
|
82,000
|
|
6/16/2011
- 8/15/2011
|
18,000
|
25,000
|
43,000
|
|
8/16/2011
- 9/15/2011
|
42,000
|
25,000
|
67,000
|
|
9/16/2011
- 12/31/2011
|
57,000
|
25,000
|
82,000
|
|
1/1/2012
- 6/15/2012
|
57,000
|
25,000
|
82,000
|
|
6/16/2012
- 8/15/2012
|
57,000
|
25,000
|
82,000
|
|
8/16/2012
- 9/15/2012
|
57,000
|
25,000
|
82,000
|
|
9/16/2012
- 12/31/2012
|
57,000
|
25,000
|
82,000
|
|
1/1/2013
- 5/31/2013
|
57,000
|
25,000
|
82,000
|
Hoku
acknowledges that Idaho Power is in the process of expanding its system capacity
and the Company’s ability to provide the amount of power shown above for the
summer load period from 6/16/2012 to 9/15/2012 is contingent on the timely
completion of major transmission and generation projects. Hoku agrees that
if
there are delays in the completions of these projects, the amount of power
to be
made available to Hoku from 6/16/2012 to 9/15/2012 may be reduced to match
the
summer load in the previous year.
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6.2 Contract
Demand Provisions after Initial Expansion: After the Embedded Date, Hoku has
the
option to increase or decrease its Total Contract Demand level as
follows:
6.2.1 Increases
to Total Contract Demand: Under the terms of this Agreement, Hoku may increase
the Total Contract Demand above 82,000 kilowatts by increasing the First Block
Contract Demand in increments of 1,000 to 10,000 kilowatts per year up to a
Total Contract Demand of 175,000 kilowatts. Hoku will notify Idaho Power in
writing of the additional capacity requirements at least one year in advance.
The new Total Contract Demand will be in effect for a minimum of one year.
Increases to Total Contract Demand are subject to the availability of adequate
capacity in Idaho Power’s facilities to provide the requested
service.
6.2.2 Decreases
to Total Contract Demand: After the Embedded Date, Hoku may decrease the Total
Contract Demand by reducing the First Block Contract Demand in decrements of
1,000 kilowatts. Total Contract Demand may not be decreased below 25,000
kilowatts. Hoku will notify Idaho Power in writing of the decrease in capacity
requirements at least one year in advance. The new Total Contract Demand will
be
in effect for a minimum of one year.
6.3 Excess
Demand: Prior to the Embedded Date, and subject to Section 6.2.1 above, the
availability of power in excess of the Total Contract Demand is not guaranteed,
and if the average kilowatts supplied at the Hoku Facility during the
15-consecutive-minute period of maximum use each day, adjusted for power factor,
exceeds the Total Contract Demand, Idaho Power may curtail service to the Hoku
Facility. Idaho Power reserves the right to install, at any time, at Hoku’s
expense, any device necessary to protect Idaho Power’s system from damage which
may be caused by the taking of Excess Demand. Hoku will be responsible for
any
damages to Idaho Power’s system or damages to third parties resulting from the
taking of Excess Demand. Hoku agrees to use its best reasonable efforts to
monitor its electric loads and to advise Idaho Power as soon as possible of
the
potential for Excess Demand at the Hoku Facility. Excess Demand will be subject
to the Daily Excess Demand Charge and the Monthly Excess Demand Charge specified
in Schedule 32.
6.4 Proration:
▇▇▇▇▇▇▇▇ during months that contain a change in the Scheduled Contract Demand
will be prorated.
SECTION
7 - FACILITIES FOR DELIVERY TO HOKU FACILITY
7.1 Additional
Facilities: The parties acknowledge that they have separately entered into
the
Construction Agreement, pursuant to which Hoku is paying Idaho Power to
construct the Interconnection Facilities necessary to provide the Total Contract
Demand under this Agreement. Idaho Power represents and warrants to Hoku that
none of the charges set forth in Schedule 32 include any cost reimbursement
or
adjustment that is already being paid by Hoku pursuant to the Construction
Agreement, and that such Interconnection Facilities are sufficient to supply
the
Scheduled Contract Demand. To the extent that additional transmission and/or
substation Interconnection Facilities are required to provide additional service
pursuant to Section 6.2.1 above, special arrangements will be made in a separate
Agreement between Hoku and Idaho Power.
5
7.2 Operation
and Maintenance: Idaho Power will operate and maintain Interconnection
Facilities necessary to provide service to the Hoku Facility. Such
Interconnection Facilities include Interconnection Facilities paid for by Hoku,
including those paid for by Hoku pursuant to the Construction Agreement. Idaho
Power shall operate and maintain such Interconnection Facilities in accordance
with Prudent Electrical Practices.
SECTION
8 - CHARGES TO BE PAID BY HOKU TO IDAHO POWER
8.1 Rates
and
Charges: The rates and charges for electrical power, energy and other services
provided by Idaho Power to the Hoku Facility are identified by component in
Schedule 32. The total amount to be paid by Hoku for electric service to the
Hoku Facility will be the sum of the components identified on Schedule
32.
8.2 Power
Factor: When the Hoku Facility’s Power Factor is less than 95 percent during the
15-consecutive-minute period of maximum use for the monthly billing period,
Idaho Power will determine the Total Billing Demand by multiplying the metered
demand in kilowatts by 0.95 and dividing that product by the Power
Factor.
8.3 Billing
and Metering Provisions: Idaho Power will install and maintain suitable metering
equipment for each Point of Delivery so that coincident demand and energy
consumption can be determined for the billing period.
8.4 First
Block Contract Demand Charge: The First Block Contract Demand Charge is fixed
and is not subject to change through the Embedded Date. After the Embedded
Date,
the Contract Demand Charge is subject to change and revision by order of the
Commission. After the Embedded Date, Idaho Power will advocate for Commission
acceptance of the ratemaking treatment for the Special Contract described in
Section 3.2 above.
8.5 First
Block Energy Charge: The First Block Energy Charge and Excess Energy Charge
are
fixed and are not subject to change through the Embedded Date. After the
Embedded Date, the Energy Charge and Excess Energy Charge are subject to change
and revision by order of the Commission. After the Embedded Date, Idaho Power
will advocate for Commission acceptance of the ratemaking treatment for the
Special Contract described in Section 3.2 above.
8.6 Second
Block Charges: The Second Block Contract Demand Charge and the Second Block
Energy Charge will increase or decrease uniformly with any base rate change
authorized by the Commission that is applicable to Idaho Power’s Tariff Schedule
19T through the Embedded Date. After the Embedded Date, the Second Block
Contract Demand Charge and the Second Block Energy Charge are subject to change
and revision by order of the Commission.
8.7 Power
Cost Adjustment: The Power Cost Adjustment (PCA) rate as defined under Idaho
Power’s Tariff Schedule 55 will be applied to the Second Block Energy only. The
PCA rate will not apply to the First Block Energy or to Excess
Energy.
8.8 Conservation
Program Funding Charge: The Conservation Program Funding Charge as specified
in
Idaho Power’s Tariff Schedule 91 for Schedule 19 will be applied to the sum of
the Second Block Charges, Excess Demand Charges, and Excess Energy
Charges.
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8.9 Minimum
Energy Charges: Each month Hoku will be billed for the actual metered
kilowatt-hours of energy, but no less than the Minimum Billed Energy amount
defined in Section 2.12.
SECTION
9 - PAYMENT OF BILLS/SETTLEMENTS
9.1 Billing
Data: Hoku shall pay Idaho Power for all services provided under this Agreement.
Invoices for payment for electric services shall be prepared and submitted
to
Hoku monthly. All invoices or bills shall contain such data as may be reasonably
required to substantiate the billing.
9.2 Payment
Procedure: All bills or accounts for electric service owed by Hoku to Idaho
Power hereunder shall be due and payable within fifteen (15) days following
Hoku’s receipt of a ▇▇▇▇. Payment will be made by electronic transfer of funds.
Idaho Power will provide Hoku with current ABA routing numbers and other
necessary instructions to facilitate the electronic transfer of funds.
SECTION
10 - ACCESS TO PREMISES
10.1 During
the term of this Agreement, and for a reasonable period following termination,
Idaho Power shall have access to the Hoku Facility premises at all times for
the
purposes of reading meters, making installations, repairing and removing
Interconnection Facilities and Idaho Power equipment and for other proper
purposes hereunder.
SECTION
11 - ASSIGNMENT
11.1 This
Agreement shall be binding upon the heirs, legal and personal representatives,
successors and assigns of the parties hereto.
SECTION
12 - LIABILITY
12.1 Each
party agrees to protect, defend, indemnify and hold harmless the other party,
its officers, directors, and employees against and from any and all liability,
suits, loss, damage, claims, actions, costs, and expenses of any nature,
including court costs and attorney’s fees, even if such suits or claims are
completely groundless, as a result of injury to or death of any person or
destruction, loss or damage to property arising in any way in connection with,
or related to, this Agreement, but only to the extent such injury to or death
of
any person or destruction, loss or damage to property is not due to the
negligence or other breach of legal duty of such other party; provided; however,
that each party shall be solely responsible for claims of and payment to its
employees for injuries occurring in connection with their employment or arising
out of any ▇▇▇▇▇▇▇’▇ compensation law.
12.2 Limitation
of Liability: Neither party shall, in any event, be liable to the other for
any
special, incidental, exemplary, punitive or consequential damages such as,
but
not limited to, lost profits, revenue or good will, or interest, whether such
loss is based on contract, warranty, negligence, strict liability or otherwise.
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SECTION
13 -
MODIFICATIONS OF CONTRACT
13.1 This
Agreement may not be modified except by writing, duly signed by both parties
hereto.
SECTION
14 - COMMISSION JURISDICTION
14.1 This
Agreement and the respective rights and obligations of the parties hereunder,
shall be subject to (1) Idaho Power’s General Rules and Regulations as now or
hereafter in effect and on file with the Commission and (2) to the jurisdiction
and regulatory authority of the Commission and the laws of the State of
Idaho.
14.2 The
terms, conditions, and rates set forth in this Agreement and Schedule 32 are
subject to the continuing jurisdiction of the Commission. The rates under this
Agreement are subject to change and revision by order of the Commission upon
a
finding, supported by substantial competent evidence, that such rate change
or
revision is just, fair, reasonable, sufficient, nonpreferential, and
nondiscriminatory. It is the parties’ intention by such provision that the rate
making standards to be used in making any revisions or changes in rates, and
the
judicial review of any revisions or changes in rates, will be the same standards
that are applicable to Idaho intrastate tariff rates.
SECTION
15 - COMMISSION APPROVAL
15.1 This
Agreement shall become effective upon the approval by the Commission of all
terms and provisions hereof without change or condition.
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IDAHO
POWER COMPANY
|
BY
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
|
|
ITS
|
Senior
Vice President, Delivery
|
HOKU
MATERIALS, INC.
|
BY
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
|
ITS
|
CEO
|
9
|
Idaho
Power Company
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I.P.U.C.
▇▇. ▇▇, ▇▇▇▇▇▇ ▇▇. ▇▇▇
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Original
Sheet No. 32-1
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SCHEDULE
32
IDAHO
POWER COMPANY
ELECTRIC
SERVICE RATE
FOR
HOKU MATERIALS, INC.
POCATELLO,
IDAHO
ELECTRIC
SERVICE AGREEMENT DATED SEPTEMBER 17, 2008
APPLICABILITY
This
schedule is applicable to service to Hoku Materials, Inc. (Hoku) served by
Idaho
Power Company under the terms of an Electric Service Agreement (ESA) dated
September 17, 2008.
MONTHLY
CHARGE
The
Monthly Charge is the sum of the following charges and may also include charges
as wet for the in Schedule 55 (Power Cost Adjustment), Schedule 91 (energy
efficiency Rider), and Schedule 95 (Adjustment for Municipal Franchise
Fees).
FIRST
BLOCK MONTHLY CHARGES
First
Block Contract Demand Charge
$2.35
per
kW times the First Block Contract Demand
First
Block Energy Charge
6.166¢
per kWh times the First Block Energy (subject to the Minimum Billed Energy
amount specified in the ESA)
SECOND
BLOCK MONTHLY CHARGES
Second
Block Contract Demand Charge
$3.77
per
kW times the Second Block Contract Demand
Second
Block Energy Charge
2.3769¢
per kWh times the Second Block Energy (subject to Minimum Billed Energy amount
specified in the ESA)
EXCESS
DEMAND CHARGES
Daily
Excess Demand Charge
$0.50
per
each kW of Excess Demand per day
Monthly
Excess Demand Charge
$5.00
per
kW for the highest Excess Demand recorded during the billing period
EXCESS
ENERGY CHARGE
7.708¢
per kWh of Excess Energy
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IDAHO
|
Issued
by IDAHO POWER COMPANY
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Issued
Per IPUC Order No. 30035
|
▇▇▇▇
▇. ▇▇▇▇, Vice President, Regulatory Affairs
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Effective
- June 1, 2008
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▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇
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