HomeMy WebLinkAbout2011-050 Agrmt - BPA REP 11PB-12322
Contract No. IlPB-12322
REP SETTLEMENT AGREEMENT
Table of Contents
Section
I.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
, Page
Effective Date; Binding Rights and Initial Obligations ................................. 2
Definitions......................................................................................... 4
Establishment ofREP Settlement Benefits ................................................. 11
Interim Agreement True-Up Payment Amounts ............'~............................. 17
Environmental Attribntes .................................................. ........ ............ 18
Allocation to IOUs ofREP Settlement Benefits........................................... 19
Waivers and Satisfaction of Obligations and Claims .................................... 24
Legislation............................. .................... ........ ................................ 27
Dispute Resolution.................................................................. ............. 27
Parties' Actions with Respect to Litigation; Court
Determination of Unenforceability of Settlement. ........................................ 33
No Admission, Precedential or Evidentiary Effect;
Reservation of Rights ........................................................................... 35
Representations............... ........ ............................ .... ............................ 35
Miscellaneous..................................................................................... 35
Parties' Rights and Obligations Related to Qualifying Conditions. .................. 38
Signatures.............................. ............................................... ............. 42
Exhibits and Attachments
Exhibit A -
Exhibit B -
Form ofREP Settlement Implementation Agreement
PF -02 Customer Percentages and Customer-Specific PF -02
Refunds
Renewable Energy Certificates and Carbon Attributes to IOUs
lUustrative Table for Section 6
Arbitration Procedures
Not Used
Not Used
Template Replacement Form of Exhibit H to COU Parties'
CHWM Contracts
Exhibit C -
Exhibit D -
Exhibit E -
Exhibit F -
Exhibit G -
Exhibit H -
RECITALS
A. BP A, entities in the IOU Group and entities in the COU Group are parties or intervenors
to Idaho Public Utilities Commission, et al. v. Bonneville Power Administration (Docket Nos. 08-74927, 08-
74928,08-74929,08-74932,08-74933,08-74942, 08-74957 (Consolidated) USCA-Ninth Circuit) and
to The Association of Public Agency Customers, et al. v. Bonneville Power Administration (Docket Nos. 08-
74725,08-74811,08-74900,08-75008,08-75091, 08-75098, 08-75099, 08-75112, 08-75113, 08-75130,
08-75132, 08-75133, 08-75161, 08-75165 (Consolidated) USCA-Ninth Circuit) (collectively, the
"Current Litigation").
B. BP A, entities in the IOU Group and entities in the COU Group are also parties or
intervenors to Avista Corporation, et al. v. Bonneville Power Administration (Docket Nos. 09-73160, 09-
73201,09-73225,09-73228,09-73230,09-73247, 09-73249, 09-73251, 09-73252, 09-73254, 09-73264,
09-73269, 09-73271, 09-73274, 09-73281 (Consolidated) USCA-Ninth Circuit) and to Portland
General Electric Company, et al. v. United States Department of Energy, et al. (Docket Nos. 09-73288, 09-
73289, 09-73317, 09-73322, 09-73326 (Consolidated) USCA-Ninth Circuit) (collectively, together
with any challenges in the U.S. Court of Appeals for the Ninth Circuit to BPA's WP-IO rates, the
"Related Litigation").
C. The Parties desire to resolve certain disputes underiying the Current Litigation and
Related Litigation and to settle matters relating to the payment of benefits and the recovery of costs
ofIOU participation in the Residential Exchange Program for the Settlement Period.
SETTLEMENT AGREEMENT
This REP Settlement Agreement ("Settlement Agreement"), dated as of _,
2011 is entered into by and among the Bonneville Power Administration and the undersigned
investor-owned utilities, state public utility commissions, Citizens' Utility Board of Oregon,
consumer-owned utilities, consumer-owned utility associations, and other BP A power customers.
I. EFFECTIVE DATE: BINDING RIGHTS AND INITIAL OBLIGATIONS
1.1 Effective Date and Tenn. This Settlement Agreement will take effect as to all
Parties onthe Effective Date in accordance with section 1.4.1, and will take effect with respect to the
Initial Obligations applicable to all Parties other than BP A in accordance with section 1.2. This
Settlement Agreement will expire upon the expiration of Fiscal Year 2028.
1.2 Parties' Reuresentations and Warranties Related to Si....ine: Settlement
Ae:reement: Conditions Precedent to Initial Oblie:ations.
1.2.1 Reuresentation and Warranties Related to Si....ine: Settlement Ae:reement.
By signing this Settlement Agreement, each Party represents and warrants, with respect to itself
only, to each other Party that as of the date of such signing the execution, delivery, and performance
of this Settlement Agreement (i) are within its powers, (ii) have been duly authorized by all
necessary action on its behalf, and all other necessary consents or approvals (including any necessary
regulatory consents or approvals) have been obtained and are in full force and effect, and (iii) do not
violate any of the terms and conditions of any applicable law or materially violate any contracts to
which it is a party.
1.2.2 Conditions Precedent to Initial ObliRations. The Initial Obligations of the
Parties other than BP A will take effect when the following conditions precedent have been satisfied:
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(i) on or before April 15, 2011, (a) COUs, having in the aggregate, Transition High
WaterMarks (as defined in the TRM) equal to or greater than 91 percent of the
total Transition High Water Marks of all COUs, have signed and delivered to
BP A this Settlement Agreement, (b) the Public Power Council and Northwest
Requirements Utilities have signed and delivered to BP A this Settlement
Agreement, (c) Pacific Northwest Generating Cooperative has signed and
delivered to BPA this Settlement Agreement, and (d) each entity of the IOU
Group has signed and delivered to BP A this Settlement Agreement; and
(ii) on or before April 25, 2011, BPA has delivered a written notice to each Party,
certifying that item (i) above is satisfied.
If such conditions precedent have not been satisfied on or before the dates specified therefor, then all
provisions of this Settlement Agreement and any REP Settlement Implementation Agreement will
be void ab initio.
1.3 Initial ObliRations. Each Party (othcr than BPA) will, commencing if and at such
time as the 'conditions precedent set forth in section 1.2 above are satisfied, perform the following
obligations (the "Initial Obligations"):
(i) support, in BP A proceedings to evaluate whether the Administrator should
execute this Settlement Agreement, a BP A decision that this Settlement
Agreement should be so executed;
(ii) seek, in cooperation with the other Parties, a stay or other procedural order that
preserves all claims and defenses in the Litigation, as described in section 10.1;
and
(iii) support, in BP A proceedings to adopt applicable power rates for the initial Rate
Period, BP A's use of this Settlement Agreement to develop such rates.
Any Party may cite any other Party's execution of this Settlement Agreement, at any time after such
other Party's execution and delivery to BP A of this Settlement Agreement and the conditions
precedent in section 1.2 have been satisfied, as evidencing such other Party's support for this
Settlement Agreement.
1.4 Execution bv Administrator: REF Settlement Implementation Aueement.
1.4.] Effective Date for All Provisions Other Than Initial Oblieations.
Provided the conditions precedent in section 1.2 have been satisfied and subject to sections 1.4.3 and
3.7, all provisions of this Settlement Agreement (other than section 1.3) will become effective as to
all Parties as of the date on which the Administrator executes this Settlement Agreement (the
"Effective Date").
] .4.2 Other Settlement Documents. Contemporaneously with the Administrator's
execution of this Settlement Agreement, BP A and each IOU will enter into a REP Settlement
Implementation Agreement in the form attached as Exhibit A to this Settlement Agreement. The
purpose of each such REP Settlement Implementation Agreement is to implement certain provisions
of this Settlement Agreement, including how IOU-Specific REP Settlement Benefit Amounts are
distributed to each Participating IOU. Each such REP Settlement Implementation Agreement is
and must at all times remain consistent with this Settlement Agreement.
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] .4.3 Failure of Administrator to Execote Settlement Aneement. If the
Administrator has not executed this Settlement Agreement on or before August I, 2011, then all
provisions of this Settlement Agreement and any REP Settlement Implementation Agreement will
be void ab initio.
2. DEFINITIONS
Capitalized terms used in this Settlement Agreement will have the meanings set forth below
or in the provisions in which they are used, or, if not defined in this Settlement Agreement, as set
forth in the WP-07S ROD. Such definitions are equally applicable to both the singular and plural
forms of any such terms.
"Act" means the Pacific Northwest Electric Power Planning and Conservation Act, 16
U.S.c. ~ 839 et seg.
"Adjusted Average PF Rate" has the meaning given such term in section 14.l(i).
"Affected PF Customer" has the meaning given such term in section 14.I(ii).
"Administrator" means the administrator ofBPA.
"Applicable Rates" means (i) any Tier I PF Rates, (ii) any IP Rate and any other rate at
which BPA sells power to a. DSI, (iii) any NR Rate, and (iv) any other rate established by BPA for
the sale or exchange of power which BP A determines, for a given Rate Period, should be part of the
Pro Rata Load Share as set forth in section 3.3.4. Applicable Rates will not include any Reference
Rate.
"Arbitrator" has the meaning given such term in section 3 of Exhibit E to this Settlement
Agreement.
"Average System Cost" or "ASC" means, for purposes of this Settlement Agreement with
respect to any IOU for any Rate Period, the ASC determined for such IOU for such Rate Period in
accordance with BPA's Average System Cost Methodology as then in effect, and giving effect to the
waivers set forth in section 6.4.
"Base Rate" means (expressed as dollars per megawatt hour), for a Rate Period, the sum of
the following:
(i) the quotient of (a) the forecasted total revenue requirement allocated for such Rate
Period (without regard to results of the rate test under section 7(b)(2) of the Act or
allocation of any surcharges under section 7(b)(3) of the Act) for the rates applicable
to the forecasted loads enumerated in section 7(b)( I) of the Act, divided by (b) the
total of such forecasted loads, all as will be determined in the Rate Proceeding for
such Rate Period;
and
(ii) the rates for such Rate Period applicable for wheeling power from BP A to the
exchanging utility, as determined in the applicable BPA proceeding to set
transmission rates;
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provided, that if, for any Rate Period, BP A adjusts the COU Parties' PF Rates applicable for
such Rate Period through an adjustment clause (for example, a Cost Recovery Adjustment
Clause) that is triggered and effective as of the first day of the Rate Period and that is
applicable to and adjusts such rates for the entire term of the Rate Period, the forecasted
total revenue requirement used in determining the Base Rate for such Rate Period will, for purposes
of determining the Base Rate, be adjusted by a percentage equal to the percentage change in such
COU Parties' PF Rates for the Rate Period caused by such triggering of such adjustment clause.
"BP-12 Proceeding" means the administrative proceeding initiated by, the Federal
Register Notice issued on November 18, 2010 (75 Fed. Reg. 70744) and conducted by BPA
under BPA Docket No. BP-12.
"BP A" means the Bonneville Power Administration.
"BPA Binding Arbitration Policy" means BPA's policy entitled BPA's Guidance on the Use 0/
Binding Arbitration/or BPA Contracts, or its successor.
"CHWM Contract" has the meaning given such term in the TRM.
"Consumer-Owned Utility" or "COU" means each PF Customer that IS not a federal
agency .
"COU Group" means all COU Parties, together with the Public Power Council and
Northwest Requirements Utilities.
"COU Party" means a Party that is a COU. Except where the context requires otherwise,
when used in the plural, the term "COU Parties" means all Parties that are COUs.
"COU Parties' Allocated Share" has the meaning given such term in section 3.3.5.
"COU Parties' Refund Share" has the meaning given such term in section 3.3.5.
"COU Parties' PF Rate" means any BP A wholesale power rate for service to COUs'
"general requirements" (as defined in section 7(b)(4) of the Act), insofar as such rate is applicable to
COU Parties for any Rate Period.
"COU REP Benefits" means the costs BP A incurs to provide benefits to COUs pursuant to
section 5(c) of the Act, or the costs of settling BPA's obligations to provide such benefits.
"Current Litigation" has the meaning given such term in the recitals preceding this
Settlement Agreement.
"Deemer Amount" means any amount of money purported or alleged to be owed by an IOU
under the terms of the 1981 RPSA (including all amendments, suspensions, modifications,
terminations, novations and restatements of liability, thereof) between BPA and an IOU, which was
to be subsequently offset against and thereby would diminish future REP benefits that would
otherwise have been payable by BP A to that IOU pursuant to an existing or future RPSA. Deemer
Amount includes all amounts of interest and penalties added to the original amount.
"Direct Service Industrial Customer" or "DSI" has the meaning specified in'section 3(8) of
the Act.
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"Dispute Notice" has the meaning given such term in section 9.2.2.
"Effective Date" has the meaning given such term in section 1.4.1.
"Federal Agency" means a federal agency that, at any time, purchases electric power from
BP A pursuant tD section 5(b )(3) of the Act.
"Fiscal Year" means each 12-month period, October I through September 30, during the
Payment Period.
"Initial Obligations" has the meaning given such term in section 1.3.
"Initial IOU Adjustment Amount" has the meaning given such term in section 6.2.3(i).
"Interim Agreement True-Up Payment Amounts" has the meaning given such term In
sectiDn 4.
"Investor-Owned Utility" or "IOU" means any of Avista CorporatiDn ("Avista"), Idaho
PDwer Company ("ldahD PDwer"), PacifiCorp, Portland General Electric Company ("Portland
General"), Puget Sound Energy, Inc. ("PSE"), and NorthWestern Energy. Exccpt where the
context requires otherwise, when used in the plural, the term "IOUs" means all Parties that are
10Us.
"IOU Adjustment Amount Balance" has the meaning given such term in section 6.2.3(ii).
"IOU Group" means the 10Us, the Public Utility CommissiDn of Oregon, the Washington
Utilities and Transportation Commission, the Idaho Public Utilities Commission, and the Citizens'
Utility Board of Oregon.
"IOU-Specific REP Settlement Benefit Amount" has the meaning given such term in
section 6.1.1. The sum of the IOU-Specific REP Settlement Benefit Amounts for all Participating
10Us for each Fiscal Year will equal the REP Settlement Benefits fDr such Fiscal Year.
"IOU-Specific Unconstrained Amount" has the meaning given such term in sectiDn 6.1.1.
"IP Rate" means any rate established pursuant to section 7(c) of the Act.
"Litigation" means the Current Litigation and Related Litigation, collectively.
"Load Reduction Agreements" mean
(i)
Amendment No. I to Contract No. 01PB-12229, dated May 23, 2001, between
PacifiCorp and BPA, and the Financial Settlement Agreement, dated July I, 2001,
Contract No. 0IPB-10854, between PacifiCorp and BPA (tDgether with Firm Power
Block Power Sales Agreement, Contract No. 01PB-12230, between PacifiCorp and
BP A; Agreement Regarding CDnditional Deferral of ReductiDn Df Risk
DiscDunt AmDunt, Contract No. 02PB-11157, between PacifiCorp and BPA;
Agreement Regarding Fiscal Year 2003 Deferral Amount, Contract ND. 03PB-
11262, between PacifiCDrp and BPA; and Agreement Regarding Payment Df
Residential Exchange Program Settlement Benefits During Fiscal Years 2007
ThrDugh 2011, Contract No. 04PB-11468, between BPA and PacifiCorp); and
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(ii) Amended Settlement Agreement, Contract No. 0IPB-1088S, between PSE and BPA
(together with Firm Power Block Power Sales Agreement, Contract No. OIPB-
10886, between PSE and BP A; Agreement Regarding Conditional Deferral of
Reduction of Risk Discount.Amount, Contract No. 02PB-1l156, between BPA
and PSE; Agreement Regarding Fiscal Year 2003 Deferral Amount, Contract
No. 03PB-1l251, between BPA and PSE; and Agreement Regarding Payment
of Residential Exchange Program Settlement Benefits During Fiscal Years
2007 Through 2011, Contract No. 04PB-1l467, between BPA and PSE);
and any and all amendments, supplements, and modifications thereof.
"Lookback Claims" means any amount purported or alleged to be
(i) wrongly charged to any BP A customers by BP A in its wholesale power rates as a
result of amounts that BPA paid or value transferred to an IOU pursuant to any 2000
and 2001 REP Settlement Agreements or any Load Reduction Agreements or
(ii) wrongly paid or transferred by BPA as a result of any 2000 and 2001 REP Settlement
Agreements or any Load Rcduction Agreements;
including any interest or pen,lIties added to the original amounts so paid or transferred.
"Material Cost Change" has the meaning given such term in section 14. I (iv).
"Maximum IOU Annual Adjustment.Amount," for any IOU other than Idaho Power, has
. the meaning given such term in section 6.2.3(iii).
"Maximum IOU Annual Adjustment Amount," for Idaho Power, has the meaning given
such term in section 6.2.3(iv).
"Non-Settling COU" means any COU that is not a Party.
"Non-Settling Entity" means any person or entity that is not a Party (including a Non-
Settling COU).
"Notice Recipient" has the meaning given such term in section 9.2.2.
"NR Rate" means any rate established pursuant to section 7(f) of the Act and determined by
BP A to be an NR rate.
"Participant" has the meaning given such term in section 9.2.4.
"Participating IOU" means: for any Fiscal Year, any IOU that has an IOU-Specific
Unconstrained Amount for such Fiscal Year that is greater than zero, as determined pursuant to
section 6.1.1, and that has commenced and has not suspended its REP Settlement Implementation
Agreement (and has not suspended sections 5 and 6 thereof) for such Fiscal Year.
"Party" means (i) any entity that signs this Settlement Agreement and delivers it to BP A on
or before April 15, 2011, and (ii) BPA as of the Effective Date.
"Payment Period" means the period beginning on October I, 2011, and continuing through
September 30, 2028.
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"Payment Period Rates" means BPA's wholesale power rates applicable to Parties for any
Rate Period or partial Rate Period wholly within the Payment Period.
. "PF Customer" means any entity eligible to purchase power from BP A at wholesale power
rates applicable to "general requirements," as that term is defined in section 7(b)(4) of the Act.
"Priority Firm Rates" has the meaning given such term in section 14.1 (iii).
"Pro Rata Load Share" has the meaning given such term in section 3.3.4.
"Qualifying Condition" has the meaning given such term in section 14.I(v).
"Rate Period" means the period of time, in the Payment Period, during which a specific set
of rates established by BP A is intended to remain in effect.
"Rate Proceeding" means a proceeding conducted by BP A under section 7(i) of the Act to
establish rates for the sale of power.
"Reference Rate" means, for any Fiscal Year, the Base Rate for such Fiscal Year as
determined in the Rate Proceeding for such Rate Period, except as otherwise provided in
section 6.1.2.
"Refund Amounts" means the amounts set forth in the table in section 3.2, which are stated
in nominal dollars. .
"Related Litigation" has the meanmg given such term m the recitals preceding this
Settlement Agreement.
"REP Benefit Costs" means the costs that, absent this Settlement Agreement, would be or
would have been recoverable in BPA's wholesale power rates due to BPA's participation in purchase
and exchange sales with the IODs pursuant to section 5(c) of the Act for the Settlement Period.
"REP Benefit Payments" means the amounts that, absent this Settlement Agreement, would
be or would have been paid or conveyed in aggregate to the IODs for the Payment Period or the
Settlement Period (as applicable) as the result of the purchase and exchange sale transactions
provided for in section S(c) of the Act, as such amounts may be limited by sections 7(b)(2) and
7(b)(3) of the Act. .
"REP Recovery Amounts" has the meaning given such term in section 3.3.
"REP-12 Proceeding" means the administrative proceeding initiated by the Federal
Register Notice issued on December 16, 2010 (75 Fed. Reg. 78694) and conducted by BPA
under BPA Docket No. REP-12.
"2000 and 2001 REP Settlement Agreements" mean
(i)
Settlement Agreement, Contract No.00PB-12IS7, between Avista and BPA
(together with Firm Power Block Power Sales Agreement, Contract No. OOPB-
12163, between A vista and BP A, and Agreement Regarding Fiscal Year 2003
Deferral Amount, Contract No. 03PB-Il265, between Avista and BPA);
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(ii) Settlement Agreement, Contract No. 00PB-12160, between NorthWestern Energy
and BPA (together with Firm Power Block Power Sales Agreement, Contract No.
00PB-12165, between NorthWestern Energy and BPA, and Agreement Regarding
Fiscal Year 2003 Deferral Amount, Contract No. 03PB-11269, between
NorthWestern Energy and BPA);
(iii) Settlement Agreement, Contract No. 00PB-12161, between Portland General and
BPA (together with Firm Power Block Power Salcs Agreement, Contract No. OOPB-
12167, between Portland General and BPA, Agreement Regarding Fiscal Year
2003 Deferral Amount, Contract No. 03PB-11267, between Portland General
and BPA); .
(iv) Settlement Agreement, Contract No. 0IPB-12229, between PacifiCorp and BPA
(together with Firm Power Block Power Sales Agreement, Contract No. OOPB-
] 2230, between PacifiCorp and BP A; Agreement Regarding Conditional
Deferral of Reduction of Risk Discount Amount, Contract No. 02PB-] 1157,
between PacifiCorp and BP A; Agreement Regarding Fiscal Year 2003
Deferral Amount, Contract No.03PB-11262, between PacifiCorp and BPA;
and Agreement Regarding Payment of Residential Exchange Program
Settlement Benefits During Fiscal Years 2007 Through 201], Contract
No. 04PB-11468, between BPA and PacifiCorp);
(v) Settlement Agreement, Contract No. 00PB-12162, between PSE and BPA (together
with Firm Power Block Power Sales Agreement, Contract No. 00PB-12168, between
PSE and BPA);
(vi) Settlement Agreement, Contract No. 00PB-12158, between Idaho Power and BPA
(together with Firm Power Block Power Salcs Agreement, Contract No. OOPB-
. 12164, between Idaho Power and BPA, and Agreement Regarding Fiscal Year 2003
Deferral Amount, Contract No. 03PB-] 1268, between Idaho Power and BPA); and
(vii) Amended Settlement Agreement, Contract No. 0]PB-10885, between PSE and BPA
(together with Firm Power Block Power Sales Agreement, Contract No. 0] PB-
10886, between PSE and BP A; Agreement Regarding Conditional Deferral of
Reduction of Risk Discount Amount, Contract No. 02PB-] 1156, between BPA
and PSE; Agreement Regarding Fiscal Year 2003 Deferral Amount, Contract
No. 03PB-1125], between BPA and PSE; and Agreement Regarding Payment
of Residential Exchange Program Settlement Benefits During Fiscal Years
2007 Through 2011, Contract No. 04PB-11467, between BPA and PSE);
and any and all amendments, supplements, and modifications thereof.
"REP Settlement Benefits" means, for each Fiscal Year, the amount payable in aggregate to
Participating IOUs for such Fiscal Year, as such amount is determined pursuant to section 3.
"REP Settlement Implementation Agreement" means each agreement to be entered into
pursuant to section 1.4.2 (as such agreement may from time to time be amended, consistent with this
Settlement Agreement).
"REPSurcharge" has the meaning given such term in section 3.3.1.
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"REP Surcharge Amount" has the meaning given such term in section 3.3.2.
"Requirement Change" has the meaning given such term in section 14.I(vi).
"Residential Exchange Program" or "REP" means the Residential Exchange Program
established by section 5(c) of the Act.
"Residential Load" means, with respect to any IOU for any month of a Rate Period, an
amount equal to the average of such IOU's "Qualifying Residential and Small Farm Load" (as that
term is defined in the REP Settlement Implementation Agreements) for
(i) the same month in the "Base Period" (as that term IS defined in BPA's ASC
Methodology) applicable to such Rate Period, and
(ii) the same month in the 12 months following such Base Period.
"Residential Purchase and Sale Agreement" or "RPSA" means a residential purchase
and sale agreement between an IOU and BPA pursuant to the REP. Any REP Settlement
Implementation Agreement is specifically excluded from the term "Residential Purchase
and Side Agreement" or "RPSA" for purposes of this Settlement Agreement.
"Scheduled Amounts" means the amounts set forth in the table in section 3.1, which are
stated in nominal dollars.
"Settlement Agreement" means ihis documen't, including its exhibits.
"Settlemcnt Period" means the period from October 1,2001 through September 30,2028.
"Surcharged Rates" means (i) any IP Rate and any other rate at which BPA sells power to a
DSI, (ii) any NR Rate, and (iii) any other rate established by BP A for the sale of power to which
BP A determines, for a given Rate Period, the REP Surcharge should apply. Surcharged Rates will
not include any COU Parties' PF Rates or the Reference Rate.
"Tier I Cost Allocator" or "TOCA" has the meaning given such,term in the TRM.
"Tier I PF Rate" means any Tier I Rate (as defined in the TRM) for "general requirements"
(as defined in section 7(b)(4) of the Act).
"Tier 2 PF Rate" means any Tier 2 Rate (as defined in the TRM) for "general requirements"
(as defined in section 7(b)(4) of the Act).
"Tiered Rate Methodology" or "TRM" means the Tiered Rate Methodology as adopted by
BPA in the September 2009 Tiered Rate Methodology Supplemental Rate Proceeding (TRM-12S-A-
03), as it may be subsequently modified according to its terms.
"Total Settlement Benefits" means (i) REP Settlement Benefits to be paid by BP A to any
IOU, (ii) Tier I RECs and Carbon Credits (or the value thereof) to be conveyed by BPA to any IOU,
(iii) Interim Agreement True-Up Payment Amounts to be paid by BPA to any IOU pursuant to
section 4, (iv) any waivers pursuant to this Settlement Agreement of claims against any IOU, and (v)
any and all other payments, benefits, and value to be provided or conveyed to any IOU, all of the
foregoing pursuant to this Settlement Agreement.
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"WP-07S ROD" means the "2007 Supplemental Wholesale Power Rate Case:
Administrator's Final Record of Decision" issued on September 22,2008.
"WP-IO ROD" means the "2010 Wholesale Power Rate. Adjustment Proceeding:
Administrator's Final Record of Decision" issued on July 2],2009.
3. ESTABLISHMENT OF REP SETTLEMENT BENEFITS
3.1 Schedule ofREP Settlement Benefits and Auulicabilitv of Ratesettinl! Provisions.
3.1.1 Schedule of REP Settlement Benefit Payments to laDs. BPA will pay in
total, as REP Settlement Benefits to the laDs for each Fiscal Year, the Scheduled Amounts set forth
in Table 3.1, except as otherwise provided in section 3.6, in which case BPA will instead pay to the
IOUs, as REP Settlement Benefits, the amounts determined pursuant to section 3.6. The amounts
set forth in Table 3. r are not subject to direct or indirect adjustment, whether for inflation, interest,
or otherwise, but the Parties recognize BPA may, in establishing rates consistent with this Settlement
Agreement, round its rates such that the Scheduled Amounts paid to the IOUs differ from the
Scheduled Amounts set forth in Table 3.1 below by no more than one thousand dollars ($1,000) for
any Fiscal Year.
Table 3.1
Scheduled Amounts
Fiscal Year , (in millions)
2012 $182.1 -
2013 $182.1
2014 $]97.5
2015 $197.5
2016 $214.1
2017 $214.1
2018 $232.2
2019 $232.2
2020 $245.2
2021 $245.2
2022 $259.0
2023 $259.0
2024 $273.6
2025 $273.6
2026 $286.1
2027 $286.1
2028 $286.1
3.1.2 BPA Ratesettinl! Oblil!ations. For each Fiscal Year, BPA will develop rates
and refund amounts, in the Rate Proceeding for the applicable Rate Period, such that (i) the COU
Parties' PF Rates and refund amounts will be consistent with sections 3.2 through 3.5, and (ii) rates
and refund amounts applicable to Non-Settling Entities will be consistent with BP A's determination
as described in section 3.7(iii). BPA may not recover costs of Scheduled Amounts or Refund
Amounts from COU Parties in any manner other than through Applicable Rates or
Surcharged Rates.
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3.2 Refund Amounts. The amounts set forth in Table 3.2 (the "Refund Amounts") will
be included in the amounts to be recovered through BP A rates for the Payment Period as provided
in section 3.3 and will be refunded to PF Customers as provided in section 3.4. The amounts set
forth in Table 3.2 are not subject to direct or indirect adjustment, whether for inflation, interest, or
otherwise.
Table 3.2
Refund Amounts
Fiscal Year Refund Amounts
2012 $76,537,617
2013 $76,537,617
2014 $76,537,617
2015 $76,537,617
2016 $76,537,617
2017 $76,537,617
2018 $76,537,617
2019 $76,537,617
2020 $0
2021 $0
2022 $0
2023 $0
2024 $0
2025 $0
2026 $0
2027 $0
2028 $0
3.3 Inclusion in Rates of REP Recoverv Amounts. BP A will establish rates for each
Rate Period such that the sum of (i) the Scheduled Amounts plus (ii) the Refund Amounts (such
sum, the "REP Recovery Amounts") are recovered from the Applicable Rates as described in this
section 3.3.
3.3.1 Initial Allocation of REP Recoverv Amounts by REP Snrcharl!e. Before
determining the portion of the REP Recovery Amounts to be recovered from any rates other than
the Surcharged Rates, BP A will first calculate a portion of the costs of the REP Recovery Amounts
recoverable from the Surcharged Rates by adding a surcharge .to the Surcharged Rates ("REP
Surcharge"). The REP'Surcharge, expressed in dollars per MWh, will be determined as follows:
L~~$~~~~~~i~:~I(@E~~~~_~:~!.i.:~~~E.!~:p'i~~=~Q_~:U~!'~~:~~~~lits.j:~(?:~E:2.~~;~~~;~i_7.D
3.3.2 REP Surcharge Amount.
The REP Surcharge Amount will be determined as provided in the following table. BP A
will subtract such REP Surcharge Amount from the REP Recovery Amounts before determining the
portion of remaining REP Recovery Amounts to be recovered from any other rates:
1~~$~~~~~!g~A~~~~iI~T~I'~!1.r.~~~r.g.~...~...I.:?r.~.~~.S..t.e..d....~.llE~~.~r.ge.d.!:()~~m:
! where:
IIPB-12322
12
Forecasted Surcharged Load = BPA's forecast of load to be served at the Surcharged
Rates for the applicable Fiscal Year as determined in
BPA's Rate Proceeding for the Rate Period in which
the Fiscal Year occurs.
3.3.3 Other Rates Subiect to Surrnarl!e. If it is determined in a Rate Proceeding
for any Rate Period that there are one or more rates (excluding the Surcharged Rates, the COU
Parties' PF Rates, and the Reference Rate) from which a portion of the REP Recovery Amounts are
recoverable on a basis other than (or in addition to) Pro Rata Load Share, then, before allocating the
remaining REP Recovery Amounts on a Pro Rata Load Share basis as provided in section 3.3.4,
BP A will subtract such portion from the REP Recovery Amounts that remain after subtracting the
REP Surcharge Amount added to the Surcharged Rates pursuant to section 3.3.1. Under no
circumstances may a d~termination as described in this section 3.3.3 result in COU Parties' PF
Rates that are higher than such rates would be absent such determination.
3.3.4 AIloeation of Remaininl! Costs of REP Reeovery Amounts to ADDlieable
Rates. BP A will allocate to all Applicable Rates on a pro rata load share basis ("Pro Rata Load
Share") the REP Recovery Amounts that remain after subtraction of the REP Surcharge Amount
and any other amounts recovered pursuant to section 3.3.3. BPA will determine the Pro Rata Load
Share for each Applicable Rate by dividing (i) the forecasted loads to be served at such Applicable
Rate established in the Rate Proceeding for the Rate Period in which the applicable Fiscal Year
occurs by (ii) the sum of all forecasted loads to be served at all Applicable Rates in such Rate Period.
3.3.5 COD Parties' Aueement to Pav Allocated Share of Scheduled Amounts
and Refund Amounts. The COU Parties agree that BP A will include in their Tier I PF Rates for
the Payment Period a portion of the costs of the Scheduled Amounts equal to the COU Parties'
Allocated Share, which will be calculated as follows:
; COU Parties' Allocated
; Share
. .
. .
. .
. .
= I Scheduled Amount~ * (pF Recovery Amount -:- REP I
! Recovery Amounts) * (sum of the COU Parties' TOCAs !
~ the sum of all PF Customer TOCAs),
where,
PF Recovery Amount = the portion of the REP !
Recovery Amounts BP A allocates to Tier I PF !
Rates pursuant to section 3.3.4
BP A will not include in any COU Parties' PF Rates any portion .of the costs of the Scheduled
Amounts other than the COU Parties' Allocated Share.
The COU Parties agree that BP A will include in their Tier I PF Rates for the Payment
Period a portion of the costs of the Refund Amounts equal to the COU Parties' Refund Share, which
will be calculated as follows:
] ]PB.]2322
]3
COU Parties' Refund Share - Refund Amounts * (PF Recovery Amount REP
-
Recovery Amounts) * (sum of the COU Parties' TOCAs
~ the sum of all PF Customer TOCAs),
./ where,
PF Recovery Amount = the portion of the REP
Recovery Amounts BP A allocates to Tier I PF
Rates pursuant to section 3.3.4
BP A will not include in any COU Parties' PF Rates any portion of the costs of the Refund Amounts
other than the COU Parties' Refund Share.
3.3.6 COU Parties' and 10Us' Al!reement Concerning REP Settlement Benefits.
(i) The COU Parties agree to pay a portion of the REP Recovery Amount equal
to no more or less than the COU Parties' Allocated Share plus COU Parties'
Refund Share, both as determined in accordance with section 3.3.5. If BP A
under- or over-recovers REP Recovery Amounts from the COU Parties for a
Rate Period, the COU Parties agree to have adjustments to their BP A power
bills to correct such under- or over-recovery.
(ii) The 10Us agree to accept from BP A for each Rate Period an aggregate
amount of REP Settlement Benefits that is no more or less than the REP
Settlement Benefits for such Rate Period determined in accordance with
section 3.1 or 3.6, as applicable. IfBPA under- or over-pays to the 10Us in
aggregate the REP Settlement Benefits for a Rate Period, the 10Us agree to
have reflected in their REP Settlement Benefits for subsequent Rate Periods
(or in their REP benefits ifsuch adjustment occurs after the Payment Period),
adjustments to correct such under- or oVi"-payment.
(iii) Each IOU agrees to accept from BP A for each Rate Period an amount of
REP Settlement Benefits that is no more or less than the amount of such
IOU's IOU-Specific REP Settlement Benefit Amounts determined in
accordance with section 6. If BP A pays any IOU an amount of REP
Settlement Benefits that is more or less than the amount of such IOU's 10U-
Specific REP Settlement Benefit Amounts determined in accordance with
section 6, such IOU agrees to have reflected in its IOU-Specific REP
Settlement Benefit Amounts for subsequent Rate Periods (or in its REP
benefits if such adjustment occurs after the Payment Period), adjustments to
correct such under- or over-payment.
3.3.7 Parties' Rights to Information from BP A. BP A will, within 30 days of
receiving a request from any Party, provide to such Parly the requested information concerning
Total Settlement Benefits paid or transferred under, or any adjustments made consistent with
section 3.3.6 of, this Settlement Agreement. BP A will provide such information for any period
specified by the requesting Party up through the end of the calendar month preceding the calendar
month during which BP A receives the request. BP A may comply with its obligations under this
IIPB-12322
14
section 3.3.7 by making the requested information available on its Website in a manner accessible to
the Parties.
3.4 Creditinl! of Refond Amounts. For any Fiscal Year in which the Refund Amount is
greater than zero, BP A will refund the Refund Amounts by crediting the amounts to PF Customers
as follows:
(i) fifty percent of the Refund Amount for such Fiscal Year will be credited to each PF
Customer identified in the table contained in Exhibit B in the amounts set forth in
the far right column entry on the row in which such PF Customer's name appears;
and
(ii) the remaining Refund Amount for such Fiscal Year will be credited to PF Customers
according to the following formula:
r-C~;t;;;;;-~~:sp~~i-fi~T;~tTR~-fu-;:;d----T;:-rT;~;jc~si;;;;;etR~fu;:;d Amount * Tier I
mmm.....m.m..........m.....m.m..........mm.....m.................mmm......................m_j...Customer IQ<::A...?~.~.re.... . ... ... ...........................m.. ......................m.......
! where:
i Tier I Customer Refund Amount
. .
= i Refund Amount for such Fiscal Year remaining i
i after application of item (i) of this section 3.4, i
i~ .
."TT~; f..c~.~i.;~~~;...~f6.CA..Shar~..--..._......H......._..H.l...;t.th.~..::fie;..i..c~sto.~e;.;~. TOeA -7 the su~ of all PF i
: Customers' TOCAs,
provided, however,
that solely for purposes of the calculation of:
Tier I Customer TOCA Share, (a) only i
the TOCAs of Existing Customers (as i
that term is defined in the TRM) will be '
used, and (b) the TOCA for Grant!
County PUD will calculated on the basis i
of an assumed TOCA Load (as that term i
is defined in the TRM) equal to 41. 7S i
.m~\:".r.~g"l>4~.:........m..
(iii)
The manner of payment of such refunds will be determined by BP A in the Rate
Proceeding for the applicable Rate Period.
3.5
Sales of Excess Enerl!V. BPA will not, in any Rate Proceeding for any Rate Period,
(i)
apply or assess to sales of excess, surplus, or secondary energy produced by the
federal system (including resources acquired by BP A for service at Tier I PF Rates or
Tier 2 PF Rates) any REP Surcharge, section 7(b)(3) surcharge, or other costs, if and
to the extent that any such REP Surcharge, section 7(b)(3) surcharge, or other costs,
recover from the sale of such energy a portion of the REP Recovery Amounts, or
IIPB-12322
15
(ii) include any such energy in the Pro Rata Load Share calculation pursuant to section
3.3.4
in any manner that causes
(a) the COU Parties' Allocated Share, or
(b) the COU Parties' PF Rates
to be greater than they would have been absent such REP Surcharge, section 7(b)(3) surcharge, other
cost, or inclusion in the Pro Rata Load Share calculation. Nothing in this section 3.5 will preclude
any application or assessment with respect to any BP A rate insofar as it does not cause the COU
Parties' Allocated Share or COU Parties' PF Rates to be greater than they would have been' absent
such application or assessment. Nothing in this section 3.5 will modify in any way the treatment of
Tier 2 PF Rates as provided in the TRM.
,
3.6 Court Decision Related to Allocation of Costs of REP Settlement Benefits to
Non-Settline: Entities. If a court with jurisdiction (i) makes a final decision on the merits that
precludes the recovery of any REP Settlement Benefits through the rates of Non.Settling Entities as
established in the BP.12 Proceeding or the REP-]2 Proceeding, or (ii) makes a final decision on the
merits of any issue in the Litigation that (a) pertains to the calculation ofREP benefits under section
5(c) of the Act or other matters enumerated in section 7.4(i) through 7.4(vii), and (b) is inconsistent
with the provisions of this Settlement Agreement, then:
(I) rates and any refunds insofar as applicable to the Non-Settling Entities will be
consistent with the court decision;
(2) pursuant to the waivers in section 7, the Payment Period Rates will be calculated
consistent with sections 3.1 through 3.5 (unaffected by any modification to the
calculation of rates and refunds insofar as applicable to the Non-Settling Entities
consistent with section 3.6(1)); and
(3) BP A will pay the IOUs, as REP Settlement Benefits for each Fiscal Year, (A) the
costs of REP Settlement Benefits includable pursuant to section 3.6(2) in Payment
Period Rates, plus (B) amounts recoverable in rates insofar as applicable to the Non.
Settling Entities consistent with section 3.6(1).
3.7 BPA Final Decisions in REP-12 Proceedine:. IfBPA in the record of decision for
its final decision in the REp. I 2 Proceeding does not include specific determinations that BP A
(i)
will enter into this Settlement Agreement and, pursuant to this Settlement
Agreement, pay to the IOUs as REP Settlement Benefits for each Fiscal Year in the
entire Payment Period, the Scheduled Amounts set forth in Table 3. I (absent a final
decision by a court with jurisdiction, as described in section 3.6),
(ii)
will include in the COU Parties' PF Rates for the entire Payment Period a portion of
the REP Recovery Amount equal to (i) the COU Parties' Allocated Share plus (ii)
the COU Parties' Refund Share, both as determined in accordance with section
3.3.5, and
llPB-12322
16
(iii) may lawfully set rates and establish refund amounts applicable to Non-Settling
Entities consistent with the provisions of sections 3.2 through 3.5, as applicable, and
will do so for the entire Payment Period (absent a final decision by a court with
jurisdiction, as described in section 3.6),
then, irrespective of whether the Administrator has executed this Settlement Agreement, all
provisions of this Settlement Agreement and any REP Settlement Implementation
Agreement will be void ab initio. If BP A fails to issue a record of decision for its final
decision,in the REP-12 Proceeding by September I, 2011, then all provisions of this
Settlement Agreement and any REP Settlement Implementation Agreement will be void ab
initio.
3.8 Challenl!es to DP A Actions to Carry Ont Settlement Al!Teement.
3.8.1 No party Challenl!es to DPA Actions to Carry Out Settlement Al!Teement.
No Party will, except as provided in section 3.8.2:
(i) challenge BP A actions that implement this Settlement Agreement consistent
with its terms, or
(ii) assert that BPA should, for the Settlement Period (or any portion of the
Settlement Period), make payments to, or set rates of, any entity in a manner
inconsistent with this Settlement Agreement;
provided, however, that nothing in this Settlement Agreement will limit any Party's right to (a)
oppose any arguments that BP A should establish rates in a manner inconsistent with this Settlement
Agreement, or (b) challenge any other BPA actions.
3.8.2 Responses to Others' Challenl!es. If any entity proposes or asserts in any
proceeding that payments to or by, or rates applicable to, any entity for the Settlement Period (or
any portion of the Settlement Period) should be made or established so as to be inconsistent with this
Settlement Agreement, then each Party will have the right to assert any claims or arguments it may
have regarding the payments or rates affected by such proposal or assertion. If any entity so
proposes or asserts in any BP A proceeding, then BP A will provide thereafter in such proceeding an
opportunity for each Party to submit direct and responsive testimony and other fLlings to
affirmatively establish any claims or arguments it may have regarding the payments or rates affected
by such proposal or assertion.
3.8.3 Limitation on Remedies for Claims Related to Costs of Service to DSls. If
a court with jurisdiction makes a final decision with respect to any past, current, or future claim
against BP A or any DSl with respect to inclusion in any COU Parties' PF Rates of any costs or
amounts arising from any rate at which BP A serves any DSI, none of the costs of any remedy for
such claim may adversely affect, except as provided in section 3.6, the Total Settlement Benefits of
any IOU.
4. INTERIM AGREEMENT TRUE-UP PAYMENT AMOUNTS
BP A will, at the time and in a manner consistent with the provisions of the 2008 Residential
Exchange Interim Reliefand Standstill Agreements (Contract Nos. 08PB-12438, 08PB-12439, 08PB-
12441, 08PB-12442) ("Interim Agreements"), pay the amounts determined by BPA, pursuant to the
WP-07S ROD and the "2010 BPA Rate Case Wholesale Power Rate Final Proposal: Lookback
IIPB-12322
17
Recovery and Return" (WP-IO-FS-BPA-07), to be owed to the applicable 10Us as Interim
Agreement True-up Payment Amounts ("Interim Agreement Tnie-up Payment Amounts") under
the Interim Agreements; provided, that BP A payment of Interim Agreement True-up Payment
Amounts pursuant to section 9(a)(l) of each Interim Agreement will commence no later than as
follows:
(i) If no petition or other legal action is filed in a court with jurisdiction for review of the
lawfulness of this Settlement Agreement, then payments by BP A of such amounts
will commence 95 calendar days after the Effective Date; or
(ii) If one or more petitions or other legal actions are filed in a court with jurisdiction for
review of the lawfulness of this Settlement Agreement; then BP A will commence
payment of such amounts 30 days after a final, non-appealable order by such court
that dismisses such actions or challenges or that otherwise upholds this Settlement
Agreement, provided, however, that if such final, non-appealable order upholds this
Settlement Agreement in less than all respects, BP A will make such payments to the
maximum extent consistent with such final, non-appealable order.
Upon the satisfaction of the condition in (i) or. (ii) above, the True-up Payment Event described in
section 8 of such Interim Agreements will be deemed to have occurred. In addition, if Congress
adopts legislation as contemplated by section 8 of this Settlement Agreement, then any applicable
IOU may elect to receive its Interim Agreement True-up Payment Amount by providing BPA with
written notice of such election, in which case, (a) the True-up Payment Event described in section 8
of the Interim Agreement of such electing IOU will be deemed to have occurred and the Interim
Agreement True-up Payment Amount of such IOU will be deemed due and payable to such IOU,
and (b) BPA will pay to such IOU its Interim Agreement True-up Payment Amount no later than 30
days after BP A's receipt of such notice.
As specified in the Interim Agreements, the applicable 10Us' respective Interim True-up
Payment Amounts are the principal amounts set forth in Table 4, together with applicable interest:
Table 4 Interim Tme-n
IOU
Interim Tme-n
Avista
$2,410,000
NorthWestern Ener
Portland General
$10,199,000
$12,007,000
$56,994,000
PSE
The Interim Agreement True-up Payment Amounts are in addition to and not a component of the
REP Settlement Benefits provided for in section 3.
5. ENVIRONMENTAL ATTRIBUTES
5.1 10Us. Consistent with and pursuant to Exhibit C, BP A will convey certain Tier I
RECs and Carbon Credits (or the revenues generated by the sale of such) for each Fiscal Year to
10Us that are Participating 10Us for such Fiscal Year; provided, however, if any Non-Settling
IIPB-12322
18
Entity does not amend Exhibit H of its CHWM Contract in the same manner described for COU
Parties in section 5.2, then BPA will (i) convey to the IOUs the value of such Non-Settling Entity's
share of the Tier ] RECs and Carbon Credits that would otherwise have been avai]able for transfer
to the IOUs by paying to the IOUs the value of such Tier I RECs and Carbon Credits, and (ii) to the
maximum extent possible, recover the cost of such conveyance in rates applicable to such Non-
Settling Entity pursuant to BP A's ratemaking authority as provided in section 9 in Exhibit H to such
Non-Settling Entity's CHWM Contract.
5.2 COU Parties. Each COU Party hereby agrees that Exhibit H of its CHWM
Contract is, as of the Effective Date, replaced in its entirety consistent with the template form of
Exhibit H set forth as Exhibit H to this Settlement Agreement. BP A will, within 60 days of the
Effective Date, deliver to each COU Party a replacement Exhibit H to its CHWM Contract identical
in form to the Exhibit H attached to this Settlement Agreement except for the insertion of the
appropriate contract number and customer name, which will be effective from the Effective Date
without further action or signature by BP A or the COU Party.
5.3 COUs That Are Non-Settline: Entities. BP A will ask each Non-Settling Entity that
has a CHWM Contract to amend Exhibit H of its CHWM Contracts in the same manner described
in section 5.2 for COU Parties.
6. ALLOCATION TO IOUS OF REP SETTLEMENT BENEFITS
The REP Settlement Benefits to be paid to the IOUs in accordance with section 3, together
with any Environmenta] Attributes (or their value) to be transferred to the IOUs in accordance with
section 5, will be distributed among the IOUs consistent with this sectio~ 6 and each IOU will, for
each Fiscal Year, receive its IOU-Specific REP Settlement Benefit Amount and its share of any
Environmenta] Attributes (or their value) as determined in accordance with this section 6.
For each Fiscal Year, BP A will develop rates, in the Rate Proceeding for the applicable Rate
Period, such that each IOU will be paid its IOU-Specific REP Settlement Benefit Amount as
calculated for such Fiscal Year pursuant to this section 6.
6.1 Determination ofIOU-Soecific REP Settlement Benefit Amount.
6.1.1 Calcnlation ofIOU-Soecific REP Settlement Benefit Amounts. For each
Fi.sca] Year, in the Rate Proceeding for the applicab]e Rate Period, each IOU's IOU.Specific REP
Settlement Benefit Amount will be calcu]ated according to the following formula:
i IOU-Specific REP Settlement
i Benefit Amount for such IOU'
i for such Fisca] Year
I
the algebraic sum of (i) the product of (a) the IOU
Specific Unconstrained Amount for such IOU
mu]tiplied by (b) the Constrained Tota] Benefit
Ratio for such Fisca] Year, and (ii) the amount of
any adjustment for such IOU pursuant to section
! 6.2. I
-.-;----t-.--..--..---..--...-....------..-..---,
i i i
. i i
i I
______________~J_____,_,.,__.._______________ .... ___________.___________________..._..._______________....__.__.________J
i
;
i where:
I
L "_____.....______
] ]PB-]2322
]9
1
IIOU-Sp~cific U~'constrained' = I t
! Amount for an IOU for a Fiscal ! I
Year !
i (i
,
, s
-------------------_._~-----_...- "."..-
Constrained Total Benefit Ratio = t
for such Fiscal Year d
~
Reference Rate for a Fiscal Year = i t
t
P
Aggregate Unconstrained = t
Amount for a Fiscal Year
he product of (i) the amount (if any) by which such
OU's ASC for such Fiscal Year exceeds the
Reference Rate for such Fiscal Year multiplied by
i) the sum of such IOU's Residential Loads for
uch Fiscal Year
he REP Settlement Benefits for such Fiscal Year
ivided by the Aggregate Unconstrained Amount
or such Fiscal Year
he Base Rate for such Fiscal Year as determined in
he BP A Rate Proceeding for the applicable Rate
eriod, except as otherwise provided in section 6. 1.2
he sum of the IOU-Specific Unconstrained
Amounts for alllOUs for such Fiscal Year
If the Aggregate Unconstrained Amount for the applicable Fiscal Year is greater than or
equal to the REP Settlement Benefits determined for that Fiscal Year pursuant to section 3, then the
IOU-Specific REP Settlement Benefit Amount for such Fiscal Year will not be subject to
recalculation pursuant to section 6. I .2.
If the Aggregate Unconstrained Amount for the applicable Fiscal Year is less than the REP
Settlement Benefits determined for that Fiscal Year pursuant to section 3, then the IOU-Specific
REP Settlement Benefit Amounts will be recalculated as provided in section 6. I .2.
6.1.2 Recatculation of IOU-Soecific REF Settlement Benefit Amounts. If the
Aggregate Unconstrained Amount determined in the initial calculation for any Fiscal Year in
accordance with section 6.1.1 is less than the REP Settlement Benefits determined for that Fiscal
Year pursuant to section 3, the IOU-Specific REP Settlement Benefit Amount for each IOU will be
calculated in the same manner provided in section 6. I. I, except that the Reference Rate will be
reduced such that the Aggregate Unconstrained Amount for the applicable Fiscal Year, as
determined in accordance section 6. I. I, will equal (or be as nearly equal to as possible without being
less than) the REP Settlement Benefits for such Fiscal Year.
6.2 IOU Settlement Adinstments. The IOU-Specific REP Settlement Benefit Amount
for a Participating IOU for any Fiscal Year will include any adjustments made pursuant to this
section 6.2.
6.2.1 Downward Adinstment for IOU Adiustment Amonnts. For any
Participating IOU with a remaining. IOU Adjustment Amount for a given Fiscal Year, the IOU-
Specific REP Settlement Benefit Amount of such Participating IOU for such Fiscal Year will include
a downward adjustment equal to the lesser for such Fiscal Year of:
(i) the Maximum IOU Annual Settlement Adjustment Amount for such
Participating IOU, or
(ii) the remaining IOU Settlement Adjustment Amount Balance for such
Participating IOU, ifany,
provided, that if and to the extent any such downward adjustment would result in the IOU-Specific
REP Settlement Benefit Amount for such Participating IOU for such Fiscal Year that is below zero,
II PB-12322
20
such downward adjustment will not be made to such extent, but will remain in the IOU Settlement
Adjustment Amount balance at the end of such Fiscal Year.
6.2.2 Uuward Adiustments to Allocate IOU Adiustment Amounts. The amount
of each downward adjustment made pursuant to section 6.2. I in the IOU-Specific REP Settlement
Benefit Amount for a Participating IOU for a Fiscal Year will be allocated among the recipient
Participating IOUs (as specified in Table 6.2.2) for such Fiscal Year in proportion to the respective
IOU-Specific Unconstrained Amounts for such Fiscal Year for such recipient Participating IOUs
thereby increasing the amounts to be included.in such other Participating IOUs' IOU-Specific REP
Settlement Benefit Amounts for such Fiscal Year. For the avoidance of doubt, a Participating IOU
whose IOU-Specific REP Settlement Benefit Amount includes a downward adjustment pursuant to
section 6.2. I may also have pursuant to this section 6.2.2 an increase included in its IOU-Specific
REP Settlement Benefit Amount for such Fiscal Year as a result of the inclusion of a downward
adjustment to the IOU-Specific REP Settlement Benefit Amount of another Participating IOU for
such Fiscal Year. Attached to this Settlement Agreement as Exhibit D is a hypothetical example of
the operation of section 6.1 and this section 6.2. Such Exhibit D is for illustrative purposes only.
Participating IOUs Subject to
Downward Ad'ustment
Avista
NorthWestern Ener ,Portland General, PSE
Idaho Power (to the extent of92% of any Avista, NorthWestern Energy, PacifiCorp, Portland
downward ad'ustment of Idaho Power General, and PSE
Idaho Power (to the extent of 8% of any Avista, PacifiCorp, Portland General, and PSE
downward ad'ustment of Idaho Power
PacifiCo
NorthWestern Ener ,Portland General, and PSE
Portland General
NorthWestern Ener and PSE
PSE
NorthWestern Ener
6.2.3 Definitions and Amounts Related to IOU Adjustments Under Section 6.2.
As used in this section 6.2, the following terms will have the meanings specified below:
(i)
"Initial IOU Adjustment Amount" means an amount for each of the
following IOUs equal to the following respective amounts:
Table 6.2.3(i) (Initial IOU Adiustment Amount)
IOU Initial IOU Adiustment Amount
Avista $22,985,810
Idaho Power $45,140,170
IIPB-12322
21
PacifiCorn
Portland General
(ii)
(iii)
$66,721,315
$4,669,222
"IOU Adjustment Amount Balance" for an IOU will be initially set equal to
its Initial IOU Adjustment Amount, if any, and will thereafter be reduced
pursuant to this section 6.2 until extinguished; provided, the unextinguished
amount of the IOU Adjustment Amount Balance will be increased by interest
on the amount thereof, accrued at the rate of three percent, compounded
annually, until the earlier of the extinguishment of such Initial Adjustment
Amount or September 30, 2028; provided fimher, such interest will not
commence to accrue on the IOU Adjustment Amount Balance for Idaho
Power unless and until Idaho Power begins to receive REP Settlement
Benefits from BPA. The IOU Adjustment Amount Balance subject to the
foregoing interest calculation for a given Fiscal Year will be the quotient
resulting from (a) summing IOU Adjustment Amount Balance as of the
beginning of such Fiscal Year and the IOU Adjustment Amount Balance at
the end of such Fiscal Year, and (b) dividing the resulting sum by two. Such
interest will be added to IOU Adjustment Amount Balance on the first day of
the Fiscal Year following the Fiscal Year to which such interest applies.
"Maximum IOU Annual Adjustment Amount" means for each of the
following IOUs an amount for any Fiscal Year equal to the following
respective amounts set forth for such IOU:
Table 6.2.3Cil (Maximum IOU Annual Adiustment Amount)
IOU Maximum IOU Annual Adjustment Amount for a Fiscal
Year
Avista $2,004,778
PacifiCom $8,442,636
Portland General $] ,237583
(iv)
"Maximum IOU Annual Adjustment Amount" means, for Idaho Power for
a given Fiscal Year, an amount equal to fifty percent of the IOU-Specific
REP Settlement Benefit Amount for Idaho Power for such Fiscal Year before
any adjustment thereto made pursuant to this section 6.2.
6,2.4 NorthWestern Ener2\' Adiustments for Fiscal Year 2012 Throul!h Fiscal
Year 2016. For each of the first four Fiscal Years of the Payment Period (Fiscal Year 20]2 through
Fiscal Year 20]5), (i) the IOU-Specific REP Settlement Benefit Amount for NorthWestern Energy
will be increased by $766,000; and (ii) the aggregate IOU-Specific REP Settlement Benefit Amounts
for the Participating IOUs (exclusive of NorthWestern Energy and Idaho Power) for such Fiscal
Year will be reduced by $766,000. For each of the fifth and sixth Fiscal Years of the Payment
Period (Fiscal Years 2016 and 2017), (a) the IOU-Specific REP Settlement Benefit Amount for
NorthWestern Energy will be increased by $383,000; and (b) the aggregate IOU-Specific REP
Settlement Benefit Amounts for the Participating IOUs (exclusive of NorthWestern Energy and
IIPB-12322
22
,
Idaho Power) for such Fiscal Year will be reduced by $383,000. Each reduction described in the
preceding two sentences will be allocated among the Participating 10Us (exclusive of NorthWestern
Energy and Idaho Power) for such Fiscal Year in proportion to the respective IOU-Specific
Unconstrained Amounts for such Fiscal Year for such Participating 10Us, thereby decreasing the
amounts to be included in the IOU-Specific REP Settlement Benefit Amounts for each of the
Participating 10Us (exclusive of NorthWestern Energy and Idaho Power) for such Fiscal Year. Any
adjustment to be made pursuant to this section 6.2.4 for any Fiscal Year for which
NorthWestern Energy is not a Participating IOU will be deferred until the earliest Fiscal
Year for which (a) NorthWestern Energy is a Participating IOU and (b) no adjustment is to
otherwise be made pursuant to this section 6.2.4 for such Fiscal Year; provided, that, any
deferral pursuant to this section 6.2.4 will be implemented such that adjustments for each
Fiscal Year in a Rate Period will be equal and will not exceed $766,000 in any Fiscal Year.
6.2.5 No Survival of IOU Adiustment Amounts. At the end of the Payment
Period, any IOU Adjustment Amount Balance then remaining will be deemed fully extinguished,
and no IOU will have any obligation to pay such IOU Adjustment Amount Balance or to offset such
IOU Adjustment Amount Balance against other payments or entitlements that it may otherwise be
entitled to receive.
6.3 Allocation of Environmentat Attributes. Any Environmental Attributes (or the
value thereol) to be transferred to the 10Us for any Fiscal Year in accordance with section 5 will be
allocated among the Participating 10Us for such Fiscal Year in proportion to the respective 10U-
Specific REP Settlement Benefit Amounts for such Fiscal Year for such Participating 10Us as
calculated pursuant to sections 6.1.1 and 6.1.2 and without regard to any adjustments to 10U-
Specific REP Settlement Benefit Amounts pursuant to section 6.2.
,
6.4 Restriction on Inclusion of New Resources in 10Us' ASC. Each IOU waives, as
provided in this section 6.4, the right to include in its ASC, for any Exchange Period during the
Payment Period, the cost of any major resource addition forecasted to occur during the Exchange
Period as allowed by the ASC Methodology. Such waiver shall apply only to major resource
additions that become, or are scheduled to become, commercially operational during such Exchange
Period, and will be and remain in effect only with respect to such major resource additions
for a period of no more than 24 months concurrent with a Rate Period with a duration of 24
months (unless applicable to an Exchange Period concurrent with a Rate Period with a
duration 36 months, in which case the waiver will remain in effect for the duration of such
Exchange Period, provided there has been no previous Rate Period with a duration longer
than 24 months). For clarification, all major resource additions that become commercially
operational before an Exchange Period, whether during the Base Period or after the Base Period but
prior to such Exchange Period, will be allowed in ASC for such Exchange Period as provided in the
ASC Methodology. This waiver will not apply to any Exchange Period for which BP A sets any
rates in accordance with section 3.6. As used in this section 6.4, the terms "ASC Methodology" and
"Exchange Period" have the meanings given such terms in Exhibit A attached hereto (Form ofREP
Settlement Implementation Agreement).
6.5 Application of Sections 6.1 Throum 6.4 to Court Decision Related to Litie:ation
or Settlement Aueement for Non-Settline: Entities. If a court with jurisdiction (i) makes a
decision that has the effect of precluding BPA from'establishing rates or refunds applicable to Non-
Settling Entities in accordance with sections 3.3 and 3.4, or (ii) makes a decision on the merits of any
issue in the Litigation that alters the determinations made by BPA in the WP-07S ROD with respect
to any matter enumerated in section 7.4(i), 7.4(iii), 7.4(iv), or 7.4(v), then the allocation to and
IIPB-12322
23
among the 10Us of any portion of refunds to or from Non-Settling Entities will be made
prospectively and will take into account the court's decision and the specific IOU or 10Us affected
by the court's decision. For example, in implementing a court decision that alters BP A's decision
with respect to Lookback Claims for a specific IOU, but not other 10Us, the REP Settlement
Benefits of such other 10Us will not be adversely affected by such decision either directly or
indirectly.
7. WAIVERS AND SA TISF ACTION OF OBLIGATIONS AND CLAIMS
7.1 Acknowledlrnlents. Each Party understands that the Litigation may not be
dismissed or may continue notwithstanding this Settlement Agreement. Each Party also
understands that the Settlement Agreement and the rates for wholesale power that BP A establishes
consistent with this Settlement Agreement may be subject to judicial review. In connection with the
waivers and releases set forth in this Settlement Agreement, each Party understands and accepts the
risk that Non-Settling Entities may achieve, through litigation, results that assign costs or benefits to
Non-Settling Entities that differ from the costs and benefits assigned to the Parties under this
Settlement Agreement.
In connection with the waivers and releases set forth in this Settlement Agreement, each
Party acknowledges that it is aware that it may hereafter discover facts in addition to or different
from those that it knows or believes to be true with respect to the subject matter of this Settlement
Agreement, but it is each Party's intention, except as expressly retained in section 7.5 and as
'Provided in section 10.2, tliat all claims encompassed by the subject matter of this Settlement
Agreement, including those that it may not know or suspect to exist at the time of execution of this
Settlement Agreement, will be extinguished by the waivers and releases set forth in this Agreement.
The waivcr and releases set forth in this Settlement Agreement will remain in effect notwithstanding
the discovery or existence of any such additional or different facts relating to the subject matter of
this Settlement Agreement.
7.2 COU Group's Waivers. Each entity in the COU Group waives any and all past or
future rights it may have to have included in the COU Parties' PF Rates an amount of REP Benefit
Costs that is different from the COU Parties' Allocated Share as defined in section 3. This waiver
includes (i) a waiver of any claims that BP A should set rates inconsistent with this Settlement
Agreement, (ii) a waiver of statutory rights or rate protections greater than are provided for in this
Settlement Agreement, notwithstanding any past or future legal interpretations of section 5(c),
7(b)(2), or 7(b)(3) of the Act by BPA, any court, or any other entity, and (iii) except as provided in
section 10.6, a waiver of any existing or future rights to refunds, credits, cash paymenrs, or any other
adjustments that, if applied, would allow COU Parties to bear REP Benefit Costs that are lower than
the COU Parties' Allocated Share. Each entity in the COU Group intends and agrees that the COU
Parties' PF Rates will reflect the COU Parties' Allocated Share provided for in section 3 regardless
of whether BPA is required to reflect a different amount ofREP Benefit Costs in the rates applicable
to Non-Settling Entities. Each entity in the COU Group also intends and agrees that (a) the REP
Settlement Benefits paid to the 10Us under this Settlement Agreement will be consistent with
section 3 regardless of any REP Benefit Costs reflected in the rates applicable to Non-Settling
Entities, and (b) such REP Settlement Benefits will be allocated among the 10Us as provided in this
Settlement Agreement.
7.3 IOU Group's Waivers. Except as provided in section 7.5, each IOU waives any
and all past or future rights it may have to receive REP Benefit Payments for the Payment Period
that differ from its share of the REP Settlement Benefits provided for in this Settlement Agreement.
This waiver includes (i) a waiver of any claims that BP A should set rates inconsistent with this
IIPB-t2322
24
Settlement Agreement, (ii) a waiver of any statutory rights to REP Benefit Payments for the
Payment Period that are greater than the REP Settlement Benefits provided for in this Settlement
Agreement, notwithstanding any past or future legal interpretations of section 5(c), 7(b)(2), or 7(b)(3)
of the Act by BPA, any court, or any other entity, and (iii) except as provided in section 10.6, a
waiver of any existing or future right to refunds, credits, cash payments, or any other adjustments
that, if applied, would otherwise change the COU Parties' Allocated Share. Each entity in the IOU
Group that is not an IOU waives any right to assert in any administrative or judicial proceeding that
REP Benefit Payments for any IOU for the Payment Period should differ from its share of the REP
Settlement Benefits provided for in this Settlement Agreement.
Each entity in the IOU Group intends and agrees that each IOU's share of REP Settlement
Benefits for the Payment Period will be as provided for in this Settlement Agreement. No entity in
the IOU Group will seek to have included in COU Parties' PF Rates costs of REP Settlement
Benefits that exceed the COU Parties' Allocated Share irrespective of whether BP A is required to
reflect a different amount ofREP Benefit Costs in the rates applicable to Non-Settling Entities.
7,4 Satisfaction of Claims and Fulfillment of Oblil!ations. Except as provided in
section 7.5, each Party agrees, as to each other Party, that the rights and obligations undertaken by
the Parties in accordance with this Settlement Agreement fully satisty, discharge, and extinguish any
and all obligations, claims, and liabilities among the Parties with respect to:
(i) all benefits provided to any IOU for the period October I, 2001, through September
30, 2011, under section 5(c) of the Act or under any prior settlement or purported
settlement of rights under section 5( c) of the Act, whether pursuant to a BP A power
sales contract (including amendments, novations, and replacements thereof) or
otherwise and whether in the form of payment, power delivery, buyout of power
delivery, or otherwise; .
(ii) all benefits (other than Total Settlement Benefits) provided or to be provided to any
IOU for the Payment Period under section 5(c) of the Act;
(iii) any Lookback Claims against any IOU or any Lookback Claims payments or
recovery from any IOU, except as otherwise provided in section 7.6;
(iv) any Load Reduction Agreement or Load Reduction Agreement payment or
recovery;
(v) any Deemer Amount;
(vi) the manner in which BP A's rates, obligations, or authorities (including the
implementation of section 7(b)(2) or 7(b)(3) of the Act) were used or applied or
should have been used or applied in the determination, payment, or collection of any
amount referred to in item (i), (ii), (iii), (iv), or (v) above; and
(vii) any overcharge by BP A of any COU for any amount referred to in item (i), (ii), (iii),
(iv), (v) or (vi) above.
7.5 IOUs' Retained Ril!bts and Claims. Notwithstanding the provisions of sections
7.3,7.4,7.7, and 7.8, ~ut subject to section 3.8, each IOU expressly retains, and does not waive,
IIPB-12322
25
(i) any and all rights it has as of the Effective Date, or may later acquire, to receive from
BPA the Non-Settling Entities' portion of the costs ofREP Benefit Payments for the
Settlement Period; and
(ii) any and all rights, claims, and defenses with respect to Non-Settling Entities in the
Litigation or in any future proceeding or litigation.
7.6 Permitted Lookback Amoonts. Notwithstanding the satisfaction, discharge, and
extinguishment of any and all other Lookback Claims pursuant to section 7.4(iii) above, the Parties
agree, as among themselves and subject to section 10.2, that BP A will continue to deduct Lookback
Amounts from REP benefits paid to the IOUs for the period through September 30, 2011, and
continue to pay Lookback Amounts to COUs for the period through September 30, 201], all in
accordance with the WP-IO ROD and the Lookback Recovery and Return document in the 2010
BPA Rate Case Wholesale Power Rate Final Proposal (WP-IO-FS-BPA-07).
7.7 Further Aueements and Waivers Related to Satisfied Claims. Without limiting
the generality of section 7.4 above, the Parties specifically agree that:
(i) PSE and PacifiCorp will retain any payments previously received under their
respective Load Reduction Agreements;
(ii) all Lookback Claims and Deemer Amounts owed by any IOU are fully satisfied,
discharged, and extinguished as of October I, 2011; and
(iii) each Party, as to each other Party, waives any and all claims for damages, refunds,
disgorgement, recoupment, restitution, setoff, costs, attorneys' fees, or other
monetary or non-monetary remedies or relief (in the Litigation or otherwise) relating
to the matters identified in sectioIJ 7.4(i), (ii), (iii), (iv), (v), (vi), or (vii) above.
7.8 Waivers Related to Interim Agreement True-Uo Payment Amoonts and
Environmental Attributes. Each Party, as to each other Party, waives any and all past or future
claims for damages, refunds, disgorgement, recoupment, restitution, setoff, costs, attorneys' fees, or
other monetary or non-monetary remedies or relief it may have related to:
(i) the payment to any IOU of any Interim Agreement True-up Payment Amounts in
accordance with section 4; and
(ii) the provision to any IOU of certain Tier I RECs and Carbon Credits (or the value
thereof) in accordance with section 5;
provided, that no IOU waives its rights to enforce payment io such IOU of any Interim Agreement
True-up Payment Amounts in accordance with section 4 or waives its rights to enforce provision to
such IOU of certain Tier I RECs and Carbon Credits (or the value thereof) in accordance with
section 5.
7.9 No Release of Settlement Oblie:ations. Nothing in this section 7 releases any Party
from its obligations as set forth in this Settlement Agreement.
7.10 No ChalIenRes to Settlement Aueement. No Party will directly or indirectly
challenge, either in whole or in part, the legality of this Settlement Agreement or any REP
Settlement Implementation Agreement. If any person or entity challenges, either in whole or in
part, the legality of this Settlement Agreement or any REP Settlement Implementation Agreement,
IIPB-12322
26
no Party will support, directly or indirectly, any such challenge and each Party will cooperate as
appropriate in efforts to oppose or have dismissed such challenges.
8. LEGISLATION
The entities in the IOU Group and the COU Group, in accordance with this section 8, will
work together, directly or through associations, to urge the U.S. Congress to pass legislation
expeditiously to affirm the Settlement Agreement and direct BP A to perform it according to its
terms, in order to minimize the risk of protracted litigation arising from the Settlement Agreement.
The process for seeking such legislation will be developed through consultations among a
committee of interested principals of Parties ("Committee") and legislative specialists for Parties.
Pursuant to such process the Parties will jointly work in consultation with members of the
Northwest Congressional delegation on such legislation. BPA will participate in such process only
to the extent permitted by law.
During thc proccss seeking such legislation, each Party will refrain from proposmg or
supporting legislative language that will, ifadopted, have any of the following effects:
(i) materially change such legislation, or
(ii) add provisions to such legislation, or condition such legislation on additional
provisions or additional legislation, that will have a material adverse effect on any
Party.
During the process seeking such legislation, each Party also will refrain from proposing or
introducing (a) committee report language or floor statements inconsistent with such legislation, or
(b) any competing or alternative legislation inconsistent with such legislation.
If, during the process seeking legislative authorization, a Party concludes that continued
pursuit or adoption of the legislative authorization will have any effects of the type described above
in items (i) or (ii), thcn thc Party will consult with the Committee (and the legislative specialists)
regarding the Party's conclusion. If such consultation does not address such conclusion to the
Party's satisfaction, then the Party will notify each member of the Committee that the Party will no
longer support, and may oppose, the request for legislative authorization. The Party giving such
notice will be excused from its obligations under this section 8. Such Party will not be excused from
any other of its obligations under this Settlement Agreement.
For purposes of this section 8 only, the terms "Party" and "Parties" will not include BPA;
provided, however, if and to the extent consistent with law and Administration policy, BPA will
support legislation to affrrm this Settlement Agreement.
9. DISPUTE RESOLUTION
9.1 Scooe of Disoute Resolution Provisions. Disputes concerning any alleged breach
of this Settlement Agreement will be resolved as provided in this section 9. BP A will participate in
binding arbitration, as provided in this section 9, of any alleged breach of this Settlement Agreement
to the maximum extent permitted by law, and, if legislation as contemplated by section 8 is not in
effect, in compliance with BP A's Binding Arbitration Policy. For any dispute (i) not arising out of
any alleged breach of this Settlement Agreement (including claims against BP A insofar as such
claims allege that BP A has taken action contrary to or outside the scope of its statutory authority), or
(ii) that concerns an alleged breach of this Settlement Agreement but is not subject to binding
lIPB.]2322
27
arbitration under this sectian 9, the Parties will have whatever remedies are provided by law. As
used in this section 9, "alleged breach" includes alleged anticipatory breach.
9.2 Bindine: Arbitration Process.
9.2.1 Notice to BPA. Any Party that alleges any breach of this Settlement
Agreement must, before initiating binding arbitration, deliver electronic notice to. BP A, specifying:
(i) the nature afsuch alleged breach of this Settlement Agreement;
(ii) the Party or Parties alleged to have cammitted such breach;
(iii) the specific action or actions required to correct such alleged breach;
(iv) a date, not less than 30 nor mare than 60 days from the date such notice is
delivered, by which time the alleged breach must be corrected; and
(v) that binding arbitration under this Settlement Agreement will be initiated if
the alleged breach is not corrected within the specified periad.
Any claim af alleged breach subject to arbitration under this section 9 will be barred unless notice of
such claim has been given within 180 days of the date, as determined by the Arbitrator, on which the
Party making the claim knew, or reasonably should have known, af the alleged breach. Any Party
(other than BPA) may, ifit so chooses, in a natice delivered to BPA under this section 9.2.1, state its
claims in the alternative such that, if BPA states, in accordance with section 9.2.3, that it is not
obligated to and will nat engage in binding arbitration with respect to ane or more matter(s)
identified in the Dispute Notice, such Party may proceed with arbitration pursuant to section 9.4
with respect to the partians of such Party's claims within the scope of section 3.3.6.
9.2.2 BFA Delivery of DisDute Notice. If BPA receives notice as provided in
section 9.2.1, BPA will promptly deliver such notice (or, ifBPA is the Party initiating the dispute,
BPA will deliver its written natice) to all Nan-Settling Entities that are purchasers ofBPA pawer at
adjustable wholesale power rates and to all Parties (such Non-Settling Entities and Parties (including
BPA) callectively, the "Notice Recipients," and such natice, a "Dispute Notice"). In additian to. the
information required by section 9.2.1, BP A will include with the notice a notification that any
Notice Recipient that intends to. contest the arbitrability of the matter(s) identified in the Dispute
Natice must respand within 30 days of receiving the Dispute Notice indicating its intent to contest
arbitrability in accordance with section 9.3.2 or 9.4.1, as applicable, and that failure of any Notice
Recipient to respand indicating its intent to contest the arbitrability of the matter(s) within 30 days of
receiving a Dispute Natice will, for purpases of this Settlement Agreement, constitute a binding
admission by such Notice Recipient that the matter(s) identified in the Dispute Notice are subject to
binding arbitration under this Settlement Agreement. Notwithstanding section 13.1.1, Dispute
Notices, and any statements following or responses to. Dispute Notices required or permitted by
other provisions of this sectian 9, must be delivered electronically.
9.2.3 BPA Statement ConcerninJl: Arbitrabilitv. Within 30 days following
issuance of a Dispute Notice under section 9.2.2, BP A will deliver to all Notice Recipients a
statement (including an explanation af the basis therefor) of BPA's decision regarding whether,
consistent with section 9.1, BP A will engage in binding arbitration with respect to each matter
identified in the Dispute Natice. Any statement by BPA in accordance with this section 9.2.3 that
BP A will engage in binding arbitration with respect to. any such matter will be binding on BP A for
purpases af such arbitration.
IIPB-12322
28
9.2.4 Alllllicability of Binding Arbitration Provisions. If legislation as
contemplated by section 8 is in effect, then disputes between or among the Parties concerning any
alleged breach of this Settlement Agreement wiU be resolved by binding arbitration in accordance
with Exhibit E (Arbitration Procedures) and the additional terms set forth in section 9.3. For any
period during which legislation as contemplated by section 8 is not in effect,
(i) disputes between or among the Parties concerning alleged breach of this
Settlement Agreement with respect to which BP A has stated, in accordance
with section 9.2.3, that it will engage in binding arbitration will be resolved
by binding arbitration in accordance with Exhibit E;
(ii) disputes between or among COU Parties and IOUs within the scope of
section 3.3.6 will be resolved by binding arbitration in accordance with
Exhibit E and the additional terms set forth in section 9.4; and
(iii) all other disputes (except any disputes within the scope of section 14.3) will
not be subject to binding arbitration under this section 9.
In any arbitration under this section 9, the Arbitrator (as defined in section 4 of Exhibit E) will apply
the terms of this Settlement Agreement and may not modify, disregard, or add to the terms of this
Settlement Agreement. All Notice Recipients (including Parties) that elect or are permitted to
participate in the arbitration as provided in sections 2. I and 2.2 of Exhibit E will be referred to in
this section 9 and in Exhibit E as "Participants."
9.3 Bindin!! Arbitration Process with Le!!islation. This section 9.3 will govern disputes
concerning any alleged breach of this Settlement Agreement only if legislation as contemplated by
section 8 is in effect. Claims relating to Administrator determinations made in setting rates will be
subject to arbitration under this section 9.3 only to the extent such claims aUege that, as a result of
such determinations, a Party has incurred or will incur costs or has received or will receive payments
inconsistent with the terms of this Settlement Agreement.
9.3.1 ChalIen!!es to Alllllicabilitv of Bindin!! Arbitration Provisions. If in its
statement in accordance with section 9.2.3, BPA states that it will not engage in binding arbitration
with respect the matter(s) identified in the Dispute Notice, any dispute regarding the applicability of
the arbitration provisions of this Settlement Agreement will be a matter for the Federal District
Court for the District of Oregon to decide. Claims by any other Notice Recipient that the matter(s)
submitted are not subject to binding arbitration under this Settlement Agreement will be resolved as
provided in item (i) of section 2.3 of Exhibit E. Any Notice Recipient that fails to respond, within
30 days of receiving a Dispute Notice, indicating its intent to contest the arbitrability of the matter(s)
identified Dispute Notice will, for purposes of this Settlement Agreement, be deemed to have made
a binding admission that the matter(s) identified in the Dispute Notice are subject to binding
arbitration under this Settlement Agreement.
9.3.2 Bindin!! Arbitration Policv Not Alllllicable: Administrative Disllute
Resolution Act Not Followed. BPA will not apply BPA's Binding Arbitration Policy or follow the
Administrative Dispute Resolution Act for disputes subject to binding arbitration under this section
9.3.
9.4 Disoute Resolution Process for Disoutes ArisinJl: Under Section 3.3.6 When
Le!!islation Is Not in Effect and BP A Is Not a Particioant. The provisions of this section 9.4 wiU
govern disputes:
IIPB-12322
29
(i) between or among COU Parties and IOUs,
(ii) within the scope of section 3.3.6,
(iii) that arise in any period during which legislation as contemplated by section 8 is not
in effect, and
(iv) with respect to which BP A has stated, in its statement in accordance with
section 9.2.3, that it will not engage in binding arbitration, and therefore is not a
Participant in such arbitration.
9.4.1 Binding Arbitration Within the Scope of Section 3.3.6. If (i) BPA's
statement in accordance with section 9.2.3 states that BP A will not engage in binding arbitration
with respect to the matter(s) identified in the Dispute Notice, and (ii) the Dispute Notice states one
or more claims within the scope of section 3.3.6, then such claims will be resolved by binding
arbitration in accordance with Exhibit E and the following additional provisions:
(a) the scope of permitted claims under this section 9.4 will be as set forth in
section 9.4.2;
(b) BPA's rights and obligations with respect to the arbitration will be as set forth
in section 9.4.3;
(c) any COU Party and any IOU, as applicable, will be entitled to the absolute
defenses set forth in section 9.4.4;
(d) the Arbitrator's power to grant remedies will be as set forth in section 9.4.5;
and
(e) the Parties' obligations with respect to implementing the remedies
determined by the Arbitrator will be as set forth in section 9.4.6.
Claims by any Notice Recipient (not including BP A) that the matter(s) submitted are not subject to
binding arbitration under this section 9.4 will be resolved as provided in section 2.3 of Exhibit E.
Any Notice Recipient (including a COU Party or IOU) that fails to respond, within 30 days of
receiving a Dispute Notice, indicating its intent to contest the arbitrability of the matter(s) identified
in the Dispute Notice will, for purposes of this Settlement Agreement, be deemed to have made a
binding admission that the matter(s) identified in the.Dispute Notice are subject to binding_.
arbitration under this Settlement Agreement.
,
9.4.2 Limitations on Parties' Rights to Make Claims Under Section 3.3.6.
(i) No Party other than an IOU may make a claim based on section 3.3.6(i), and
any such claim may be made only against one or more COU Parties.
(ii) No Party other than a COU Party may make a claim based on section
3.3.6(ii), and any such claim may be made only against one or more IOUs.
(iii) No Party other than an IOU may make a claim based on section 3.3.6(iii),
and any such claim may be made only against one or more other IOUs.
l1PB-12322 30
9.4.3 .BPA Ricltts and Oblieations With ResDect to an Arbitration Conducted
Pursuant to Section 9.4. .
(i) Except as otherwise provided iri this section 9.4.3, BPA will not participate in
any arbitration conducted pursuant to this section 9.4. Accordingly, BPA
will not be bound by or otherwise subject to the outcome of the arbitration
beyond BPA's responsibility to adjust Participants' bills in accordance with
the Arbitrator's decision pursuant to section 9.4.6.
(ii) In any arbitration conducted pursuant to this section 9.4, the Arbitrator may
request from BP A (a) relevant information in BP A's possession or control,
and (b) testimony from BPA witnesses with knowledge relevant to the
dispute. Based on his or her consistently applied determinations in such
arbitration as to whether the requested information or testimony is relevant,
not unduly burdensome, not commercially sensitive, and not subject to
privilege or other restrictions on disclosure, the General Counsel ofBPA will
determine whether to grant or deny such requests in whole or in part.
Requests for testimony from a specific BP A witness are subject to approval
by the General Counsel of BP A and must be accompanied by a summary of
the testimony desired. In any arbitration in which a BP A witness is made
available to a Participant or the Arbitrator, counsel from BP A may
participate in such arbitration to defend and represent such witness.
(iii) Any information provided by BP A or BP A witnesses solely in an arbitration
conducted pursuant to this section 9.4 will be used only in such arbitration,
and will not be used or cited in any other proceeding.
9.4.4 Absolute Defenses With Respect to Claims Subiect to Arbitration Under
Section 9.4. In any arbitration initiated in accordance with section 9.4:
(i) All COU Parties will have an absolute defense to any claim by any IOU
based on section 3.3.6(i) if the amounts included in the COU Parties' Tier 1
PF Rates to recover the cost of REP Settlement Benefits are at least equal to
the COU Parties' Allocated Sh~re as provided in this Settlement Agreement.
(ii) All IOUs will have an absolute defense to any claim by. any COU Party
based on section 3.3.6(ii) if the REP Settlement Benefits received by the
10Us, in aggregate, are in accordance with this Settlement Agreement;
provided, however, that the preclusion of any COU Party claim under
section 3.3.6(ii) will not be deemed to preclude claims by one or more IOUs
against one or more other IOUs based on allegations of breach of section
3.3.6(iii).
(iii) Any individual IOU will have an absolute defense to a claim by any COU
Party based on section 3.3.6(ii), and to any claim by any other IOU based on
allegations of breach of section 3.3.6(iii), if the REP Settlement Benefits
received by such IOU are in accordance with this Settlement Agreement.
9.4.5 Limitation on Arbitrator's Power to Grant Remedies for Breach of Section.
3.3.6. In any arbitration conducted pursuant to section 9.4, if the Arbitrator determines that there
has been a breach of one or more of the obligations under section 3.3.6, the Arbitrator's powers to
IIPB-12322
31
grant remedies will be subject to the limitations set forth in Exhibit E and will be further limited as
follows:
(i) For breach of section 3.3.6(i), the sole remedy will be a requirement for
prospective adjustments to COU Parties' bills to recover amounts that should
have been included in the COU Parties' Tier I PF Rates to recover REP
Settlement Benefits, together with corresponding increases to the prospective
payments to the IOUs, such that the COU Parties and the IOUs will be
restored to the positions they would have been in had section 3.3.6(i) been
performed according to its terms.
(ii) For breach of section 3.3.6(ii), the sole remedy will be a requirement for
prospective adjustments to 10Us' payments of REP Settlement Benefits (or,
if after the Payment Period, REP benefits) to recover amounts that should
not have been included in the IOUs' REP Settlement Benefits, together with
corresponding credits to the COU Parties' power bills, such that the COU
Parties and the IOUs will be restored to the positions they would have been
in had section 3.3.6(ii) been performed according to its terms.
(iii) For breach of section 3.3.6(iii), the sole remedy will be a requirement for
prospective adjustments to IOUs' payments of REP Settlement Benefits (or,
if after the Payment Period, REP benefits) to cause the amounts received by
each of the IOUs to be consistent with section 6.
(iv) In determining remedies in accordance with this section 9.4.5, the Arbitrator
will require adjustments to be made over a time period comparable to the
time period during which the over- or under-payment determined by the
Arbitrator occurred and, with respect to the COU Parties, any adjustments to
their power bills must be proportionate to their contributions to the under- or
over-payment.
(v) The Arbitrator will have no authority to require any Participant to remit to
any other Participant a cash payment to remedy a breach of section 3.3.6.
(vi) The Arbitrator will have no authority to provide a remedy that is binding on
BP A or any entity that is neither a Party nor a Participant; provided,
however, that the foregoing limitation on the Arbitrator's authority does not
limit or modify BPA's obligations under section 9.4.6(iii).
9.4.6 Parties' Actions to ImDIement the Arbitrator's Determination.
(i)
By its execution of this Settlement Agreement, each IOU and each COU
Party agrees, as of the Effective Date, that such execution constitutes a
continuing and irrevocable request to BP A to make any adJustments to its
power bills or payments (as applicable) as may be required to implement an
Arbitrator's determination pursuant to this section 9.4.
(ii)
For Participants that are not Parties to this Settlement Agreement,
participation in an arbitration will constitute a continuing and irrevocable
request to BP A to make any adjustments to its power bills or payments (as
applicable) as may be required to implement the Arbitrator's determination
with respect to such arbitration as provided in this section 9.4.
llPB-12322
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(iii) BP A agrees that it will make any and all such adjustments in accordance
with the Parties' or Participants' requests under this section 9.4.6; provided,
however, that
(a) BP A will make such adjustments only to the extent BP A concludes
that the billing adjustments will not affect any Notice Recipient that
is neither a Party nor a Participant;
(b) BPA will provide credits on power bills in accordance with this
section 9.4.6 only to the extent BP A has first received payment from
the Parties or Participants required by an Arbitrator's determination
pursuant to this section 9.4 to make such payments; and
(c) BPA's obligation to implement the Arbitrator's order will be limited
to the billing adjustments identified in this section 9.4.6 and BP A will
have no obligation to collect from or pay Notice Recipients that cease
to be BP A power customers.
Each Participant waives all rights to challenge BP A's implementation of
billing adjustments made consistent with the applicable Arbitrator's
determination pursuant to this section 9.4.
9.4.7 No Imolied Limitation. on Parties' Abilities to Pursue Other Claims.
Nothing in this section 9.4 will be deemed to limit any Party's ability to initiate disputes concerning
an alleged breach of this Settlement Agreement apart from or in addition to claims within the scope
of section 3.3.6.
10. PARTIES' ACTIONS WITH RESPECT TO LITIGATION: COURT
DETERMINATION OF UNENFoRCEABlLITY OF SETTLEMENT.
10.1 Preservation of Areoments in Litieation. Each Party that is a party to the
Litigation will work cooperatively with the other Parties to seek a stay or other procedural order that
preserves (until the later of (i) 91 days after the Effective Date, or (ii) any suit to challenge BPA's
execution of this Settlement Agreement has been finally decided or dismissed) all claims and
defenses in the Litigation regarding any claims sought to be satisfied or rendered moot as a result of
this Settlement Agreement. This Settlement Agreement is not intended to, and does not, affect any
claim or defense in the Litigation pertaining to service to any DSI or pertaining to the rates
applicable to any DSI. Upon the later of (a) 91 days after the Effective Date, or (b) the date on
which any court decision or legislative action finally affirms or authorizes BP A's execution or
implementation of this Settlement Agreement, each Party will work cooperatively with the other
Parties to seek to dismiss all claims and defenses that the Parties sought to have stayed or preserved
pursuant to this section 10.1.
10.2 Retention of Claims and Defenses as Aeainst Non-SettIine Entities. No claim
against any Non-Settling Entity will be deemed settled by this Settlement Agreement, and each of
the Parties retains any and all claims and defenses it has or may claim to have against any Non-
Settling Entity. Each Part)> agrees, however, that it will assert such claims, defenses, or rights only
in accordance with section 3.8.
10.3 Failure to Stav Litieation. With respect to any part of the Litigation that is not
stayed as described in section 10.1, any Party may, notwithstanding section 3.8, advance any
llPB-12322
33
argument in the Litigation, except that no Party may challenge BP A actions that implement this
Settlement Agreement consistent with its terms. Nothing in this section 10.3 will in any way modify
or limit the waivers set forth in section 7.
10.4 Exoedited Review ofChallenees to BPA's Execution of Settlement Aueement. If
any entity challenges in any court BP A's execution of, or authority to execute, this Settlement
Agreement, each Party will work cooperatively with the other Parties to have such challenge
resolved on an expedited basis.
10.5 Coooeration to Restore Benefits and Burdens of Settlement Aueement in the
Event of Court Order Disruotine Parties' Aueement. If a court with jurisdiction enters a final
order that finds BP A's execution of this Settlement Agreement to be invalid or unenforceable in any
material respect as to any Party, then each Party will use good faith efforts to work cooperatively
with the other Parties to develop mutually acceptable amendments to this Settlement Agreement
that conform with the requirements of such order and that restore the balance of benefits and
burdens contemplated in this Settlement Agreement. The provisions of this section 10.5 do not
apply to any court determination to the extent it is addressed by the provisions of section 3.6.
10.6 Inability to Restore Costs and Benefits. If a court with jurisdiction enters a final
order that finds BP A's execution of this Settlement Agreement to be invalid or unenforceable in any
material respect as to any Party and the Parties are, notwithstanding their good faith efforts, unable
to develop mutually acceptable amendments as described in section 10.5, then:
(i) the entire Settlement Agreement (with the exceptions of this section 10 and sections
11.1 and 11.2) and any REP Settlement Implementation Agreement, will be void ab
initio;
(ii) each Party will be entitled to assert all available claims and defenses as though the
Settlement Agreement were never entered into;
(iii) each PaTty will be entitled to challenge BP A's actions in response to such court
order, and no Party will assert or argue that any other Party's arguments are
prejudiced, limited, or waived by virtue of its having been a Party to this Settlement
Agreement;
(iv) notwithstanding items (ii) and (iii) above, each IOU will be entitled, for the period
between October I, 2011, and the time at which the Settlement Agreement is found
invalid or unenforceable, to benefits under section 5(,) of the Act as though (a) the
Settlement Agreement had never been entered into, and (b) such IOU had entered
into a RPSA with BP A for such period; and
(v) any recovery of underpayments or overpayments of benefits under section 5(c) of the
Act as compared to Total Settlement Benefits, or any adjustments to the allocation in
rates of the costs of such benefits, will be achieved through adjustments to
prospective benefits and rates only.
The provisions of this section 10.6 do not apply to any court determination to the extent it is
addressed by the provisions .of section 3.6.
10.7 Severability and Survival of Section 10. The proVIsions of this section 10 are
severable from the other provisions of this Settlement Agreement and will survive and remain in full
force and effect.
IlPB-12322
34
11. NO ADMISSION. PRECEDENTlAL OR EVIDENTIARY EFFECT: RESERVATION
OF RIGHTS
11.1 No Admission. This Settlement Agreement reflects the compromise of disputed
issues, claims, and defenses and does not constitute any Party's admission or concession with
respect to the merits of any such disputed issues, claims, or defenses.
11.2 No Precedential or Evidentiarv Effect. Neither this Settlement Agreement nor its
performance will (i) constitute any Party's agreement to any underlying principle or statutory
interpretation in any context, (ii) constitute any Party's agreement to any methodology other than
for purposes of implementing this Settlement Agreement in accordance with its terms for the
Payment Period, or (iii) serve as procedural or substantive precedent regarding any matter in any
context other than BPA proceedings to implement the terms of this Settlement Agreement.
11.3 Status of BP A IntelDretation and Methodo10eies Uoon Exoiration of Settlement
Aueement. Before the start of the Fiscal Year 2029, BPA will conduct a proceeding and issue a
record of decision to determine, for the period starting with Fiscal Year 2029, whether, and if so,
how, to modify or replace its legal interpretation of, and methodology for implementing, sections
7(b)(2) and 7(b)(3) of the Act. Each Party retains its rights to seek judicial review of BPA's actions
and determinations in such proceeding. No Party will assert that any other Party is precluded, as a
result of performance of this Settlement Agreement, from seeking judicial review of such actions and
determinations.
12. REPRESENTATIONS
Each Party makes the following representations and warranties, for itself only, to each other
Party:
12.1 Authoritv to Execute. The execution, delivery, and performance of this Settlement
Agreement (i) are within its powers, (ii) have been duly authorized by all necessary action on its
behalf and all necessary consents or approvals (including any necessary regulatory consents or
approvals) have been obtained and are in full force and effect, and (iii) do not violate any of the
terms and conditions of any applicable law or materially violate any contracts to which it is a party.
12.2 Bindine Obligation. This Settlement Agreement constitutes a legal, valid, and
binding obligation, enforceable against it in accordance with its terms.
13. MISCELLANEOUS
13.1 Notices: Ricltt to Notice of Disontes and Amendments.
13.1.1 Manner of Notices. All notices, requests or other communications
required under this Settlement Agreement must be in writing and, will be deemed "given":
(i) if delivered in person or by courier, upon receipt by the intended recipient or upon the
date of delivery (as confirmed by, if delivered by courier, the records of such courier), (ii) if
sent by facsimile transmission, when the sender receives confirmation from the sending
facsimile machine that such facsimile transmission was transmitted to the facsimile
number of the addressee, (iii) if mailed, upon the date of delivery as shown by the return
receipt therefore, (iv) if delivered by a nationally recognized mail delivery service, upon the
date of delivery; or (v) if delivered electronically. Notices must be sent to the addresses compiled
by BPA and posted on BPA's website at httn:/ /www.bna.gov/cornorate/financel ascmlindex.cfm.
IlPB-12322
35
Promptly following the Effective Date, BP A will post on its website at such address (a) a listing of all
other Parties' contact information as specified in their respective Regional Dialogue Contracts,
which will serve as such Parties' initial contact information under this Settlement Agreement, and
(b) an address for notices to BPA. Each Party will notify BPA of changes to its contact information
for notices under this Settlement Agreement. BP A will update the posted contact information
accordingly, and will give all Parties not less than 30 day's prior written notice ifBPA proposes to
change the URL specified in this section 13.1.1.
13.1.2 Parties' Ricltts to Notices of Amendments to REP Settlement
Imolementation Aereements. BPA will, prior to entering into any amendment of any REP
Settlement Implementation Agreement, deliver a copy of the proposal to enter into such proposed
amendment (which may be delivered by electronic means) to all Parties. Any Party that considers
that the proposed amendment of such REP Settlement Implementation Agreement would be
inconsistent with this Settlement Agre~ment may, within 30 days of receiving such notice,
(i) respond in writing to BP A and the counter-party to such REP Settlement Implementation
Agreement, indicating that such Party considers that the proposed amendment of the REP
Settlement Implementation Agreemcnt would be inconsistent with this Settlement Agreement,
and (ii) pursue any rights such Party may have to dispute resolution pursuant to section 9
with respect to such proposed amendment.
13.1.3 Parties' Ricltts to Notices of Disputes Arisine Under REP Settlement
Imolementation Aereements. If BP A receives or gives written notice of a dispute to be resolved
through binding arbitration in accordance with section 15 of any REP Settlement Implementation
Agreement, BP A will promptly deliver a copy of such written notice (which may be delivered by
electronic means) to all Parties. Any Party that considers the dispute to involve a potential breach of
the Settlement Agreement may, within 30 days of receiving such notice, (i) respond in writing to
each of BP A and the counter-party to such REP Settlement Implementation Agreement, indicating
that such Party considers such dispute to involve a potential breach of this Settlement
Agreement, and (ii) pursue any rights that such Party may have to dispute resolution
pursuant to section 9 with respect to such dispute. Any Party that fails to respond, within 30
days of receiving such notice, indicating that it considers the dispute to involve a potential
breach of this Settlement Agreement will, for purposes of this Settlement Agreement, be deemed
to have made a binding admission that the dispute does not involve a breach of this Settlement
Agreement.
13.2 Entire Aereement. This Settlement Agreement, together with its exhibits, contains
the entire agreement among the Parties with respect to the subject matter hereof and there are no
agreements, understandings, representations, or warranties among the Parties with respect to the
subject matter hereof other than those set forth or referred to herein.
13.3 Limitations of Liabilitv. NO PARTY WILL BE LIABLE TO ANY OTHER
PARTY FOR ANY INDIRECT DAMAGES, CONSEQUENTIAL DAMAGES, PUNITIVE
DAMAGES, LOST PROFITS, OR ANY OTHER LOSS OF EARNINGS OR REVENUES
THAT MAY OCCUR OR RESULT FROM ANY PARTY'S PERFORMANCE OR NON-
PERFORMANCE OF THIS SETTLEMENT AGREEMENT, INCLUDING AS A RESULT OF
NEGLIGENCE. ANY AWARD OF DAMAGES AGAINST BPA MUST BE CONSISTENT
WITH FEDERAL LAW.
13.4 Successors and Assims. This Settlement Agreement will be binding upon and inure
to the benefit of the Parties and their permitted respective successors and assigns.
llPB-12322
36
13.5 Amendments. This Settlement Agreement may not be amended or otherwise
modified except in a writing signed by each of the Parties. No REP Settlement Implementation
Agreement may be amended to be inconsistent with this Settlement Agreement and each such REP
Settlement Implementation Agreement is binding only on the signatories thereto.
13.6 Assh'llrnent. No Party may assign this Settlement Agreement or its rights hereunder
without the prior written consent of the other Parties, which consent will not be unreasonably
withheld or delayed; provided, however, that any Party may, without the consent of the other
Parties (and without relieving itself from obligation or liability hereunder), transfer or assign this
Settlement Agreement to any person or entity succeeding to all or substantially all of the assets of
such Party, provided the assignee agrees in writing to be bound by the terms and conditions set forth
in this Settlement Agreement.
13.7 Ambieoities Nentrallv Construed. This Settlement Agreement is the result of
negotiations among, and has been reviewed by, each Party and its respective counsel. Accordingly,
this Settlement Agreement will be deemed to be the product of each Party, and no ambiguity will be
construed in favor of or against any Party.
13.8 No Third-Party Beneficiaries. This Settlement Agreement does not confer upon
any Non-Settling Entity any rights or remedies under this Settlement Agreement, and no Non-
Settling Entity is entitled to rely on any representation, warranty, covenant, release, waIver or
agreement contained in this Settlement Agreement. .
13.9 No Joint and Several Liabilitv. Nothing in this Settlement Agreement will be
deemed to create any joint and several liability among any of the Parties.
13.10 Governine Law. This Settlement Agreement will be interpreted consistent with and
governed by federal law.
13.11 Conflicts. If any proVISIOn in this Settlement Agreement conflicts with any
provision in any REP Settlement Implementation Agreement, the provision in this Settlement
Agreement will control.
13.12 Provisions That Snrvive Exoiration. Apart from those provisions that specifically
state that they will survive early termination of this Settlement Agree~ent,
(i) the rights and obligations of the Parties under sections 7.4, 7.5, 7.7, 7.8, 9,11,13.8,
13.9, 13.12, and 14,
(ii) any other provisions of this Settlement Agreement that by their nature are intended
to survive expiration, and
(iii) claims accrued under, but not fully satisfied during the term of, this Settlement
Agreement
will survive the expiration of this Settlement Agreement or termination of this Settlement Agreement
pursuant to section 14.4.
13.13 Section Headinl!s: Recitals: Meaning of "Inclndes." The section headings and
recitals in this Settlement Agreement are for convenience only and will not be considered part of, or
used in the interpretation of, this Settlement Agreement, except that any term dermed in the recitals
will have the meaning given there. The words "include," "includes," and "including" mean
IlPB-12322
37
including without limitation. References in the body of this Settlement Agreement to a "section"
will be deemed to refer to a section in the body of this Settlement Agreement unless the reference
specifically states otherwise.
14. PARTIES' RIGHTS AND OBLIGATIONS RELATED TO OUALIFYING
CONDITIONS.
14.1 Additional Definitions for Purooses of this Section 14. Capitalized terms used in
this section 14 and set forth below will have the meanings set forth in this Section 14.1.
(i) "Adjusted Average PF Rate" means (expressed in dollars per megawatt-hour), for
each Rate Period,
(a) the average of the Priority Firm Rates for such Rate Period, which average
will be determined by dividing the sum of the forecasted revenues from all
such Priority Firm Rates for such Rate Period by the forecasted loads for
such Priority Firm Rates, all as determined in the Rate Proceeding for such
Rate Period; plus
(b) the effective rates (expressed in dollars per megawatt-hour) for such Rate
Period applicable for wheeling power from BP A to the PF Customers, as
determined in the applicable BP A proceeding to set transmission rates; less
(c) the quotient (expressed in dollars per megawatt-hour) of (I) if and to the
extent not reflected as a reduction in revenue requirements for the Priority
Firm Rates for such Rate Period, any value for such Rate Period received by
any PF Customer in connection with or as a result of the purchase of power
from BPA at Priority Firm Rates (excluding the value of (A) the power itself,
(B) any Current Tier 1 RECs (as that term is defined in Exhibit C), and
(C) any Tier 2 RECS (as that term is defined in Exhibit C) that are shown to
be used or held by a COU to comply with renewable portfolio standards or
comparable laws or regulations), divided by (2) the sum of the forecasted
loads to be served at such Priority Firm Rates for such Rate Period, all as
BP A will determine in the Rate Proceeding for such Rate Period.
For the avoidance of doubt, Adjusted Average PF Rate excludes the effect of any adjustment
based on costs or credits not reflected in the rates as adopted in BP A's final record of
decision issued in the Rate Proceeding for the applicable Rate Period.
(ii)
"Affected PF Customer" means (a) any COU Party, and (b) any other COU that, at
the time of a vote taken to determine whether to authorize notice pursuant to
section l4.2(i), is purchasing firm power from BPA for service to meet its general
requirements at rates set in the same manner provided for COU Parties pursuant to
sections 3.3 and 3.4.
(iii)
"Priority Firm Rates" means for any Rate Period the rates charged by BP A to PF
Customers for such Rate Period for service to meet such PF Customers' "general
requirements" (as defined in section 7(b)(4) of the Act and specifically excluding any
priority firm exchange rate), or any successor rates for PF Customers.
(iv)
"Material Cost Change" means and will occur if and at such time as the BP A
Administrator adopts Priority Firm Rates for a Rate Period that result in an Adjusted
I1PB-12322
38
Average PF Rate for such Rate Period that is greater than 79% of the arithmetic
load-weighted average of the ASCs (adjusted to not give effect to the waivers set
forth in section 6.4) of the IOUs. Such load-weighted average.will be determined by
averaging the ASCs (adjusted to not give effect to the waivers set forth in section 6.4)
of the IOUs for such Rate Period weighted by the respective Residential Loads of the
IOUs for such Rate Period, all as BPA will determine in the Rate Proceeding for
such Rate Period. The ASC for any Rate Period of any IOU that does not file for
such Rate Period an Appendix I as provided in section 4 of its REP Settlement
Implementation Agreement will be determined for purposes only of this section 14
by BPA using the applicable FERC Form Is and other publicly available
information.
(v) "Qualifying Conditions" means and will occur if and at such time as both
(a) a Requirement Change has occurred, and
(b) a Material Cost Change for a Rate Period has occurred and such
Requirement Change has not been repealed or rescinded as of the
commencement of the Rate Period for which such Material Cost Change has
occurred.
(vi) "Requirement Change" means any change to or enactment of law, regulation,
legislative resolution, executive order or other authority or directive pursuant to
which (a) BP A establishes the COU Parties' PF Rates other than on the basis of the
embedded costs and credits of the Federal Columbia River Power System (as the
term "Federal Columbia River Power System" is used in the Act) and any other
embedded costs and credits in accordance with sections 7(b) and 7(g) of the Act (as
in effect on the Effective Date), or (b) there is a material acceleration of BPA's
obligation to amortize federal investment in the Federal Columbia River Power
;
System. For purposes of this Settlement Agreement, each of the following
specifically. will not constitute a change or enactment within the meaning of the first
sentence of this section (vi):
(I)
any discretionary action of the BP A Administrator if the BP A
Administrator could have taken such discretionary action irrespective
of the change or enactment within the meaning of the first sentence of
this section (vi);
(2)
the inclusion in COU Parties' PF. Rates of any charges (such as
capacity charges) not based on embedded costs, if the inclusion of
such charges does not change BP A's total revenue requirements for
Priority Firm Rates;
(3)
any provision of law, regulation, legislative resolution, executive
order or other authority or directive that is not limited in its
application to BP A or to BP A and any other Federal power
marketing agency (as defined in 16 USC ~ 796(19), provided that for
purposes of this subparagraph (3) of item (vi) of section 14.1, the
Tennessee Valley Authority will be deemed to be included in the
definition of "Federal power marketing agency"); and
IlPB-12322
39
(4) any charges, fees, assessments, or other costs (including taxes)
generally applicable to or imposed generally on electric utilities,
wholesale suppliers of electric power, or the generation of electric
power.
Each Party acknowledges and agrees that (A) no law, regulation, legislative resolution,
executive order or other authority or directive as in effect as of February 15, 2011, would
constitute a Requirement Change and (B) any provision of legislation adopted by Congress
as contemplated by section 8 of this Settlement Agreement would not constitute a
Requirement Change.
14.2 Notice of Oualifvine Conditions. If Qualifying Conditions occur, or will occur as
of the start of an upcoming Rate Period and either
(i) the requisite proportion of Affected PF Customers (as determined in accordance with
the following sentence), or
(ii) two-thirds of the IOUs (utility count)
deliver written notice (which may be delivered by electronic means) to all other Parties that
the Qualifying Conditions have occurred, then the Parties' rights and obligations under this
Settlement Agreement will be as set forth in sections 14.3, 14.4 and 14.5. Written notice
may be delivered pursuant to item (i) of this section 14.2 only if authorized by the affirmative
votes of Affected PF Customers totaling both (a) at least two-thirds of the Affected PF
Customers (utility count), and (b) at least two-thirds the sum of the TOCAs of all Affected
PF Customers, with both of the foregoing measured by the individual vote of each Affected
PF Customer. Any notice given pursuant to this section 14.2 must be given after the
issuance of the Record of Decision adopting the Priority Firm Rates for the Rate Period for
which the applicable Material Cost Change has occurred and must be given on or prior to
the expiration of60 days after the issuance of such Record of Decision. For the avoidance of
doubt and without limiting the generality of section 13.8, it is specifically agreed that the
provisions of this section 14.2 that permit voting by COUs that are Non-Settling Entities are
solely for the purposes of such vote and no other purpose, are made and entered into for the
sole benefit of Parties, and do not make any such COUs or any other Non-Settling Entities
third-party beneficiaries of section 14.2 or any other provision of this Settlement Agreement.
<>
J
14.3 Disoutes Reeardine the Existence of Oualifvine Couditions. If, within 30 days
following delivery of notice pursuant to section 14.2, any Party disputes the existence of Qualifying
Conditions (which may (i) be on the basis of an allegation that one or both of a Requirement Change
and a Material Cost Change have not occurred, and (ii) include disputes concerning any calculations
related to the existence of a Material Cost Change) and gives notice (which may be delivered by
electronic means) to all other Parties of such dispute, the dispute will be resolved by binding
arbitration between the IOUs and the COU Parties in accordance with Section 9 and Exhibit E.
14.4 Termination of Settlement Aereement. .If Qualifying Conditions have occurred and
a timely notice thereof has been given pursuant to section 14.2, this Settlement Agreement will
terminate as of the commencement of the Rate Period for which the applicable Material Cost
Change has occurred unless the issue of the existence of such Qualifying Conditions is arbitrated
pursuant to section 14.3, in which case this Settlement Agreement will terminate retroactively as of
the commencement of the Rate Period for which the applicable Material Cost Change has occurred
if it is determined through such arbitration that the Qualifying Conditions for which the notice was
] lPB-12322
40
given have occurred. During the pendency of any such arbitration, the Parties will continue
performance of this Settlement Agreement until any such arbitration is concluded.
(i) Upon any termination of this Settlement Agreement pursuant to this section 14.4,
then concurrently with such termination, (a) the term "Payment Period" will be
deemed to mean, from and after the Effective Date, "the period beginning on
October ], 2011, and continuing until the time as of which this Settlement
Agreement is terminated pursuant to section 14.4"; and (b) the term "Settlement
Period" will be deemed to mean, from and after the Effective Date, "the period
beginning on October 1, 2001, and continuing until the time as of which this
Settlement Agreement is terminated pursuant to section 14.4."
(ii) If this Settlement Agreement terminates retroactively pursuant to this section 14.4, a
true-up will be performed for the period beginning with commencement of the Rate
Period for which the applicable Material Cost Change has occurred and continuing
until the conclusion of such arbitration. Pursuant to such true-up
(a) each IOU will be entitled, for the period beginning with commencement of
the Rate Period for which the applicable Material Cost Change has occurred
and continuing until the conclusion of such arbitration, to benefits, if any,
under section 5(c) of the Act (as then in effect) as though (I) this Settlement
Agreement had been terminated as of such commencement and (2) such
IOU had entered into a RPSA with BPA for the period beginning with
commencement of the Rate Period for which the applicable Material Cost
Change has occurred and continuing until the conclusion of such arbitration;
and
(b) any recovery of underpayments or overpayments of benefits under section
5(c) of the Act (as then in effect) as compared to the REP Settlement Benefits
received by such IOU for the period beginning with the commencement of
the Rate Period for which the applicable Material Cost Change has occurred
beginning with commencement of the Rate Period for which the applicable
Material Cost Change has occurred and continuing until the conclusion of
such arbitration, will be achieved through adjustments to prospective benefits
only; provided, that any remaining balance of underpayment or overpayment
to any IOU remaining as of September 30, 2028 will be extinguished, and no
further adjustment for any such remaining balance of underpayment or
overpayment to any IOU will be required to be made after September 30,
2028.
For the avoidance of doubt, it is specifically agreed that any remedy arising out of any arbitration
pursuant to section 14.3 or otherwise regarding this section 14 for overpayments to any 10Us will be
limited to prospective adjustments consistent with section 1 1.3 of Exhibit E and consistent with the
foregoing proviso.
14.5 No Claims or Damues Resulting from Termination Under Section 14:
Prosoective IOU Benefits Under Section SIc). If this Settlement Agreement is terminated pursuant
to section 14.4, no Party will be entitled to seek or receive, and each Party waives any right to seek
or receive, any damages or restitution of any nature, in law or equity, from any other Party with
respect to any and all payments, benefits and value paid or received by any Party in accordance with
IIPB-12322
4]
this Settlement Agreement before the date as of which this Settlement Agreement is terminated
pursuant to section 14.4. For the avoidance of doubt,
(a) the satisfaction, discharge and extinguishment of any and all obligations, claims, and
liabilities in accordance with sections 7.4, 7.7, and 7.8,
(b) any and all waivers given pursuant to sections 7:7 and 7.8, and
(c) any and all rights, claims, and defenses pursuant to section 7.5
will survive and remain in full force and effect notwithstanding termination of this Settlement
Agreement pursuant to section 14.4, and, notwithstanding the waivers given pursuant to sections 7.3
and 7.4, each IOU will be entitled, for the period after termination of this Settlement Agreement, to
benefits, if any, as provided in section 5(c) of the Act as then in effect.
,
14.6 No Waiver of Ricltts. Nothing in this section 14 is intended to be, or will be
construed as, a waiver of any right held by any Party to contest the lawfulness or the applicability of
any potential Requirement Change. Specifically, nothing in this section 14 will limit any COU
Party's right to assert that a Requirement Change (or potential Requirement Change, if enacted), is
or would be a breach or violation of the TRM, such COU Party's CHWM Contract, or any other
rate methodology or agreement pursuant to which the COU Party purchases power tram BP A
during the Payment Period.
15.
SIGNATURES
I
Each signatory represents that he or she is authorized to enter into this Settlement
Agreement on behalf of the Party for whom he or she signs. For the convenience of the Parties, this
Settlement Agreement may be executed in any number of counterparts, each such counterpart being
deemed to be an original instrument, and all such counterparts together constituting the same
agreement. If the Administrator executes this Settlement Agreement pursuant to section 1.4 above,
BPA will promptly deliver to each Party a conformed copy of this Settlement Agreement.
[SIGNATURES TO FOLLOW ON SEPARATE PAGES]
IIPB-12322
42
FULL NAME OF PARTY
By \A~~ ~~~lJ(J
Title * AJM~Y"
Name Y"
(Print/Typ)
Date ~( (p ,a.OI!
]] PB-] 2322
43
~
Exhibit A
Form ofREP Settlement Implementation Agreement
REP SETTLEMENT
IMPLEMENTATION AGREEMENT
PRODUCTION TEMPLATE
Contract No. ,<#!I"PB-,<#####"
DRAFT 01/14/2011
RESIDENTIAL EXCHANGE PROGRAM SETTLEMENT IMPLEMENTATION
AGREEMENT
executed by tbe
BONNEVILLE POWER ADMINISTRATION
and
<<FULL NAME OF CUSTOMER>>
Table of Contents
Section
I.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Page
Term .............................................................................................................
Defi n ition s ......................................................... ....................... ...... ...... .......
Utility-Specific Exchange Rate ...............................................................
Establishment of ASC to Activate Participation .................................
Offer by <<Customer Name>> and Purchase by BPA .............................
Offer by BPA and Purchase by <<Customer Name>> ..............................
In-Lieu Transactions .................................................................................
Invoicing, Billing, and Payment .............................................................
Accounting, Review, and Budgeting ......................................................
Pass-Through of Benefits .........................................................................
Suspension of This Agreement ................................................................
Termination of Previous RPSA ...............................................................
Notices and Contact Information............................................................
Uncontrollable Forces ..............................................................................
Governing Law and Dispute Resolution ...............................................
Statutory Provisions .................................................................................
Standard Provisions .................................................................................
Notice Provided to Residential and Small Farm Consumers ...........
Information Exchange and Confidentiality..........................................
Signatures ...................................................................................................
Exhibit A
Exhibit B
Qualifying Residential And Small Farm Load Definition
Average System Cost Methodology
Exhibit C
Terms and Conditions of Final Agreed-Upon Procedures
Report
Agreed-Upon Procedures
CF/CT and New Large Single Loads
Exhibit D
Exhibit E
This RESIDENTIAL EXCHANGE PROGRAM SETTLEMENT IMPLEMENTATION
AGREEMENT (Agreement) is executed by the UNITED STATES OF AMERICA,
Department of Energy, acting by and through the BONNEVILLE POWER
ADMINISTRATION (BPA), and "FULL NAME OF CUSTOMER)) ("Customer Name))),
hereinafter individually referred to as "Party" and eolleetive1y referred to as the "Parties."
"Customer Name)) is a" )) organized and authorized under the laws of the State
of" )) to purchase and distribute electric power to serve retail consumers from its
distribution system within its service area.
RECITALS
Section 5(e) of the Northwest Power Act provides that a Pacific Northwest Regional
electric utility may offer to sell electric power to BP A, and BP A shall purchase such electric
power at the Average System Cost of I. hat utility's resources, and in exchange BPA shall
offer to sell in return an equivalent amount of electric power to such utility, and such utility
shall purchase such electric power at an exchange rate. The cost benefits of such purchase
and exchange sale attributable to a utility's residential load within a state shall be passed
directly through to that utility's residentia110ad within such state. This program is
referred to as the Residential Exchange Program ("REP").
BP A's implementation of the REP has been and continues to be a source of
significant controversy. BPA's customers have filed numerous lawsuits challenging BPA's
REP-re1ated decisions, several of which are currently pending before the U.S. Court of
Appeals for the Ninth Circuit. In an effort to resolve these challenges, BP A and interested
parties engaged in mediation over BPA's implementation of the REP. BPA and certain
other parties have now agreed to a settlement with respect to such litigation by agreeing to
the terms of the Residential Exchange Program Settlement Agreement (as such agreement
may from time to time be amended, "Settlement Agreement"), Contract No. II ]], dated as of
This Agreement implements provisions of the Settlement Agreement regarding
payment of benefits to "Customer Name)). This Agreement is intended to be part of I. he
Settlement Agreement and is therefore neither severable nor independent from the duties
and obligations of the Parties set forth in the Settlement Agreement.
The Parties agree:
I. TERM
This Agreement is being entered into contemporaneously with BP A's execution of
the Settlement Agreement and shall take effect on the later of
<d/#))PB-,dI####))
2
(I) the date signed by the Parties, or
(2) if applicable, the effective date specified by the Federal Energy Regulatory
Commission in its acceptance for filing of this Agreement, provided the
Federal Energy Regulatory Commission has not conditioned acceptance upon
any change or condition unacceptable to either Party, and it shall continue
through and terminate on September 30, 2028.
Performance by the Parties of their obligations under this Agreement shall
commence on October 1, 2011. Upon termination of this Agreement, all obligations
incurred her.eunder shall be preserved until satisfied. If the Settlement Agreement
becomes void ab initio in accordance with its terms, this Agreement shall also be void ab
initio.
2. DEFINITIONS
Capitalized terms below in this section shall have the meaning stated. Capitalized
terms that are not listed below in this section are either defined within the section
or exhibit in which they are used or, if not so defined, shall have the meaning stated
in the Settlement Agreement, or, if not so defined, shall have the meaning stated in
BP A's applicable Wholesale Power Rate Schedules, including the General Rate
Schedule Provisions (GRSPs), or the ASC Methodology.
2.1 "Appendix 1" means the electronic form on which <<Customer Name>> reports
its Contract System Costs and other necessary data to BP A for the
calculation of <<Customer Name>>'s Base Period and Exchange Period ASCs
pursuant to the ASC Methodology.
2.2 "Average System Cost" or "ASC" has the meaning given such term in the
Settlement Agreement.
2.3 "ASC Methodology" means the methodology, as may be amended or
superseded, used to determine ASC, as developed by BP A pursuant to
section 5(e)(7) of the Northwest Power Act. Exhibit B contains a website link
to the current version of the ASC Methodology. This Agreement is subject to
the ASC Methodology, but such ASC Methodology is not incorporated as part
of this Agreement.
2.4 "Base Period" means the calendar year of the most recent Federal Energy
Regulatory Commission Form 1 data at the commencement of the ASC
review period. .
2.5 "Base Period ASC" means the ASC determined in the Review Period using
<<Customer Name>>'s Base Period data, all in accordance with the ASC
Methodology.
2.6 "Business Day(s)" means every Monday through Friday except Federal
holidays.
((##nPB-<<#####))
3
2.7 "Contract System Costs" means <<Customer Name))'s costs for production and
transmission resources, including power purchases and conservation
measures, which costs are includable in and subject to the provisions of
Appendix 1, all in accordance with the ASC Methodology as then in effect,
and giving effect to the waivers set forth in section 6.4 of the Settlement
Agreement. Under no.cireumstanees shall Contract System Costs include
costs excluded from the ASC by section 5(e)(7) of the Northwest Power Act.
2.8 "Contract System Load" means the total Regional retai110ad included in the
Form 1, as may be adjusted pursuant to the ASC Methodology, all in
accordance with the ASC Methodology.
2.9 "Implementation Effective Date" means the date this Agreement takes effect,
.as determined pursuant to section 1 above.
2.10 "Exchange Period" means the period during the Payment Period for which
"Customer Name,,'s ASC is effective for the calculations with respect to such
ASC under this Agreement. Each Exchange Period shall be the period of
time concurrent with the duration of each Rate Period.
2.11 "Fiscal Year" or "FY" has the meaning given "Fiscal Year" in the Settlement
Agreement.
2.12 "Form 1" means the annual filing submitted to the Federal Energy
Regulatory Commission required by 18 CFR ~141.1, as specified in the ASC
Methodology.
2.13 "IOU-Specific REP Settlement Benefit Amount" has the meaning given such
term in the Settlement Agreement.
2.14 "In-Lieu Power" means electric power acquired by BPA from a source(s) other
than "Customer Name" at a cost less than "Customer Name,>'s ASC, as
provided in section 5(e)(5) of the Northwest Power Act.
2.15 "Jurisdiction" means the service territory of "Customer Name>> within which
a particular Regulatory Body has authority to approve "Customer Name>>'s
retail rates. Jurisdictions must be within the Region.
.
2.16 "New Large Single Load" or "NLSL" has the meaning specified in
section 3(13) of the Northwest Power Act and in BPA's NLSL Policy.
2.17 "Northwest Power Act" or "Act" means the Pacific Northwest Electric Power
Planning and Conservation Act, 16 U.S.C. ~839, Public Law No. 96-501, as
heretofore or hereafter amended.
2.18 "Payment Period" has the meaning given such term in the Settlement
Agreement.
<4t#))PB-(d/####n
4
2.19 "Qualifying Residential and Small Farm Load" means, with respect to any
IOU, residential load as defined in the Northwest Power Act and as further
defined in Exhibit A that such IOU is authorized under state law or by order
of the applicable state regulatory authority to serve.
2.20 "Rate Period" has the meaning given such term in the Settlement Agreement.
2.21 "Reference Rate" has the meaning given such term in the Settlement
Agreement.
2.22 "Region" or "Regional" means the Pacific Northwest as defined in
section 3(14) of the Northwest Power Act.
2.23 "Regulatory Body" means a state commission or consumer-owned utility
governing body, or other entity authorized to establish retail electric rates in
a Jurisdiction.
2.24 "REP Settlement Benefit" has the meaning given such term in the Settlement
Agreement.
2.25 "Residential Exchange Program" or "REP" means the program established by
section 5(e) of the Northwest Power Act.
2.26 "Residential Load" has the meaning given such term in the Settlement
Agreement.
2.27 "Review Period" means the period of time during which <<Customer Name>>'s
Appendix 1 is under review by BPA pursuant to the ASC Methodology.
2.28 "Settlement Agreement" has the meaning given such term in the recitals of
this Agreement.
2.29 "Uncontrollable Force" shall have the meaning specified in section 14.
2.30 "Utility-Specific Exchange Rate", means for any IOU each rate applicable to
such IOU BPA establishes in any Rate Proceeding to implement the
provisions of sections 3 and 6 of this Agreement and section 6 of the
Settlement Agreement.
2.31 "Agreed-Upon Procedures" means the specific tests and procedures outlined
in Exhibit D to be performed by <<Customer Name>>'s certified public
, accountant.
3. UTILITY-SPECIFIC EXCHANGE RATE
BP A will develop the Utility-Specific Exchange R,tes applicable to <<Customer
Name>> such that for each Fiscal Year the payments to be made by BPA under this
Agreement (i.e., the product of <<Customer Name>> 's Residential Load for such Fiscal
Year multiplied by the amount, if any, by which <<Customer Name>> 's ASC for such
Fiscal Year exceeds the Utility-Specific Exchange Rate applicable to <<Customer
f4/:#))PB-H#####"
5
Name)) for such Fiscal Year) are equal to the IOU-Specific REP Settlement Benefit
Amount for "Customer Name)) ealeu1ated for such Fiscal Year pursuant to section 6
of the Settlement Agreement. Purchases under this Agreement by "Customer
Name>> are pursuant to the Utility-Specific Exchange Rates applicable to "Customer
Name)).
4. ESTABLISHMENT OF ASC TO ACTIVATE PARTICIPATION
The first Exchange Period for which "Customer Name)) may activate its
participation under this Agreement shall commence on October 1, 2011. "Customer
Name>> may activate its participation under this Agreement by filing an initial
Appendix 1 for the initial Exchange Period that it has selected. Once "Customer
Name)) files an initial Appendix 1, "Customer Name)) shall continue to file a new
Appendix 1 as required by the ASC Methodology, unless and until "Customer Name))
elects to suspend this Agreement pursuant to section 11 below. Upon filing an
Appendix 1 for an Exchange Period, "Customer Name)) shall commence invoicing for
Residential Load, pursuant to section 8.1 below, in the month following the first full
month of such Exchange Period.
5. OFFER BY <<CUSTOMER NAME>> AND PURCHASE BY BPA
5.1 Subject to the limitations set forth below in section 5.2, "Customer Name))
shall offer and BP A shall purchase each month of each Fiscal Year an
amount of electric power equal to the Residential Load of "Customer Name))
beginning with the first month of the initial Exchange Period established
tinder section 4 above.
5.2 The rate for such power sale to BPA shall be equal to "Customer Name>>'s
ASC, as determined by BPA using the ASC Methodology. "Customer Name>>
may sell only an amount of electric power under this section 5 that is equal to
the Residential Load of "Customer Name)).
6. OFFER BY BPA AND PURCHASE BY <<CUSTOMER NAME))
6.1 Simultaneous with the offer by "Customer Name)) and purchase by BPA
pursuant to section 5 above, subject to the suspensions provisions set forth in
section 11 below, BPA shall offer and "Customer Name)) shall purchase each
month an amount of electric power equal to the Residential Load that.
"Customer Name>> offers and BPA purchases each month pursuant to
section 5.
6.2 The rate for such power sale to "Customer Name)) shall be the Utility-Specific
Exchange Rate applicable to "Customer Name)) as established pursuant to
section 3 above.
7. IN-LIEU TRANSACTIONS
In consideration of the mutual benefits afforded by this Agreement and the
Settlement Agreement, BP A shall not acquire or make arrangements to acquire In
Lieu Power for sale to "Customer Name)) during the Payment Period.
(dt#nPB.(<#####>)
6
I
8. INVOICING, BILLING, AND PAYMENT
8.1 Invoicing for Residential Load
8.1.1 "Customer Name)) shall submit to BPA for each month: (1) the
amount of "Customer Name)>'s Residential Load for such month that is
exchanged pursuant to sections 5 and 6 above and (2) the sum of
"Customer Name))'s Qualifying Residential and Small Farm Loads for
such month. Each submittal shall be subject to adjustment pursuant
to section 9 below.
8.1.2 Within 30 days following the receipt of each monthly submittal from
"Customer Name"'-and subject to section 9 below, BPA shall verify the
submittal, generate an invoice, and pay such invoice electronically by
the 30th day following the receipt of such submittal. If the 30th day is
a Saturday, Sunday, or federal holiday, then BPA shall electronically
pay {(Customer Name)) the next Business Day.
8.2 Reimbursement of Fees for Final Agreed-Upon Procedures Report
Once the final Agreed-Upon Procedures Report has been provided to the
Parties pursuant to section 9, Exhibit C, and Exhibit D, and the final
accounting invoice has been supplied to <<Customer Name)) by its independent
certified public accountant (CPA), then <<Customer Namc)) shall be
responsible for paying such invoice. For reimbursement, ((Customer Name))
shall create and submit to BP A a separate invoice with a copy of its CPA's
final accounting invoice attached. "Custome1. Name)) shall e-mail such
invoices to BPA at boaaverae:csvstemeost@)boa.!wv, or its successor. BPA
shall verify the final accounting invoice and reimburse "Customer Name))
electronically by the 30th day following the receipt of such, subject to the
reimbursement cap established in Exhibit C. Under no circumstances shall
BPA reimburse <<Customer Name)) an amount higher than the final
accounting invoice amount. If the 30'h day is a Saturday, Sunday, or federal
holiday, then BPA shall electronically reimburse "Customcr Name)) the next
Business Day.
9. ACCOUNTING, REVlEW,AND BUDGETING
<<Customer Name)) shall keep up-to-date records, accounts, and related documents
that pertain to this Agreement. These records, accounts, and documents shall
contain information that supports:
(1) <<Customer Name))'s ASC as determined pursuant to the ASC Methodology,
and giving effect to the waivers set forth in section 7.4 of the Settlement
Agreement;
(2) identification ofthe consumers that comprise <<Customer Name))'s Qualifying
Residential and Small Farm Load;
(3) the amount of Residential Load invoiced to BP A; and
(d#/.))PB-<4/####)>
7
(4) evidence that the benefits received by "Customer Name)) have been passed
through to consumers that comprise "Customer Name)>'s Qualifying
Residential and Small Farm Load, as provided for in section 10 below.
At BPA's expense, BPA, its agent, or "Customer Name)>'s agent, may, from time to
time, review or inspect, consistent with the provisions of section 19, Exhibit C, and
Exhibit D of this Agreement, "Customer Name)>'s records, accounts, and related
documents pertaining to this Agreement. BPA's or "Customer Name))'s agent, as
applicable, shall be subject to approval by the other Party. Such approval shall not
be unreasonably withheld. For purposes of meeting the Agreed-Upon Procedures,
pursuant to Exhibit C and Exhibit D, "Customer Name)) agrees to contract with the
CPA that also prepares its financial accounts and audits. Additional reviews or
inspections that BP A shall require include, but are not limited to, ({Customer
Name)>'s Annual REP Accounting Report. "Customer Name)) shall fully cooperate in
good faith with any such reviews or inspections. BP A retains the right to take
action consistent with the results of such reviews or inspections to require the
pass-through of such benefits to Qualifying Residential and Small Farm Load.
BPA's right to review or inspect "Customer Name))'s records, accounts, and related
documents pertaining to this Agreement for any Fiscal Year shall expire 60 months
after the end of such Fiscal Year. As long as BP A has such right to review or
inspect, (<Customer Name)) agrees to maintain such records, accounts, and related
documents.
If BPA determines that errors have occurred in implementing this Agreement that
result in an overpayment, then any such overpayment shall be returned to BP A by
"Customer Name)) within 30 days of BPA's determination, or BPA may adjust future
monetary benefit payments to ({Customer Name)). IfBPA determines that
"Customer Name)) has not received monetary benefits due to errors in implementing
this Agreement that result in an underpayment, then BP A shall pay "Customer
Name)) such monetary benefits within 30 days of BPA's determination that such
benefits were not received. In the event "Customer Name)) disputes any such BPA
determination regarding any overpayment or underpayment, such dispute shall be
subject to resolution pursuant to section 15.
10. PASS-THROUGH OF BENEFITS
10.1 Except as otherwise provided in this Agreement, all benefit amounts received
by "Customer Name)) from BP A under this Agreement shall be passed
through to residential and small farm customers as either: (1) a separately
stated credit to applicable retail rates; (2) monetary payments; or (3) as
otherwise directed by the applicable Regulatory Body(ies).
10.2 Benefits shall be passed through by "Customer Name)) in a timely manner, as
set forth in this section 10, provided, that, it is specifically acknowledged and
agreed that distributions of benefits for the Residential Load may be made by
"Customer Name)) in advance of its receipt of any such benefits from BPA and
that such benefits may be used to set off distributions to the Qualifying
Residential and Small Farm Load made by "Customer Name)) before or after
u##))PB-<<#####))
8
October 1,2011. The amount of benefits held as described in section 10.3
below at any time shall not exceed the greater of: (1) the expected receipt of
monetary payments from BP A under this Agreement over the next 180 days,
and (2) monetary payments received from BP A under this Agreement over
the preceding 180 days; provided, however, that if the amount of benefits held
in the account is less than $1,000,000, then <<Customer Name)) may distribute
benefits on a less frequent basis, provided that distributions are made at
least once each Fiscal Year; provided, further, that any remaining benefits
held shall be distributed to Qualifying Residential and Small Farm Load no
later than one year following the earlier of: (a) the end of the term of this
Agreement; or (b) suspension of this Agreement.
10.3 Benefits shall be passed through consistent with any procedures developed by
<<Customer Name>>'s Regulatory Body(ies) that are not otherwise inconsistent
with this Agreement, the Northwest Power Act, or other applicable federal
law. Until <<Customer Name)) has passed through such benefits pursuant to
section 10.1 above, benefits received by <<Customer Name)) shall be identified
on <<Customer Name))'s books of account and shall accrue interest at the
rate(s) established by <<Customer Name))'s Regulatory Body(ies).
11. SUSPENSION OF THIS AGREEMENT
11.1 Suspension of Agreement
11.1.1 <<Customel. Name)) may suspend performance under this Agreement
for any reason upon 30 days advance written notice to BP A prior to
the start of the Exchange Period. Such suspension shall suspend the
rights and obligations of both Parties as of such date, and such
suspension shall continue until the earlier to occur of (i) <<Customer
Name))'s reactivation of participation under this Agreement as of the
beginning of an Exchange Period upon 30 days advance written notice
to BPA, provided that <<Customer Name)) has timely submitted to BPA
a new Appendix 1 for the Exchange Period, as required by the ASC
Methodology, or (ii) the expiration of the Payment Period.
11.1.2 Upon suspension of this Agreement pursuant to section 11.1.1,
<<Customer Name)) shall not be entitled to REP Settlement Benefits
unless and until ((Customer Name)} reactivates participation under
this Agreement as of the beginning of an Exchange Period pursuant to
section 11.1.1 above.
11.1.3 Upon suspension of this Agreement pursuant to section 11.1.1,
<<Customer Name)) shall not seek and shall not be entitled to receive a
RPSA until the expiration of this Agreement on September 30, 2028.
11.1.4 No other provision of this Agreement or the Settlement Agreement
shall be affected by such suspension.
(<##})PB-((#####))
9
11.2 Suspension of Sections 5 and 6
11.2.1 The purchase and sale in sections 5 and 6 above shall be suspended
for any month of any Fiscal Year in the event that the amount BP A
would charge "Customer Name)) for such month pursuant to section 6
would exceed the amount "Customer Name)) would charge BPA for
such month pursuant to section 5.
11.2.2 During the period of suspension, BP A shall not be entitled to any
payments, whether as cash or as setoffs against future REP benefits,
nor shall BP A account for or keep track of any amounts that would
otherwise be owing but for the suspension provided in this section.
11.2.3 No other provision of this Agreement or the Settlement Agreement
shall be affected by such suspension.
11.3 Remedies
If the Federal Energy Regulatory Commission or a court of competent
jurisdiction remands, reverses, or otherwise finds unlawful a BP A final
decision or decisions that affect "Customer Name))'s receipt of, or failure to
receive, benefits pursuant to this Agreement, then BP A will review and
determine the rights and obligations of the Parties through additional
administrative aetions(s) as necessary to respond to such regulatory or court
decisions.
{{DRAFTING NOTE: ONLY APPLICABLE FOR IOUS WITH A LONG-TERM RPSAll
12. TERMINATION OF PREVIOUS RPSA
As of October 1, 2011, "Customer Name>>'s Residential Purchase and Sales
Agreement, Contract No. [xxxx], is hereby terminated and replaced by this
Agreement. Upon termination of such "Customer Name))'s Residential Purchase and
Sale Agreement, Contract No. [xxxx], all obligations incurred thereunder shall be
preserved until satisfied.
13. NOTICES AND CONTACT INFORMATION
Any notice required under this Agreement that requires such notice to be provided
under the terms of this section shall be provided in writing to the other Party in one
of the following ways:
(1) delivered in person;
(2) by a nationally recognized delivery service with proof of receipt;
(3) by United States Certified Mail with return receipt requested;
(4) electronically, if both Parties have means to verify the electronic notice's
origin, date, time of transmittal and receipt; or
(5) by another method agreed to by the Parties.
4#h)PB-{C#####))
10
Notices are effective when received. Either Party may change the name or address
for delivery of notice by providing notice of such change or other mutually agreed
method. The Parties shall deliver notices to the following person and address:
(Draner's Note: Chech BPA address and phone numba prefix 10 ells"re it is
applicable.)
!fto <<Customer Name)): !fto BPA:
((Utility Name))
<<St.reet Address))
<<P.O. Box))
<<City, State, Zip))
Attn: "Contact Name))
"Contact Title))
((###-###-####))
,cI##I-### -####))
((E-maiioaddress))
Phone:
FAX:
E-Mail:
Bonneville Power Administration
"Street Address))
"P.O. Box))
((City, State, Zip))
Attn: "AE Name - Routing))
(<Senior ))Account Executive
,cI##I-###-####))
,cI##I-###-####))
HE-mail address))
Phone:
FAX:
E-Mail:
14. UNCONTROLLABLE FORCES
14.1 A Party shall not be in breach of an obligation under this Agreement to the
extent its failure to fulfill the obligation is due to an Uncontrollable Force.
"Uncontrollable Force" means an event beyond the reasonable control, and
without the fault or negligence, of the Party claiming the Uncontrollable
Force, that prevents that Party from performing its obligations under this
Agreement and which that Party could not have avoided by the exercise of
reasonable care, diligence, and foresight. Uncontrollable Forces include each
event listed below, to the extent it satisfies the foregoing criteria, but are not
limited to these listed events:
. (1) strikes or work stoppage;
(2) floods, earthquakes, other natural disasters, or terrorist acts; and
(3) final orders or injunctions issued by a court or regulatory body having
subject matter jurisdiction which the Party claiming the
Uncontrollable Force, after diligent efforts, was unable to have stayed,
suspended, or set aside pending review by a court having subject
matter jurisdiction.
14.2 Neither the unavailability of funds or financing, nor conditions of national or
.loeal economies or markets shall be considered an Uncontrollable Force. The
economic hardship of either Party shall not constitute an Uncontrollable
Force. Nothing contained in this provision shall be construed to require
either Party to settle any strike or labor dispute in which it may be involved.
14.3 !fan Uncontrollable Force prevents a Party from performing any of its
obligations under this Agreement, such Party shall:
((#f/.))PB-<(#####ll
11
(1) immediately notify the other Party of such Uncontrollable Force by
any means practicable and confirm such notice in writing as soon as
reasonably practicable;
(2) use commercially reasonable efforts to mitigate the effects of such
Uncontrollable Force, remedy its inability to perform, and resume full
performance of its obligation hereunder as soon as reasonably
practicable;
(3) keep the other Party apprised of such efforts on an ongoing basis; and
(4) provide written notice of the resumption of performance.
Written notices sent under this section must comply with section 13.
15. GOVERNING LAW AND DISPUTE RESOLUTION
This Agreement shall be interpreted consistent with and governed by federa11aw.
IfBP A receives or gives written notice of a dispute to be resolved through binding arbitration
in accordance with this section 15, BP A will promptly deliver a copy of such written notice
(which may be delivered by electronic means) to all parties to the Settlement Agreement.
During a contract dispute or contract issue between the Parties arising out of this
Agreement, the Parties shall continue performance under this Agreement pending
resolution of the dispute or issue, unless to do so would be impossible or
impracticable.
Any dispute concerning any alleged breach of this Agreement that would also
constitute a breach of the Settlement Agreement shall be subject to the dispute
resolution provisions of the Settlement Agreement rather than the provisions below
of this section 15. Any other dispute arising out of this Agreement shall be resolved
as provided below in this section 15.
<<Customer Name>> and BP A shall identify issue(s) in dispute arising out of this
Agreement and make a good faith effort to negotiate a resolution of such disputes
before either may initiate litigation or arbitration. Such good faith effort shall
include discussions or negotiations between the Parties' executives or managers.
Unless the Parties engage in binding arbitration as provided for in section 9 of the
Settlement Agreement or in sections 15.2 through 15.6 of this Agreement, the
Parties reserve their rights to individually seek judicial resolution of any dispute
arising under this Agreement.
15.1 Judicial Resolution
Final actions subject to section 9(e) of the Northwest Power Act are not
subject to arbitration under this Agreement and shall remain within the
exclusive jurisdiction of the United States Court of Appeals for the Ninth
Circuit. Such final actions include, but are not limited to, the establishment
and the implementation of rates and rate methodologies. Any dispute
regarding any rights or obligations of <<Customer Name>> or BPA under any
<4I#))PB-4t####))
12
rate or rate methodology, or BPA policy, including the implementation of
such policy, shall not be subject to arbitration under this Agreement. For
purposes of this section 15, BPA policy means. any written document adopted
by BP A as a final action in a decision record or record of decision that
establishes a policy of general application or makes a determination under an
applicable statute or regulation. IfBPA determines that a dispute is
excluded from arbitration under this section 15, then <<Customer Name>> may
apply to the federal court having jurisdiction for an order determining
whether such dispute is subject to nonbinding arbitration under this
section 15.
15.2 Arbitration
Any contract dispute or contract issue between the Parties arising out of this
Agreement, which is not excluded by section 15.1 or otherwise excluded by
this section 15, shall be subject to arbitration, as set forth below in this
section 15.2 and sections 15.3 through 15.6 of this Agreement.
<<Customer Name>> may request that BPA engage in binding arbitration to
resolve any dispute. If<<Customer Name)) requests such binding arbitration
and BP A determines in its sole discretion that binding arbitration of the
dispute is appropriate under BP A's Binding Arbitration Policy or its
successor, then BP A shall engage in such binding arbitration, provided that
the remaining requirements of this section 15.2 and sections 15.3 and 15.4
are met. BPA may request that <<Customer Name>> engage in binding
arbitration to resolve any dispute. In response to BP A's request, <<Customer
Name>> may agree to binding arbitration of such dispute, provided that the
remaining requirements of this section 15.2 and sections 15.3 and 15.4 are
met. Before initiating binding arbitration, the Parties shall draft and sign an
agreement to engage in binding arbitration, which shall set forth the precise
issue in dispute, the amount in controversy and the maximum monetary
award allowed, pursuant to BPA's Binding Arbitration Policy or its successor.
Nonbinding arbitration shall be used to resolve any dispute arising out of this
contract that is not excluded by section 15.1 above and is not resolved via
binding arbitration, unless ((Customer Name)) notifies BPA that it does not
wish to proceed with nonbinding arbitration.
15.3 Arbitration Procedure
Any arbitration shall take place in Portland, Oregon, unless the Parties agree
otherwise. The Parties agree that a fundamental purpose for arbitration is
the expedient resolution of disputes; therefore, the Parties shall make best
efforts to resolve an arbitrable dispute within one year of initiating
arbitration. The rules for arbitration shall be agreed to by the Parties.
15.4 Arbitration Remedies
The payment of monies shall be the exclusive remedy available in any
arbitration proceeding pursuant to this section 15. This shall not be
interpreted to preclude the Parties from agreeing to limit the object of
<<##})PB-((#####))
13
arbitration to the determination of facts. Under no circumstances shall
specific performance be an available remedy against BP A.
15.5 Finality
15.5.1 In binding arbitration,.the arbitration award shall be final and
binding on the Parties, except that either Party may seek judicial
review based upon any of the grounds referred to in the Federal
Arbitration Act, 9 V.S.C. ~1-16 (1988). Judgment upon the award
rendered by the arbitrator(s) may be entered by any court having
jurisdiction thereof.
15.5.2 In nonbinding arbitration, the arbitration award is not binding on the
Parties. Each Party shall notify the other Party within 30 calendar
days, or such other time as the Parties otherwise agreed to, whether it
accepts or rejects the arbitration award. Subsequent to nonbinding
arbitration, if either Party rejects the arbitration award, either Party
may seek judicial resolution of the dispute, provided that such suit is
brought no later than 395 calendar days after the date the arbitration
award was issued.
15.6 Arbitration Costs
Each Party shall be responsible for its own costs of arbitration, including
legal fees. Unless otherwise agreed to by the Parties; the arbitrator(s) may
apportion all other costs of arbitration between the Parties in such manner as
the arbitrator(s) deem reasonable taking into account the circumstances of
the case, the conduct of the Parties during the proceeding, and the result of
the arbitration.
16. STATUTORY PROVISIONS
16.1 Retail Rate Schedules
<<Customer Name>> shall make its retail rate schedules available to BPA, as
required by section 5(a) of the Bonneville Project Act, P.L. 75-329, within
30 days of each of <<Customer Name>>'s retail rate schedule effective dates.
This requirement may be satisfied by <<Customer Name>> informing BPA of its
public website where such information is posted and kept current.
16.2 New Large Single Loads and CF/CTs
16.2.1 Determination of an NLSL
In accordance with BPA's NLSL Policy, BPA may determine that a
load is an NLSL as follows:
16.2.1.1 BPA shall determine an increase in production load to be an
NLSL if any load associated with a new facility, an existing
facility, or an expansion of an existing facility, whieh.is not
contracted for, or committed to (CF/CT), as determined by the
Administrator, by a public body, cooperative, investor-owned
(df:#nPB-<<#####l)
14
utility, or federal agency customer prior to September I, 1979,
and which will result in an increase in power requirements of
such customer of 10 Average Megawatts (87,600,000
kilowatt-hours) or more in any consecutive 12-month period.
16.2.1.2 For the sole purpose of computing the increase in energy
consumption between any two consecutive 12-month periods
of comparison under this section 16.2.1, reductions in the end-
use consumer's load associated with a facility during the first
12-month period of comparison due to unusual events
reasonably beyond the control of I. he end-use consumer shall
be determined by BP A, and the energy consumption shall be
computed as if such reductions had not occurred.
16.2.1.3 The Parties may expressly agree in writing that the installed
production equipment at a facility will exceed 10 Average
Megawatts consumption over any 12 consecutive months and
such agreement shall constitute a binding NLSL
determination.
16.2.2 Determination of a Facility
BPA shall make a written determination as to what constitutes a
single facility, for the purpose of identifying an NLSL, based on the
following criteria:
(1) whether the load is operated by a single end-use consumer;
(2) whether the load is in a single location;
(3) whether the load serves a manufacturing process which
produces a single product or type of product;
(4) whether separable portions of I. he load are interdependent;
(5) whether the load is contracted for, served or billed as a single
load under (<Customer Namc)}'s customary billing and service
policy;
(6) consideration ofthe facts from previous similar situations; and
(7) any other factors the Parties determine to be relevant.
16.2.3 Administrative Obligations and Rights
16.2.3.1 ((Customer Name>>'s CF/CT loads and NLSLs are listed in
Exhibit E.
16.2.3.2 ((Customer Name>> shall provide reasonable notice to BPA of
any expected increase in a single load that may qualify as an
((##>)PB-((#####))
15
NLSL. The Parties shall list any such potential NLSLs in
Exhibit E. If BP A determines that any load associated with a
single facility is capable of growing ten Average Megawatts or
more in a consecutive 12-month period, then such load shall
be subject to monitoring as determined necessary by BPA.
16.2.3.3 When BPA makes a request, "Customer Name>> shall provide
physical access to its substations and other service locations
where BPA needs to perform inspections or gather
infor.mation for purposes of implementing section 3(13) of the
Northwest Power Act, including but not limited to making a
final NLSL, facility, or CF/CT determination. "Customer
Name>> shall make a request to the end-use consumer to
provide BP A, at reasonable times, physical access to inspect a
facility for these purposes.
16.2.3.4 Unless the Parties agree pursuant to section 16.2.1.3 above,
BPA shall determine whether a new load or an increase in
existing load at a facility is an NLSL. If BP A determines that
the load is an NLSL, BPA shall notify "Customer Name>> and
the Parties shall add the NLSL to Exhibit E to reflect BP A's
determination.
16.2.4 Metering an NLSL
For any loads that are monitored by BPA for an NLSL determination,
and for any loads at any facility that is determined by BP A to be an
NLSL, BPA may, in its sole discretion, install BPA owned meters. If
the Parties agree otherwise, "Customer Name>> may install meters
meeting. the exact specification BPA provides to "Customer Name>>.
"Customer Name>> and BPA shall enter into a separate agreement for
the location, ownership, cost responsibility, access, maintenance,
testing, replacement and liability of the Parties with respect to such
meters. "Customer Name>> shall arrange for metering locations that
allow accurate measurement of the facility's load. "Customer Name>>
shall arrange for BPA to have physical access to such meters and
"Customer Name>> shall ensure BPA has access to all NLSL meter
data that BP A determines is necessary to forecast, plan, schedule, and
bill for power.
16.2.5 Undetermined NLSLs
IfBPA concludes in its sole judgment that "Customer Name)> has not
fulfilled its obligations, or has not been able to obtain access or
information from the end-use consumer under sections 16.2.3 and
16.2.4, BPA may determine any load subject to NLSL monitoring to be
an NLSL. Such NLSL determination shall be fina1'un1ess "Customer
Name>> proves to BPA's satisfaction that the applicable load did not
exceed ten Average Megawatts in any 12-month monitoring period.
(d/#))PB-{<#####))
16
16.3 BPA Appropriations Refinancing
The Parties agree that the provisions of section 3201 (i) of the Bonneville
Power Administration Refinancing section of the Omnibus Consolidated
Rescissions and Appropriations Act of 1996 (BPA Refinancing Act),
P.L. 104-134, 110 Stat. 1321, 350, as stated in the United States Code on the
Implementation Effective Date, are incorporated by reference and are a
material term of this Agreement.
17. STANDARD PROVISIONS
17.1 Amendments
Except where this Agreement explicitly allows for one Party to unilaterally
amend a provision or exhibit, no amendment of this Agreement shall be of
any force or effect unless set forth in writing and signed by authorized
representatives of each Party; provided, that in the event of the conflict
between the provisions of any amendment of this Agreement and the
provisions of the Settlement Agreement, the provisions of the Settlement
Agreement shall prevail.
BPA shall, prior to entering into any amendment of this Agreement, deliver a copy
of the proposal to enter into such proposed amendment (which may be delivered by
electronic means) to all parties to the Settlement Agreement, and shall withhold
execution of such proposed amendment until the completion of any process as set
forth in section 13. 1.2 of the Settlement Agreement with respect to such proposed
amendment, provided that such process is commenced in accordance with section
13.1.2 of the Settlement Agreement.
Amendments or revisions to matters related to the Agreed-Upon Procedures
included in Exhibits C and D to this Agreement are not subject to this section 17. I.
17.2 Entire Agreement and Order of Precedence
The Settlement Agreement and this Agreement, including documents
expressly incorporated by reference, constitute the entire agreement between
the Parties with respect to the subject matter of this Agreement. They
supersede all previous communications, representations, or contracts, either
written or oral, which purport to describe or embody the subject matter of
this Agreement. The body of the Settlement Agreement shall prevail over
this Agreement in the event of a conflict. The body of this Agreement shall
prevail over the exhibits to this Agreement in the event of a conflict.
17.3 Assignment
This Agreement is binding on any successors and assigns of the Parties.
Neither Party may otherwise transfer or assign this Agreement, in whole or
in part, without the other Party's written consent. Such consent shall not be
unreasonably withheld. Without limiting the foregoing, BP A's refusal to
consent to assignment shall not be considered unreasonable if, in BP A's sole
discretion the sale of power by BP A to the assignee would violate any
applicable statute. "Customer Name)) may not transfer or assign this
Agreement to any of its retail consumers.
(c##)) PB-<<#####)i
17
17.4 No Third-Party Beneficiaries
This Agreement is made and entered into for the sole benefit of the Parties,
and the Parties intend that no other person or entity shall be a direct or
indirect beneficiary of this Agreement.
17.5 Waivers
No waiver of any provision or breach of this Agreement shall be effective
unless such waiver is in writing and signed by the waiving Party, and any
such waiver shall not be deemed a waiver of any other provision of this
Agreement or of any other breach of this Agreement.
17.6 BPA Policies
Any reference in this Agreement to BPA policies, including any revisions,
does not constitute agreement of "Customer Name)) to such policy by
execution of this Agreement, nor shall it be construed to be a waiver of the
right of <<Customer Name>> to seek judicial review of any such policy.
18. NOTICE PROVIDED TO RESIDENTIAL AND SMALL FARM CONSUMERS
<<Customer Name)) will ensure that any entity that issues customer bills to
((Customer Name))'s residential and small farm consumers shall provide written
notice on such customer bills that the benefits of this Agreement are "Federal
Columbia River Benefits supplied by BPA."
19. INFORMATION EXCHANGE AND CONFIDENTIALITY
19.1 Information Exchange
Upon request, each Party shall provide the other Party with any information
that is necessary to administer this Agreement. Such information shall be
provided in a timely manner.
19.2 Confidentiality
Before "Customer Name>> provides information to BPA that is confidential, or
is otherwise subject to privilege, or nondisclosure, <<Customer Name>> shall
clearly designate such information as confidential. BP A shall notify
((Customer Name)) as soon as practicable of any request received under the.
Freedom ofInformation Act (FOIA), or under any other federal law or court
or administrative order, for any confidential information. BPA shall only
release such confidential information to comply with FOIA or if required by
any other federal law or court or aaministrative order. BP A shall limit the
use and dissemination of confidential inforInation within BPA to employees
who need it for purposes of administering this Agreement.
<(#:#))PB4#####i)
18
20. SIGNATURES
The signatories represent that they are authorized to enter into this Agreement on
behalf of the Party for which they sign.
<<FULL NAIVIE OF CUSTOMER>>
UNITED STATES OF AMERICA
Department of Energy
Bonneville Power Administration
By
By
Name
Name
(PrinllType)
(Print/Type)
Title
Title
Date
Date
(PS((XfLOCl). ((File Name with Path>.DOC) (,mm/ddf:vp {Drafter's Note: Insert dote of finalized contract here}
((##>)PB-<<#####n
19
EXHIBIT A TO REP SETTLEMENT IMPLEMENTATION AGREEMENT
QUALIFYING RESIDENTIAL AND SMALL FARM LOAD DEFINITION
1. <<Customer Name>>'s Qualifying Residential and Small Farm Load is the sum of the
loads within the Region eligible for the Residential Exchange Program under the
tariff schedules described below, as determined pursuant to BP A's Customer Load
Eligibility Guidelines, or its successor. Such load will be adjusted for distribution
losses as determined pursuant to the ASC Methodology, as revised, supplemented,
or superseded.
2. Such tariff schedules as presently effective include:
2.1 for all schedules listed below, include the amount, expressed in
kilowatthours, of Qualifying Residential and Small Farm Load supplied by
((Customer Nanle)) under:
2.1.1 <<schedule>>
2.1.2 <<schedule>>
2.1.3 <<schedule>>
3. See httn:/lwww.bna.e-ov/coruorate/finance/ascmlindex.cfm for the current version of BPA's
Customer Load Eligibility Guidelines.
(pSI/X/LOC)). ((File Name with Path)}.DOC) ((mmJdd/y)')) {Drafter's Note: insert. dote olIincIfi:::ed contract here}
((1t#})PB-~<#####)), ((Customer Name))
1 of 1
EXHIBIT B TO REP SETTLEMENT IMPLEMENTATION AGREEMENT
AVERAGE SYSTEM COST METHODOLOGY
See httn:/Iwww.bna.eov/coroorate/finance/ascmlindex.cfmfor the current version of BPA's
Average System Cost Methodology
(pSHX/LOC,}- /IFill- Name \vith Pa1.h)).DOC) ((mm/dd/!.y>~ {Drafter's 1\'ot(': Insert dat~' of [inuli:zed con/mc! here)
(<##))PB-((####th), ((Customer Name))
1 of 1
EXHIBIT C TO REP SETTLEMENT IMPLEMENTATION AGREEMENT
TERMS AND CONDITIONS OF FINAL AGREED-UPON PROCEDURES REPORT
1. FINAL REPORT TERMS AND CONDITIONS
Pursuant to section 9 of the body of the Agreement, <<Customer Name>> agrees to,
cooperate with a biennial review or inspection of its accounts and financial records
concerning its participation in the Residential Exchange Program and this
Agreement.
Prior to <<Customcr Name>>'s CPA initiating each final Agreed-Upon Procedures
report, <<Customer Name>> shall (1) obtain an engagement letter between <<Customer
Name>> and its CPA and (2) ensure the CPA provides BPA a letter of
acknowledgement of such engagement. The engagement letter and letter of
acknowledgement should provide the Parties a detailed statement of the work to be
performed to meet the Agreed-Upon Procedures included in Exhibit D, the hours,
and the fee for such work.
By each final Agreed-Upon Procedures report due date, <<Customer Name>> shall
submit to BPA a copy of the final Agreed-Upon Procedures report completed by
<<Customer Namc>>'s CPA that complies with the Agreed-Upon Procedures in
Exhibit D and encompasses the corresponding reporting period listed in the table
below.
Final Agreed-Upon Procedures
Report Due Dates
Reporting Periods
June 30, 2012
Every other June 30<" thereafter
For
For
FY 2010 & FY 2011
The Drevious two Fiscal Years
<<Customer Namc>> shall be responsible for ensuring that:
(1) each CPA's report provides all information requested by BP A in the Agreed-
Upon Procedures included in Exhibit D; and
(2) CPA is contractually obligated to conduct each CPA report in accordance with
the applicable auditing standards, e.g., General, Field Work, and Reporting
Standards for Attestation Engagements as contained in the Government
Auditing Standards (the Yellow Book) by the Comptroller General of the
United States of America; the' Public Company Accounting Oversight Board
(PCAOB) Statements of Standards for Attestation Engagements; or, the
American Institute of Certified Public Accountants (AICPA) Statement on
Standards for Attestation Engagements.
(d#/.))PB-((###It#)), ((Customer Name))
lof2
2. BPA'S REIMBURSEMENT CAP AND REIMBURSEMENT OF INVOICED
CPA FEES TO <<CUSTOMER NAME..
2.1 BPA's Reimbursement Cap
By February 28,2012; and by every other February 28th thereafter, BPA
shall provide <<Customer Name>> with a letter that includes the maximum
amount BPA shall reimburse <<Customer Name>> for the upcoming final
Agreed- Upon Procedures report. <<Customer Name>> shall obtain an
engagement letter from its CPA for the final Agreed-Upon Procedures report
as soon as practicable after receiving notice of its reimbursement cap from
BPA. <<Customer Name>>'s reimbursement cap shall be determined solely by
BPA and shall be based on BPA's overall reporting budget for all parties
participating in the Residential Exchange Program. If the estimate in
<<Customer Name>>'s CPA engagement letter and BPA's letter of
acknowledgement exceeds <<Customer Name>>'s reimbursement cap and BPA
determines an adjustment to the Agreed-Upon Procedures to be appropriate
to ensure the CPA's review can be completed at or under the reimbursement
cap, then BPA shall promptly notify <<Customer Name>> and the Parties shall
adjust <<Customer Name>>'s Agreed-Upon Procedures and revise Exhibit D
accordingly.
2.2 Reimbursement of Fees
BPA shall reimburse <<Customer Name>> for its CPA fees for completing the
Agreed-Upon Procedures pursuant to section 8.2 of the body of this
Agreement.
3. REVISIONS
BP A may, upon not less than 10 business days' prior written notice to <<Customer
Name>>, unilaterally revise this exhibit to implement changes that BPA determines
are reasonably necessary to allow it to conduct reviews of the accounts and financial
records concerning BP A customers' participation in the Residential Exchange
Program.
BP A shall provide a draft of any material revisions of this exhibit to <<Customer
Nal11e)~l with reasonable time for comment, prior to BPA's written notice of the
reV1SlOll.
(pS<,\/LOC))- (,File Name with Path...DOC) <Ilnm/dd/yyn tDraiter:s Note: Insert dale of finalized cont.mct here}
(,#fh)PB-<<#####)), ((Customer Name))
Exhibit C, Terms and Conditions of Final Agreed-Upon Procedures Report
20f2
EXHIBIT D TO REP SETTLEMENT IMPLEMENTATION AGREEMENT
AGREED-UPON PROCEDURES
<<Customer Name>> shall ensure that its CPA is contractually obligated to complete the
following Agreed-Upon Procedures, sections 1 through section 6, pursuant to the terms and
conditions included in Exhibit C.
1. RESIDENTIAL EXCHANGE PROGRAM (REP) INVOICE SUPPORTED BY
LOAD DATA
1.1 Obtain from "Customer Name>> a reconciliation of (i) monthly Residential
Load to billing system load data, and (ii) monthly Qualifying Residential and
Small Farm Load to billing system load data.
1.2 Agree load data to <<Customer Name>>'s internal reports.
1.3 If such reconciliation does not exist, agree the total monthly load amount
invoiced by the (<Customer Name>> to BPA with <<Cust.omer Name>>'s billing
system load data and internal reports. (BP A shall provide the CPA firm with
copies of <<Customer Name>>'s monthly invoices submitted to BPA.)
1.4 Follow up with <<Customer Name>> personnel for explanations of any monthly
differences greater than 1 % and document such explanations and differences.
2. RESIDENTIAL BILLS CONTAIN CORRECT REP CREDITS
2.1 Obtain from (<Customer Name>> copies of all REP credit tariffs along with a
description of the applicable eligible loads that qualifY for residential rate
credit treatment.
2.2 The CPA shall select a random sample of 100 residential (<Customer Name>>
bills for performing procedures, ensuring that all months of the Fiscal Year
<<10/0111#1## - 09/3011#1##>> are sampled, and that bills with small invoiced
amounts (less than $501 month), average invoiced amounts (between $50 and
$150/month), and large invoiced amounts (greater than $150/month) are
selected.
2.3 Verify that the approved tariff is applied to the appropriate load to calculate
the credit for each of the sampled items. Note any exceptions.
2.4 Follow up with <<Customer Name>> personnel for explanations of any
differences and document such explanations and differences.
U##))PB.<<#####I), ((Customer Name))
lof3
3. SMALL FARM AND IRRIGATION BILLS CONTAIN CORRECT REP
CREDITS
,
3.1 Obtain from <<Customer Name>> a copy of the REP irrigation credit tariff
amount and a description of applicable loads that qualify for small farm and
irrigation rate credit treatment for the Fiscal Year <<10/01/#### - 09/30/####>>.
3.2 Obtain from <<Customer Name>> which months of the Fiscal Year
<<10/01/#### - 09/30/####>> were the high irrigation season, if this information
was not obtained during the Agreed-Upon Procedures in section 1 of this
exhibit.
3.3 Obtain from <<Customer Name>> a list of farms with multiple metered
pumping loads for the Fiscal Year <<10/01/#### - 09/30/####>>.
3.4 The CPA shall randomly select a sample of 25 <<Customer Name>> bills for the
farms with multiple metered pumping loads, ensuring that all bills occurred
during the irrigation season months.
3.5 For a sampled farm, ensure that the aggregation of multiple separately
metered irrigation pumping loads, together with any allocated pumping loads
served by common pumping stations attributable to individual farms, do not
exceed the (combined/aggregated) monthly irrigation/pumping loads eligible
to receive the REP credit up to the cap of 222,000 kWh/month per individual
farm. Note any exceptions.
3.6 Ensure that the approved tariff is applied to the appropriate load to calculate
the credit for each of the sampled items. Note any exceptions.
3.7 Follow up with <<Customer Name>> personnel for explanations of any
differences and document such explanations and differences.
4. <<CUSTOMER NAME>>'S ANNUAL ACCOUNTING REPORT SUPPORTED BY
BOOKS AND RECORDS
4.1 Agree the total amount ofREP monies/credits distributed as reported in
<<Customer Name>>'s Annual REP Accounting Report submitted to BPA with
((Customer Name))'s general ledger accounts or subsidiary accounting records
for the same time period. Note any exceptions.
4.2 Describe the method used to compute interest credit/expense on the monthly
Pass-through account and provide documentation of s~ch.
4.3 Obtain from <<Customer Name>> copies of <<Customer Name>>'s monthly interest
credit/expense calculation associated with the Pass-through account for the
Fiscal Year <<10101/#### - 09/30/####>>.
K!#!-))PB.\</t####l), ((Cust.omer Name))
Exhibit D, Agreed-Upon Procedures
20f3
4.4 Agree that interest is credited/expensed on the monthly Pass-through
account balance as described above in section 4.2 for the Fiscal Year
<<10/01/#### - 09/30/####>>. Note any differences.
4.5 Agree the interest credit/expense associated with undistributed monthly
Pass-through account balances as reported in <<Customer Name>>'s Annual
REP Accounting Report with <<Customer Name>>'s general ledger accounts or
subsidiary accounting records for the same time period. Note any exceptions.
4.6 Agree the ending balance of the Pass-through account for the Fiscal Year-end
date in the Annual REP Accounting Report with the balance contained in
"Customer Name>>'s books and records associated with that'date.
4.7 If the Pass-through account monies are on deposit with a bank/financial
institution, confirm the ending balance at Fiscal Year-end (09/301XX) with
the institution. Note any differences between the confirmation and the
recorded amount.
4.8 Follow up with <<Customer Name>> personnel for explanations of any
differences and document such explanations and difference.s._
5. FEDERAL COLUMBIA RIVER BENEFIT BILL NOTICE
Confirm that the statement or footnote "Federal Columbia River Benefits supplied
by BP A," is included in all of the sampled residential and small farm <<Customer
Name>> bills.
6. DEVIATIONS FROM STANDARDS
In the final Agreed-Upon Procedures report, disclose any deviations from the
applicable standards listed in section 1 of Exhibit C.
7. REVISIONS
BPA may, upon not less than 10 business days' prior written notice to <<Customer
Name>>, unilaterally revise this exhibit to implement change's that BPA determines
are reasonably necessary to allow it to cOllduct reviews of the accounts and financial
records concerning BP A customers' participation in the Residential Exchange
Program.
BP A shall provide a draft of any material revisions of this exhibit to <<Customer
Name>>, with reasonable time for comment, prior to BPA's written notice of the
reVISIon.
(PS((XILOCII- ((File N:lme with Path)).DOC) Hmm/dd/yy)) /Dmfter's Noll': Insert date of finalized contract
here} ,
K!#h)PB-<<#####)), ((Customer Name))
Exhibit D, Agreed-Upon Procedures
30f3
EXHIBIT E TO REP SETTLEMENT IMPLEMENTATION AGREEMENT
CF/CT AND NEW LARGE SINGLE LOADS
1. CF/CT AND NEW LARGE SINGLE LOADS
Ootion 1: Include /he following if Cl/s!omer has 110 CF/CT loads.
1.1 CF/CT Loads
<<Customer Name>> has no loads identified that were contracted for, or
committed to (CF/CT), as of September 1, 1979, as defined in section 3(l3)(A)
of the Northwest Power Act.
End Option I
Oo/ioll 2: Include /he following if ws/oma hns CF/CT loads.
Drafter:, No/e: If ellS/Oilier has 1II0re than one CF/CT, n 11111 ber each
sepawtely as (1), (2), etc. and indent appropria/cly.
1.1 CF/CT Loads
The Administrator has determined that the followingloads were contracted
for, or committed to be served (CF/CT), as of September 1, 1979, as defined in
section 3(13)(A) of the Northwest Power Act.
End-use consumer's name:
Facility name:
Facility location:
Date of CF/CT determination:
Facility description:
Amount of firm energy (megawatts at 100 percent load factor) contracted for,
or committed to:
End Option 2
Ootion I: Inclllde t!le following if customer hns 110 POTENTIAL NT"SLs.
'1.2 Potential NLSLs
<<Customer Name>> has no identified potential NLSLs.
End Option I
Ootion 2: Include the following if customer hn.. POTENTIAL NLSL(s).
Dmfter's Note: If cus/orner has more tha" one potential NLSL, nUll/bel' each
separately as (1), (2), etc. a/Ld i"den! appropriately.
1.2 Potential NLSLs
<<Customer Name>> has the following potential NLSL(s):
End-use consumer name:
Facility location:
End Option 2
\
(C##nPB-<<#####>), ((Customer Name))
lof2
1.3 Existing NLSLs
Ovtion I: Inclode the following if ClLstOlllel' hu.5 no existing NLSLs AND
DELETE sections 1.3.1.
"Customer Name>> has no existing NLSLs.
End Oplion 1
Ootion 2: Include the following ifcustollle>' h"s (lI/. existing NLSL ond will
seme the NLSL with a non-feder,,1 firm resource.
1.3.1 <<Name ofNLSL,) NLSL
<<Customer Name>> has an NLSL.
End-use consumer name:
Facility location:
Date load determined as an NLSL:
Approximate load:
Description of NLSL:
Manner of service:
End Optioll 2
(PS<,X1LOCu- ((File Name wit.h Pat.l1J>.DOC) ((mm/dd/yp {Drafter's Note: lnsaf date 0/ firwli=ed contract here}
(<##HPB-(<#####)), {(Cust.omer Name))
Exhibit E, CF/CT and New Large Single Loads
20f2
Exhibit B
PF -02 Customer Percentues and Customer-Sue c - 2 Re ds
Corrected
Non-Slice
BPA Corrected Non- PF-02 PF -02 Customer
Customer Slice PF -02 Revenue Slice % Customer Specific PF -02
ID Number BP A Customer Name Revenues Share Share Percentae.e Refund
77.3722% 22.6278%
10055 Albion Citv of $. 0.0000% 0.0000% 0.0000% $.
10005 Alder M ulual $521,487 0.0083% 0.0000% 0.0083% $3178
10057 Ashland Cirv of $26 503,084 0.4221% 0.0000% 0.4221% $161 518
10015 Asotin County PUD # I $. 0.0000% 0.0000% 0.0000% $.
10059 Bandon Cit'\l of $9115,740 0.1452% 0.0000% 0.1452% $55 554
10024 Benton County PUD # I $65 553,689 1.0439% 1.7641% 2.8080% $1 074609
10025 Benton REA $60 041 721 0.9562% 0.0000% 0.9562% $365914
10027 Bio Bend Elec Cooo $29627,132 0.4718% 0.0000% 0.4718% $180557
10029 BlacWv Lane Elee Coon $. 0.1080% 0.1608% 0.2688% $102 877
10061 Blaine, Cit'\l of $9,928,284 0.1581% 0.0000% 0.1581% $60,506
10062 Bonners Ferrv City of $7480515 0.1191% 0.0000% 0.1191% $45 589
10064 Burl~ Citv uf $17 292,443 0.2754% 0.0000% 0.2754% $105386
10044 Canbv Utilitv Board $24 086 860 0.3836% 0.0000% 0.3836% $146 793
10065 Cascade Locks, City of $2 939 295 0.0468% 0.0000% 0.0468% $17913
10046 Central Electric Coon $. 0.3767% 0.6699% 1.0466% $400537
10047 Central Lincoln PUD $79 300,824 1.2629% 0.0000% 1.2629% $483 285
10066 Centralia, City of $26,948,11 5 0.4291% 0.0000% 0.4291% $164 230
10067 Chenev Citv of $17820873 0.2838% 0.0000% 0.2838% $108 606
10068 CheweJah Cih1 of $. 0.0000% 0.0000% 0.0000% $.
10101 Clallam Countv PUD # I $85.421,031 1.3603% 0.0000% 1.3603% $520 583
10103 Clark Countv PUD # I $389 042,226 6.1955% 0.0000% 6.1955% $2370948
10105 Clatskanie PUD $40 050,220 0.6378% 0.9755% 1.6133% $617393
.
10106 Clearwater Power $. 0.1025% 0.2263% 0.3288% $125833
cifi PF 0
fun
IlPB-12322
lof6
Corrected
Non-Slice
BPA Corrected Non- PF -02 PF-02 Customer
Customer Slice PF -02 Revenue Slice % Customer Specific PF -02
ill Number BP A Customer Name Revenues Share Share Percenta~e Refund
10109 Columbia Basin Elec Coon $. 0.0000% 0.0000% 0.0000% $.
10111 Columbia Power Cooo $. 0.0000% 0.0000% 0.0000% $.
10113 Columbia REA $. 0.0000% 0.0000% 0.0000% $.
10112 Columbia River PUD $43556,001 0.6936% 0.0000% 0.6936% $265 444
Consolidated Irrigation $299,502 0.0048% 0.0000% 0.0048% $1,825
10116 District #19
10118 Consumers Power $. 0.2361% 0.4069% 0.6430% $246,076
10121 Coos CUITV Elec Coon $. 0.2194% 0.3797% 0.5991% $229 267
10378 Coulee Dam City of $. 0.0000% 0.0000% 0.0000% $.
10123 Cowlitz Countv PUD # 1 $565578,431 9.0068% 0.0000% 9.0068% $3446,817
10070 Dedo Citv of $. 0.0000% 0.0000% 0.0000% $-
Douglas Electric $. 0.1063% 0.1690% 0.2753% $105,338
10136 Coo'-:;erative
10071 Drain, Citv of $3,132,153 0.0499% 0.0000% 0.0499% $19,088
10142 East End Mutual Electric $. 0.0000% 0.0000% 0.0000% $.
10144 Eatonville Town of $3813,087 0.0607% 0.0000% 0.0607% $23,238
10072 Ellensburp Citv of $28 744,653 0.4578% 0.0000% 0.4578% $175179
10156 Elmhurst Mutual P & L $. 0.0000% 0.0000% 0.0000% $.
10157 Emerald PUD $61 786661 0.9839% 0.0000% 0.9839% $376,548
10158 EnerJ1V Northwest $3 349 802 0.0533% 0.0000% 0.0533% $20415
Eugene Water & Electric $91,739,953 1.4610% 2.4328% 3.8938% $1,490,101
10170 Board
10172 Fairchild AFB $9,921,598 0.1580% 0.0000% 0.1580% $60,465
10173 Fall River Elec COOD $. 0.1217% 0.2765% 0.3983% $152407
10174' Farmers Electric Comnanv $. 0.0000% 0.0000% 0.0000% $.
.
10177 Fe~CountvPUD#1 $11,137,412 0.1774% 0.0000% 0.1774% $67,875
10179 Flathead Elec COOD $99 778,075 1.5890% 0.0000% 1.5890% $608,080
llPB-12322
Exhibit B, PF-02 Customer Percentages and Customer-Specific PF-02 Refunds
20f6
Corrected
Non-Slice
BPA Corrected N on- PF-02 PF-02 Customer
Customer Slice PF -02 Revenue Slice % Customer Specific PF-02
ID Number BPA Customer Name Revenues Share Share Percentae:e Refund
10074 Forest Grove, Citv or $27,753 860 0.4420% 0.0000% 0.4420% $169141
10183 Franklin Countv PUD # 1 $28,141,565 0.4482% 0.7851% 1.2333% $471,954
10186 Glacier Elec COOD $. 0.0000% 0.0000% 0.0000% $.
10190 Grant COlln'" PUD #2 $188,058,986 2.9948% 0.0000% 2.9948% $1,146092
10191 Gravs Harbor PUD # 1 $47,553665 0.7573% 1.1681% 1.9254% $736,828
10197 Harnev Elee Coon $14994607 0.2388% 0.0000% . 0.2388% $91 382
10597 Herrniston, Citv or $16,436,038 0.2617% 0.0000% 0.2617% $100,167
10076 Revburn Ci'" of $8,295 872 0.1321% 0.0000% 0.1321% $50 558
10202 Hood River Elec Coon $14732263 0.2346% 0.0000% 0.2346% $89 783
10203 Idaho Coun'" L & P $6,400,997 0.1019% 0.0000% 0.1019% $39010
10204 ldaho Falls Power $27899481 0.4443% 0.6931 % 1.1374% $435271
10209 Inland P & L $. 0.0000% 0.0000% 0.0000% $.
10230 Kittitas Countv PUD # 1 $7886 149 0.1256% 0.0000% 0.1256% $48061
10231 Klickilat Countv PUD # 1 $35 974 119 0.5729% 0.0000% 0.5729% $219238
10234 Kootenai Electric Coon $. 0.0000% 0.0000% 0.0000% $.
10235 Lakeview L & P (W A' $42 983 094 0.6845% 0.0000% 0.6845% $261 953
10236 Lane Countv Elec COOD $. 0.1578% 0.2450% 0.4028% $154159
10237 Lewis Countv PUD # I $118,233668 1.8829% 0.0000% 1.8829% $720 554
10239 Lincoln Elee Coon 1M" $. 0.0000% 0.0000% 0.0000% $.
10242 Lost River Elee Coon $. 0.0423% 0.0904% 0.1327%, $50,765
10244 Lower Vallev EnerlN $. 0.0000% 0.0000% 0.0000% $.
10246 Mason COlln'" PUD # I $8,547,681 0.136]% 0.0000% 0.1361% $52,092
10247 Mason Countv PUD #3 $89,282,630 1.4218% 0.0000% 1.4218% $544 117
10078 MeClea~ Ci'" of $5837540 0.0930% 0.0000% 0.0930% $35576
10079 MeMinnville, Citv or $97,396 893 1.5510% 0.0000% 1.5510% $593,568
10256 Midstale Elec COOD $47,133494 0.7506% 0.0000% 0.7506% $287 247
llPB-12322
Exhibit B, PF-02 Customer Percentages and Customer-Specific PF-02 Refunds
30f6
Corrected
Non-Slice
BPA Corrected Non- PF-02 PF-02 Customer
Customer Slke PF -02 Revenue Slice % Customer Specific PF-02
ill Number BPA Customer Name Revenues Share Share Percentae:e Refund
10081 Milton Freewater, Cirv of $12628,309 0.2011% 0.0000% 0.2011% $7696]
10080 Milton Citv of $8812,635 0.1403% 0.0000% 0.1403% $53 707
10082 Minidoka Citv of $. 0.0000% 0.0000% 0.0000% $.
10258 Mission VaUev $. 0.0000% 0.0000% 0.0000% $.
]0259 Missoula Elee Coon $- 0.0000% 0.0000% 0.0000% $.
]0260 Modern Elee Coon $. 0.0000% 0.0000% 0.0000% $.
10083 Monmouth, City of $9,780,069 0.1557% 0.0000% 0.1557% $59,603
Nespelem Valley Elec $5,799,09] 0.0924% 0.0000% 0.0924% $35,342
10273 Coon
10278 Northern Liohts $. 0.1060% 0.2465% 0.3525% $134905
Northern Wasco County $27,761,184 0.4421% 0.0000% 0.4421% $169,186
10279 PUD
Ohop Mutual Light $- 0.0000% 0.0000% 0.0000% $.
]0284 Comnanv
Okanogan County Elec $. 0.0316% 0.0548% 0.0864% $33,056
10285 Coon
,
10286 Okanooan Countv PUD # 1 $18537,703 0.2952% 0.4951% 0.7903% $302 445
10288 OrcasP& L $. 0.0000% 0.0000% 0.0000% $.
]0291 Orepon Trail Coon $87 898 936 1.3998% 0.0000% 1.3998% $535 684
10294 Pacific Counru PUD #2 $43,225,744 0.6884% 0.0000% 0.6884% $263 432
10304 Parkland L & W $. 0.0000% 0.0000% 0.0000% $.
Pend Oreille County PUD $11,873,709 0.1891% 0.3819% 0.5710% $218,512
10306 #]
]0307 Peninsula Lioht Comnanv $79460 229 1.2654% 0.0000% 1.2654% $484 256
10086 Plummer, Ciruof $4,636,078 0.0738% 0.0000% 0.0738% $28,254
10298 PNGC $150259824 0.0000% 0.0000% 0.0000% $.
10087 Port Am1'e1es Cirv of $8486],330 1.35]4% 0.0000% 1.35]4% $517172
10706 Port of Seattle $. 0.0000% 0.0000% 0.0000% $.
IlPB-]2322
Exhibil B, PF-02 Customer Percenlages and Customer-Specific PF-02 Refunds
40f6
Corrected
Non-Slice
BPA Corrected Non- PF-02 PF-02 Customer
Customer Slice PF -02 Revenue Slice % Customer Specific PF-02
ill Number BPA Customer Name Revenues Share Share Percentae:e Refund
Puget Sound Naval $35,603,669 0.5670% 0.0000% 0.5670% $216,980
10326 Shiovard -ffi~emerton)
10331 Raft River Elec Coon $. 0.0685% 0.1449% 0.2134% $81 677
10333 Ravalli County Elec COOD $. 0.0000% 0.0000% 0.0000% $.
10089 Richland Citv of $102334128 1. 6297% 0.0000% 1.6297% $623657
10338 Riverside Elec Comoanv $. 0.0000% 0.0000% 0.0000% $.
10091 Runert Citv of $11968,975 0.1906% 0.0000% 0.1906% $72 943
10342 Salem Elec Coon $56194756 . 0.8949% 0.0000% 0.8949% $342 469
10343 Salmon River Elec Coon $. 0.1288% 0.2023% 0.3311% $126,695
10349 Seattle Citv Liaht $167453,974 2.6667% 4.6676% 7.3343% $2 806 762
10352 Skamania County PUD # I $18124789 0.2886% 0.0000% 0.2886% $110458
Snohomish County PUD $407,609,649 6.4912% 4.9929% 11.4841% $4,394,837
10354 #1
10094 Soda Snrinos, City of $. 0.0000% 0.0000% 0.0000% $.
10360 South Side Electric $. 0.0000% 0.0000% 0.0000% $-
10363 Snrinafield Utllitv Board $80523,560 1.2823% 0.0000% 1.2823% $490 736
10379 Steilacoom Town of . $5 829 528 0.0928% 0.0000% 0.0928% $35 527
10095 Sumas, City of $3 844,352 0.0612% 0.0000% 0.0612% $23 429
10369 Sumrise Vallpv E1ec Coon $13419,017 0.2137% 0.0000% 0.2137% $81 780
10370 Tacoma Public Utilities $488819093 7.7844% 0.0000% 7.7844% $2979021
10371 Tanner Elec Cooo $9,748,304 0.1552% 0.0000% 0.1552% $59,409
10376 Tillamook PUD # I $47179173 0.7513% 0.0000% 0.7513% $287 525
10097 Trov Citv of $. 0.0000% 0.0000% 0.0000% $.
10406 U.S. DOE Albanv $542,195 0.0086% 0.0000% 0.0086% $3 304
U.S. Naval Station, Everett $1,769,301 0.0282% 0.0000% 0.0282% $10,783
10408 I (Jim Creek)
u.s. Naval Submarine $24,866,971 0.3960% 0.0000% 0.3960% $151,547
10409 Base, Banoor
IIPB-12322
Exhibit B, PF-02 Cttstomer Percentages and Customer. Specific PF-02 Refunds
50f6
Corrected
Non-Slice
BPA Corrected N on- PF-02 PF-02 Customer
Customer Slice PF -02 Revenue Slice % Customer Specific PF -02
InN-umber BP A Customer Name Revenues Share Share Percenta.e . Refund
10388 Umatilla Elec Coop $. . 0.5384% 0.9194% 1.4578% $557,880
Umpqua Indian Utility $2,573,041 0.0410% 0.0000% 0.0410% $15,681
10482 Cooperative
10391 United Electric Coon $23,654, II 0 0.3767% 0.0000% 0.3767% $144,156
10399 USBIA Wapato $828,235 0.0132% 0.0000% 0.0132% $5,048
10426 USDOE.Richland $31,732,310 0.5053% 0.0000% 0.5053% $193,387
10434 Vera Irrigation District $31257,715 0.4978% 0.0000% 0.4978% $190,495
10436 Villilante Elec COOD $. 0.0000% 0.0000% 0.0000% $.
Wahkiakum County PUD $5,335,683 0.0850% 0.0000% 0.0850% $32,517
10440 #1
10442 Wasco Elec CooP $. 0.0000% 0.0000% 0.0000% $.
11680 Weiser City of $. 0.0000% 0.0000% 0.0000% $.
Wells R ural Electric $63,749,308 1.0152% 0.0000% 1.0152% $388,509
10446 ComDanv
10448 West Oregon Elec CooP $. 0.0488% . 0.0791 % 0.1279% $48 959
10451 Wha'com County PUD # I $29,532,452 0.4703% 0.0000% 0.4703% $179,980
10502 Yakama Power $467547 0.0074% 0.0000% 0.0074% $2 849
TOTAL $4 858 550,145 77.3722% 22.6278% 100.0000% $38269,000
IIPB-12322
Exhibit B, PF-02 Customer Percentages and Customer-Specific PF-02 Refunds
60f6
Exhibit C
RENEWABLE ENERGY CE~TIFIcATES AND CARBON ATTRIBUTES TO IOUS
1. DEFINITIONS
1.1
"Carbon Credits" means Environmental Attributes, consisting of greenhouse gas
emission credits, certificates, or similar instruments, that BP A determines are
associated with resources whose costs are recovered in Tier] Rates, excluding Initial
Tier I Renewable Projects.
1.2
"Current Tier I REcs" means the REcs that BPA determines are attributable to
electrical generation from the Initial Tier 1 Renewable Projects.
1.3
"Environmental Attributes" means the current or future credits, benefits, emISSIon
reductions, offsets, and allowances attributable to the generation of energy from a
resource. Environmental Attributes do not include the tax credits associated with
such resource. One megawatt-hour of energy generation from a resource IS
associated with one megawatt-hour of Environmental Attributes.
1.4
"Environmentally Preferred Power RECS" or ".EPP REcs" means the portion of
BP A's Tier I RECs that is equal to an amount of up to 130 percent of the annual
average of equivalent environmentally preferred power (EPP) contracted for as of
October 1, 2009, for FY2010 and FY20ll under Subscription power sales contracts
containing rights to Environmental Attributes through FY2016, as determined by
BP A to be necessary to administer such rights.
1.5
"Renewable Energy Certificates" or "RECs" means the certificates, documentation,
or other evidence that demonstrates, in the tracking system selected under section 5
of this exhibit, the ownership of Environmental Attributes.
1.6
"Initial Tier I Renewable Projects" means the following projects existing as of
December 5, 2008:
Project Capacity (MW)
Foote Creek I 15.32
Foote Creek II 1.8
State/ine 89.76
Condon 49.8
Klondike I 24
Klondike III 50
Ashland Solar 0.015
1.7
"RPSB" means, with respect to each IOU for each year of a Rate Period, the IOU-
Specific ~EP Settlement Benefit Amounts for such IOU as calculated pursuant to
sections 6.1. I and 6.1.2 of the Settlement Agreement and without regard to any
IIPB-12322
100
adjustments to IOU-Specific REP Settlement Benefit Amounts pursuant to section
6.2 of the Settlement Agreement.
1.8 "Tier 1 RECs" means the RECs that BP A determines are attributable to resources
whose output is used to establish Tier I System Capability, as Tier I System
Capability is defined in the TRM, excluding the Initial Tier 1 Renewable Projects.
1.9 "Tier 2 RECs" means the RECs attributable to generation of the resources whose
costs are allocated to a given Tier 2 Cost Pool in accordance with the TRM.
1.10 "Transferable RECs" means Tier I RECs exclusive of Current Tier 1 RECs.
2. IOU'S SHARE OF TRANSFERABLE RECS
Beginning April 15, 2012, and by April 15 every year thereafter over the Payment Period,
BPA will transfer to each IOU, or manage for such IOU in accordance with section 4 of this
exhibit, at no charge or premium, a share of the Transferable RECs (or the revenues
generated by the sale of such) equal the Transferable RECs for such year multiplied by 14%,
the product of which is then multiplied by a fraction, the numerator of which is such IOU's
RPSB for such year and the denominator of which is the total of the RPSBs of all IOU s for
such year; provided, however, that if any Non-Settling Entity does not amend Exhibit H of
its CHWM Contract by adopting the replacement form of Exhibit H attached to this
Settlement Agreement, then BP A will convey to the IOUs the value, as determined by BP A,
of the Non-Settling Entities' share of the RECs that would otherwise have been available for
transfer to the IOUs by paying to the IOUs the value of such RECs.
The amount of Transferable RECs available to BPA to transfer or manage shall be subject to
available Transferable RECs inventory.
3. TIER 2 RECS
BP A will not transfer to, or manage for, any IOU any Tier 2 RECs.
4. TRANSFER, TRACKING, AND MANAGEMENT OF RECS
Subject to BPA's determination that the commercial renewable energy tracking system
WREGIS is adequate as a tracking system, BP A will transfer to each IOU its share of
Transferable RECs via WREGIS or its successor. If, during the Payment Period, BP A
determines in consultation with customers that WREGIS is not adequate as a tracking
system, then BP A may change commercial tracking systems with one year advance notice to
each IOU. In such case, a comparable process for BPA to provide each IOU its RECs will
be established.
Starting on July 15, 201 I, and by July 15 prior to each Rate Period through the Payment
Period, each IOU will notify BP A which one of the following two options it chooses for the
transfer and management of such IOU's share of Transferable RECs for each upcoming Rate
Period:
(i) BPA will transfer such IOU's Transferable RECs into its own WREGIS account,
which must be established by such IOU; or
(ii) Such IOU gives BP A the authority to market such IOU's Transferable RECs on such
IOU's behalf BPA will annually in May pay such IOU its pro rata share of all
revenues generated by sales of Transferable RECs for the prior calendar year.
lIPB-12322
Exhibit C, Renewable Energy Certificates And Carbon Attributes To 10Us
20f3
Ifany IOU fails to notity BPA of its election by July 15 before the start of each Rate Period,
then such IOU will be deemed to have elected the option in section 4(ii) of this exhibit.
Any Transferable RECs BP A transfers to an IOU on April 15 of each year will be limited to
those generated January I through December 31 of the prior year, except that any
Transferable RECs BPA transfers to such IOU by April 15, 2012, will be limited to those
generated October], 2011, through December 3 1,20] I.
5. FEES
Each IOU will be responsible for all WREGIS (or any successor commercial tracking
system) fees it incurs associated with its Transferable RECs.
6. IOU'S SHARE OF CARBON CREDITS
If, in any year, BP A conveys the value of Carbon Credits to COUs under their CHWM
Contracts as the Carbon Credits themselves, or revenue credits after BP A markets such
Carbon Credits, then BPA will, at the election of each IOU transfer to such IOU, or manage
for such IOU in a manner comparable to section 4 of this exhibit, at no charge or premium, a
share of the Carbon Credits (or the revenues generated by the sale of such) equal to the
Carbon Credits for such year multiplied by 14%, the product of which is then multiplied by a
fraction, the numerator of which is such IOU's RPSB for such year and the denominator of
which is the total of the RPSBs of all IOUs for such year; provided, however, that if any
Non-Settling Entity does not' amend Exhibit H of its CHWM Contract adopting the
replacement form of Exhibit H attached to this Settlement Agreement, then BPA will convey
to the IOUs the value, as determined by BPA, of the Non-Settling Entities' share of the
Carbon Credits that would otherwise have been available for transfer to the IOUs by paying
to the IOUs the value of such Carbon Credits.
7. BP A'S RIGHT TO TERMINATE TRANSFER OF RECS AND CARBON CREDITS
To the extent necessary to comply with any federal regulation or legislation which addresses
Carbon Credits or any other form of Environmental Attribute(s) and includes compliance
costs applicable to BPA, BPA may, upon reasonable notice to any IOU, terminate such
IOU's contract rights to Transferable RECs under 'section 2 of this exhibit and such IOU's
share of Carbon Credits under section 6 of this exhibit in whole or in part.
llPB-12322
Exhibit C, Renewable Energy Certificates And Carbon Attributes To 10Us
30f3
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Exhibit E
Arbitration Procedures
1. Arbitration Procedures: Modification of Arbitration Procedures
The arbitration provisions set forth in this Exhibit E (the "Arbitration Procedures") will
govern any binding arbitration within the scope of section 9 of the body of Settlement
Agreement. Any provision of these Arbitration Procedures may be modified or
supplemented with respect to a specific arbitration by agreement of all of the Participants.
2. Ri2hts of Notice Recipients to Participate in Arbitration: CballeOl!es to Arbitrabilitv.
2.1 Ri2hts of Participation in Arbitrations Conducted Pursuant to Section 9.2.4(ii)
or 9.3 of the Bodv of the Settlement Agreement.
Any Notice Recipient may participate in an arbitration conducted pursuant to
section 9.2.4(ii) or section 9,3 of the body of the Settlement Agreement only if such
Notice Recipient agrees in writing to be bound, with respect to such arbitration, by
all provisions of the body of the Settlement Agreement applicable to the alleged
breach and all provisions of the Settlement Agreement applicable to such arbitration,
including this Exhibit E and all limitations on the Arbitrator's powers to grant
remedies.
2.2 Ri2hts of Participation in Arbitrations Conducted Pursuant to Section 9.4 of the
Bodv of the Settlement Aueement.
A Notice Recipient may become a Participant in an arbitration conducted pursuant
to section 9.4 of the body of the Settlement Agreement only if (i) upon petition by
such Notice Recipient, the Arbitrator determines that such Notice Recipient has a
direct and substantial interest that will be materially affected by the outcome of the
arbitration, and (ii) such Notice Recipient agrees in writing to be bound, with respect
to such arbitration, by all provisions of the body of the Settlement Agreement
applicable to the alleged breach and all provisions of the Settlement Agreement
applicable to such arbitration, including this Exhibit E and all limitations on the
Arbitrator's powers to grant remedies.
2.3 ChalleOl!eS to Applicabilitv of Arbitration Provisions.
(i)
If legislation as contemplated by section 8 of the body of the
Settlement Agreement is in effect, then, except as provided otherwise
in section 9.3.1 of the body of the Settlement Agreement, a claim by
any Notice Recipient (not including BP A) that the matter(s) identified
in the Dispute Notice are not subject to binding arbitration under the
Settlement Agreement will be a matter for the Arbitrator to decide.
(ii)
If legislation as contemplated by section 8 of the body of the
Settlement Agreement is not in effect, then, irrespective of whether
BPA's Dispute Notice pursuant to section 9.2.3 of the body of the
llPB-12322
10r8
Settlement Agreement states that BP A (a) will not engage in binding
arbitration, or (b) agrees to engage in binding arbitration, a claim by any
Party (not including BPA) that the matter(s) identified in the Dispute
Notice are not subject to binding arbitration under the Settlement
Agreement will be a matter for the Arbitrator to decide. If in its statement
in accordance with section 9.2.3 of the body of the Settlement
Agreement, BP A states that it will not engage in binding arbitration
with respect to the matter(s) identified in the Dispute Notice, the
remedies, if any, with respect to any dispute regarding whether BPA's
decision is consistent with the terms of this Settlement Agreement
will not be determined by the Arbitrator, but will be as provided by
law. In any other case, a Notice Recipient that is not a Party that claims
the matter(s) identified in the Dispute Notice are not subject to binding
arbitration under the Settlement Agreement may elect to have the
arbitrability of the matter(s) decided by the Arbitrator.
3. Additional Requirements When BP A Is a Party to the Arbitration and Legislation
Contemolated bv Section 8 of the Bodv of the Settlement Aereement Is Not in Effect
If legislation as contemplated by section 8 of the Settlement Agreement is not in
effect, then any binding arbitration in which BP A is a Participant must follow all
requirements contained in BPA's Binding Arbitration Policy. Within not more than 45 days
following the date on which BP A delivers or issues the Dispute Notices pursuant to
section 9.2.2 of the Settlement Agreement, the Participants must enter a written agreement
to arbitrate that states: (i) the issue(s) in dispute; (ii) the maximum monetary amount that the
arbitrator may award; (iji) the only type of remedy available is monetary relief and that no
specific performance or other non-monetary relief is available; (iv) money damages are
limited to those allowed under federal contract law, even if the designated maximum award
amount is higher; (v) all Participants will bear their respective arbitration costs and fees,
including all attorney fees and expenses; (vi) no arbitration award may include any award of
another Participant's attorney fees or arbitration costs; and (vii) the arbitration procedures.
Any monetary relief or money damages must also be consistent with section 11 of this
Exhibit E.
4. Selection of Arbitration Panel
If BP A, one or more COU Parties, arid one or more IOUs are all Participants to a dispute
within the scope of section 9 of the Settlement Agreement, they will select a panel of three
arbitrators in accordance with the process specified in section 4. I of this Exhibit E. If a
dispute within the scope of section 9 of the Settlement Agreement involves only two of the
foregoing categories of Participants (that is, only COU Parties and IOUs, or only BP A and
COU Parties, or only BP A and IOUs), then those Participants to the dispute will select two
arbitrators in accordance with the process specified in section 4.2 of this Exhibit E. If a
dispute within the scope of section 9 of the Settlement Agreement solely among two or more
IOUs, then those IOUs that are Participants to the dispute will select their arbitrators in
accordance with the process specified in section 4.3 of this Exhibit E. The panel of
arbitrators selected in accordance with section 4.1, 4.2, or 4.3 of this Exhibit E will be
referred to in these Arbitration Procedures and in section 9 of the Settlement Agreement as
the "Arbitrator."
IIPB-12322
Exhibit E, Arbitration Procedures
20f8
4.1
Process for BPA, COU Parties. and IOUs to Select a Panel of Three Arbitrators
,
Within not more than 45 days following the date on which BP A delivers or issues
the Dispute Notices pursuant to section 9:2.2 of the Settlement Agreement, each of
the Nominating Participants (as defined below) will submit to the other Nominating
Participants a list of the names, together with a brief description of the qualifications,
of five individuals, with experience with electric utility contracts, whom such
Nominating Participant proposes as potential arbitrators for a dispute within the
scope of section 9 of the Settlement Agreement. The Nominating Participants will
then draw straws to determine the order in which the Nominating Participants will
strike names from each others' lists of proposed arbitrators. The Nominating
Participant entitled to take the first turn will then strike one name from one of the
other Nominating Participant's list of proposed arbitrators. The Nominating
Participant entitled to take the second turn will then do likewise, and the Nominating
Participant entitled to take. the third turn will then also do likewise. The Nominating
Participant entitled to take the first turn will then strike another name from one of
the other Nominating Participant's list of proposed arbitrators, and the process of
striking names in this manner will continue until only one name remains on each of
the Nominating Participant's lists. The three individuals whose names remain on
such lists will serve asArbitrator for the dispute. Unless another period is agreed to
by the Nominating Participants, any Nominating Participant that fails to provide its
list of names within 45 days will forfeit its right to submit such a list, and the
arbitrators will be chosen from the remaining list(s) as provided in this section 4.1
and in section 4.2 below. In such event, the Nominating Participants may strike
names from their own lists of proposed arbitrators, if they so choose.
As used in section 4.1 (and section I 1.2, if applicable) of this Exhibit E, the term
"Nominating Participant" means
(i) BPA,
(ii) those COU Parties that are Participants (collectively), or
(iii) those IOUs that are Participants (collectively),
and' collectively means the foregoing Parties, taken together, but in the groupings
identified in items (i), (ii), and (iii) above.
4.2 Process for Subsets of Parties to Select Two Arbitrators Who Then Select a Third
The process of selecting a panel of arbitrators under section 4.2 of this Exhibit E will
be the same as specified in section 4.1 of this Exhibit E, except that
(i) there will be only two Nominating Participants (as described in item (iii)
below), and therefore only two lists of potential arbitrators totaling ten
individuals, and the Nominating Participants will take turns striking names
from each other's lists until only two names remain (one on each
Nominating Participant's list),
(ii) the two names remaining after the process of striking names will serve on the
panel of arbitrators and together will select one additional person (with
IIPB-12322
Exhibit E, Arbitration Procedures
3018
experience with electric utility contracts) to serve as the third member of the
panel that will serve as Arbitrator for the dispute, and
(iii) as used in section 4.2 (and section 11.2, if applicable) of this Exhibit E, the
term "Nominating Participant" means
(a) in a dispute in which Participant Parties are limited to COU Parties
and IOUs (but not BPA),
(I) those COU Parties that are Participants (collectively), or
(2) those IOUs that are Participants (collectively);
(b) in a dispute in which Participant Parties are limited to BPA and COU
Parties (but not IOUs),
(I) BPA, or
(2) those COU Parties that are Participants (collectively),
(c) in a dispute in which Participant Parties are limited to BPA and
IOUs (but not COU Parties),
(I) BPA, or
(2) those IOUs that are Participants (collectively),
and collectively means the foregoing subsets of Parties, taken together as
described in items (a), (b), or (c) above, but in the groupings identified in
subparts (I) and (2), as applicable, of each such item.
4.3 Process for Disoutes InyolYinl! OnlY IOUs.
The process of selecting a panel of arbitrators under section 4.3 of this Exhibit E will
be the same as specified in section 4.1 of this Exhibit E, except that
(i) each IOU will be a Nominating Participant (for purposes of this section 4.3
and for purposes of section 11.2 of this Exhibit E),
(ii) each Nominating Participant will be entitled to submit a list of three
individuals, with experience with electric utility contracts, whom such
Nominating Participant proposes as potential arbitrators,
(iii) if there are only two Nominating Participants, then the Nominating
Participants will take turns striking names from each other's lists until only
two names remain (one on each Nominating Participant's list), the two
individuals whose names remain after the process of striking names will serve
on the panel of arbitrators and together will select one additional person
(with experience with electric utility contracts) to serve as the third member
of the panel that will serve as Arbitrator for the dispute,
ttPB-12322
Exhibit E, Arbitration Procedures
40f8
(iv) if there are three Nominating Participants, then the Nominating Participants
will take turns striking names from each other's lists until only three names
remain, and the three individuals whose names remain at the end of the
striking process will serve as Arbitrator for the dispute, and
(v) if there are four or more Nominating Participants, then the Nominating
Participants will take turns striking names from each other's lists until there
are the same number of proposed arbitrators as there are Nominating
Participants, after which the three arbitrators' names will be selected by a
random process.
5. Consolidation
All disputes concerning the same alleged violation of the Settlement Agreement will be
consolidated into a single arbitration process. The Arbitrator may_consolidate related
disputes.
6. Venue
Any binding arbitration within the scope of section 9 of the Settlement Agreement will be
conducted in Portland, Oregon unless the Participants agree otherwise.
7. Duration of Arbitration Process
All Participants acknowledge and agree that a fundamental purpose for arbitration is the
expedient resolution of disputes; therefore, the Participants will (i) make good faith efforts to
participate in a manner that will facilitate conclusion of the arbitration proceedings within
nine months following the selection of the Arbitrator in accordance with section 4 of this
Exhibit E, and (ii) request that the Arbitrator render a decision within 90 days following the
conclusion of the arbitration proceedings.
8. Prehearinl! Meetinl!
Unless all Participants agree otherwise, within 15 days following selection of the Arbitrator,
the Arbitrator will convene a prehearing meeting, at which each Participant will present a
memorandum stating with specificity the basis of its claims and the issues such Participant
intends to raise. At the prehearing meeting, the Arbitrator will set a schedule for
submissions and hearings consistent with the Arbitrator's powers as set forth in these
Arbitration Procedures.
9. Discovery
9.1 Federal Rules of Civil Procedure.
Except as otherwise provided in section 9.2 of this Exhibit E, discovery will be
governed by the Federal Rules of Civil Procedure, subject to any reasonable
limitations or procedures agreed to by the Participants, or, upon petition by a
Participant, established by the Arbitrator. Such reasonable limitations or procedures
may include time, scope, and grouping of Participants for purposes of discovery.
11 PB-12322
Exhibit E, Arbitration Procedures
50f8
9.2 Limitation on Deoositions.
Depositions may be taken only upon request to the Arbitrator and with the
Arbitrator's approval for good cause shown.
10. Rules of Evideoce
The Arbitrator will apply the Federal Rules of Evidence, but construe them liberally to allow
for the admission of evidence that is helpful in resolving the matter(s) in dispute. Rulings on
the admission of evidence made by the Arbitrator at the hearing will be final, binding, and
not subject to any appeal.
11. Arbitrator's Determinatioo
11.1 Adherence to Terms ofSettJement Al!feement
In any arbitration within the scope of section 9 of the Settlement Agreement, the
Arbitrator must apply the terms of the Settlement Agreement and may not modify,
disregard, or add to the terms of the Settlement Agreement.
11.2 Prooosed Determinations: Arbitrator's Decision
After hearing all of the evidence, the Arbitrator will issue a statement identifying all
of the issues to be resolved in the arbitration. Each Nominating Participant (as
defined in section 4.], 4.2, or 4.3 of this Exhibit E, as applicable) will be entitled to
submit (i) a single, preferred proposal specifying how each of the issues identified by
the Arbitrator should be resolved (the Nominating Party's "Preferred Solution"), and
(ii) one or more alternative resolutions of anyone or more of the identified issues for
the Arbitrator to consider should the Arbitrator determine that no Preferred Solution
submitted by any Nominating Party can be adopted. The Arbitrator will provide an
opportunity for all Participants to submit briefs concerning all Nominating
Participants' Preferred Solutions and alternatives.
After receiving all Nominating Participants' Preferred Solutions and briefs, the
Arbitrator will determine whether one or more Preferred Solutions are consistent
with the Settlement Agreement and these Arbitration Procedures. If the Arbitrator
determines that only one Preferred Solution is consistent with the Settlement
Agreement and these Arbitration Procedures, the Arbitrator will adopt such
Preferred Solution. If the Arbitrator determines that more than one Preferred
Solution is consistent with the Settlement Agreement and these Arbitration
Procedures, the Arbitrator will select and adopt one Preferred Solution from among
the Preferred Solutions that are consistent with the Settlement Agreement and these
Arbitration Procedures. If the Arbitrator determines that no Preferred Solution is
consistent with the terms of the Settlement Agreement and these Arbitrator
Procedures, the Arbitrator may provide such remedies as the Arbitrator determines
are consistent with the terms of the Settlement Agreement and these Arbitrator
Procedures, taking into consideration, as the Arbitrator deems appropriate, the
alternative resolutions proposed by the Participants in their briefs.
IIPB-12322
Exhibit E, Arbitration Procedures
60f8
11.3 Adiustrnents Must Be ProsDective Onlv
If the Arbitrator determines that a Party has received or will receive more or less, or
has paid or will pay more or less, than provided for in the Settlement Agreement, any
recovery of under- or over-payment of Total Settlement Benefits, and any
corresponding adjustments to reflect amounts that should or should not have been
included in COU Parties' Tier I PF Rates, must be implemented solely through
prospective adjustments to (i) IOUs' payments of REP Settlement Benefits (or, if
after the Payment Period, REP benefits), and (ii) COU Parties' power bills, in either
case as necessary to place the Parties in the positions they would have been in had
the Settlement Agreement been performed in accordance with its terms. The
Arbitrator must specifically state any amounts of such prospective adjustments,
including any applicable interest, and such adjustments must be made over a time
period comparable to the time period during which the over- or under-payment
determined by the Arbitrator occurred. With respect to the COU Parties, any
adjustments to their power bills must be proportionate to their contributions. to the
under- or over-payment.
11.4 Further Limitations on Remedies
The Arbitrator may not grant remedies with respect to (i) any IOU to the extent the
Total Settlement Benefits received by such IOU are accordance with this Settlement
Agreement, or (ii) any COU Party to the extent the costs of REP Settlement Benefits
included in such COU Party's Payment Period Rates are in accordance with this
Settlement Agreement. The arbitrator will have no authority to impose penalties on
any Participant.
12. Arbitrator's Determination Final and Bindinl!: No Precedential Effect
12.1 Finalitv
Except as provided in section 12.2 of this Exhibit E, (i) any Arbitrator's
determination in an arbitration conducted pursuant to section 9.3 will be final and
binding on all Notice Recipients for purposes of this Settlement Agreement, and (ii)
any Arbitrator's determination in an arbitration conducted pursuant to section
9.2.4(i) or section 9.4 of this Settlement Agreement will be fmal and binding on all
Participants. Judgment upon the Arbitrator's determination may be entered by any
court with jurisdiction. In delivering his or her determination, the Arbitrator will
prepare and provide to the Participants findings of fact and conclusions of law
supporting the determination.
12.2 Judicial Review Under.Federal Arbitration Act
Any Participant may seek judicial review of an Arbitrator's determination based only
upon one or more of the grounds referred to in the Federal Arbitration Act, 9 U.S.c.
~1-16 (1988).
12.3 Issue and Claim Preclusion
The Arbitrator's determination will have no preccdential effect with respect to any
matter or proceeding other than the arbitration to which it relates; provided,
IIPB-12322
Exhibit E, Arbitration Procedures
70f8
however, that any issue or claim that was raised in the arbitration by a Participant for
which the Arbitrator has made a determination will be given preclusive effect and
will be deemed res judicata in any subsequent arbitration under these Arbitration
Procedures.
13. Arbitration Costs
13.1 . Responsibility for Costs Absent Arbitrator's Finding of Frivolous Claims or Bad
Faitb
Except as otherwise provided in section 13.2 of this Exhibit E and subject to any
agreement entered into pursuant to section 3, (i) each Participant will be responsible
for its own costs of participating in the arbitration, including legal fees and expenses;
(ii) the Arbitrator may not include in an award to any Participant any other
Participant's cost of participating .in the arbitration or its legal fees and expenses; and
(iii) the Arbitrator will apportion all joint costs of arbitration equally between the
Nominating Participants other than BPA, unless the Nominating Participants have
agreed to apportion joint costs in some other way.
13.2 Arbitrator's Autbority to Impose Fees and Costs for Frivolous Claims or Bad
Faitb
Subject to section 13.3 of this Exhibit E and any agreement entered into pursuant to
section 3, if the Arbitrator finds, with respect to an arbitration conducted pursuant to
section 9 of the Settlement Agreement and this Exhibit E, that a Participant's claims
are frivolous, or that the Participant has acted in bad faith during the course of the
arbitration, the Arbitrator may require such Participant to pay all or a portion of one
or more other Participants' costs of participating in the arbitration, including legal
fees and expenses and its share of joint arbitration costs.
,
13.3 No Arbitration Costs or Otber Participants' Legal Fees and Expenses to Be
Apportioned to BP A
Subject to any agreement entered into pursuant to section 3 of this Exhibit E, the
Arbitrator may not apportion any costs of the arbitration, or any other Participant's
own costs of participating in the arbitration, including legal fees and expenses, to
BPA.
IIPB-12322
Exhibit E, Arbitration Procedures
8of8
Exhibit F
[Not Used]
llPB-12322
_,ol.::..;L
,
<:":_~"'_~~-'.i~'~;~,.),; ~
] of]
,-\.'~~-~'::;
,',.'.,'
Exhibit G
[Not Used]
] ]PB-12322
lof]
Exhibit H
TEMPLATE REPLACEMENT FORM OF EXHIBIT H TO COU PARTIES' CHWM
CONTRACTS
Revision No. <c!I>>, Exhibit H
RENEWABLE ENERGY CERTIFICATES AND CARBON ATTRIBUTES
This revision replaces Exhibit H pursuant to the REP Settlement Agreement Contract No.
IlPB-12322 executed by the Parties, and is effective as of the "Effective Date" of such REP
Settlement Agreement.
1. DEFINITIONS
1.1 "Available Carbon Credits" means (i) eighty-six percent (86%) of the Carbon
Credits that BPA determines are attributable to resources whose output is
used to establish Tier 1 System Capability, as Tier 1 System Capability is
defined in the TRM, excluding the Initial Tier 1 Renewable Projects; and (ii)
one-hundred percent (100%) of the Carbon Credits attributable to electrical
generation from Initial Tier 1 Renewable Projects, excluding Carbon Credits
associated with EPP RECs.
1.2 "Available Tier 1 RECs" means the sum of: (i) eighty-six percent (86%) of the
Future Tier 1 RECs; and (ii) one-hundred percent (100%) of the Current Tier
1 RECs. .
1.3 "Carbon Credits" means Environmental Attributes consisting of greenhouse
gas emission credits, certificates, or similar instruments.
1.4 "Current Tier 1 RECs" means Tier 1 RECs that BP A determines are
attributable to electrical generation from Initial Tier I Renewable Projects,
excluding EPP RECs.
1.5 "Environmental Attributes" means the current or future credits, benefits,
emission reductions, offsets and allowances attributable to the generation of
energy from a resource. Environmental Attributes do not include the tax
credits associated with such resource. One megawatt-hour of energy
generation from a resource is associated with one megawatt-hour of
Environmental Attributes.
1.6 "Environmentally Preferred Power RECS" or "EPP RECs" means the portion
of the' Current Tier I RECs that is equal to an amount of up to 130 percent of
the annual average of equivalent environmentally preferred power (EPP)
contracted for as of October 1, 2009, for FYs 2010 and 2011 under
Subscription power sales contracts containing rights to Environmental
A ttribu tes through FY 2016, as determined by BP A to be necessary to
administer such rights.
(<#1/-))PB-t4#l###1l, ((Customer Name))
I of 4
1.7 "Future Tier 1 RECs" means Tier 1 RECs that BP A determines are
attributable to resources whose output is used to establish Tier 1 System
Capability, as Tier 1 System Capability is defined in the TRM, excluding the
Initial Tier 1 Renewable Projects.
1.8 "Initial Tier 1 Renewable Projects" means the following projects existing as of
the Effective Date of the "Customer Name>>'s CHWM Contract:
Proieet Capacity (MW)
Foote Creek I 15.32
Foote Creek II 1.8
Statehne 89.76
Condon 49.8
Klondike I 24
Klondike III 50
Ashland Solar 0.015
1.9 "Renewable Energy Certificates" or "RECs" means the certificates,
documentation, or other evidence that demonstrates, in the tracking system
selected under section 5 of this exhibit, the ownership of Environmental
Attributes.
I. 10 "Tier 1 RECs" means the sum of the Current Tier 1 RECs and Future Tier 1
RECs.
. 1.11 "Tier 2 RECs" means the RECs attributable to generation ofthe resources
whose costs are allocated to a given Tier 2 Cost Pool in accordance with the
TRM.
2. BPA'S TIER 1 REC INVENTORY
BP A shall maintain a list on a publicly accessible BP A website and shall periodically
update it. This list will include any then-current resources that BP A has
determined have Tier 1 RECs attributable to them. BPA shall also include on this
list its inventory of then-current resources that BPA has determined have Available
Tier 1 RECs (and Available Carbon Credits). BPA shall calculate its Available
Tier 1 RECs and Available Carbon Credits annually and after-the-fact based on
energy generated by listed applicable resources during the previous calendar year.
3. <<CUSTOMER NAME>>'S SHARE OF TIER I RECS
Beginning April 15, 2012, and by April 15 every year thereafter over the term of this
Agreement, BPA shall transfer to "Customer Name>>, or manage in accordance with
section 5 of this exhibit.. at no additional charge or premium beyond "Customer
Name))'s payment ofthe otherwise applicable Tier 1 Rate, a pro rata share of
Available Tier 1 RECs based on <<Customer Name))s RHWM divided by the total
RHWMs of all holders of CHWM Contracts.
((i#/I>PB-(<#####)), ((Customer Name))
Revision No. <<#", Exhibit H, Renewable Energy Certificates And Carbon Attributes
2 of 4
The amount of Available Tier 1 RECs available to BPA to transfer or manage shall
be subject to available Available Tier I REC inventory.
4. TIER 2 RECS
If "Customer Name>> chooses to purchase Firm Requirements Power at a Tier 2 Rate,
and there are RECs which BPA has determined are attributable to the resources
whose costs are allocated to the Tier 2 Cost Pool for such rate, then beginning
April 15 ofthe year immediately following the first Fiscal Year in which "Customer
Name>>'s Tier 2 purchase obligation commences, and by April 15 every year
thereafter for the duration of "Customer Name>>'s Tier 2 purchase obligation, BPA
shall, based on <<Customer Nanle))'S election pursuant to section 5 of this exhibit,
transfer to or manage for "Customer Name>> a pro rata share of applicable Tier 2
RECs generated during the previous calendar year. BP A shall, for transferred
RECs, provide "Customer Name>> with a letter assigning title of such Tier 2 RECs to
<<Customer Name>). The pro rata share of Tier 2 RECs BPA transfers to <<Cust.omer
Name>> shall be the ratio of "Customer Name>>'s amount of power purchased at the
applicable Tier 2 Rate to the total amount of purchases under that Tier 2 Rate.
5. TRANSFER, TRACKING, AND MANAGEMENT OF RECS
Subject to BP A's determination that the commercial renewable energy tracking
system WREGIS is adequate as a tracking system, BP A shall transfer "Cust.omer
Name>>'s share of Available Tier 1 RECs, and Tier 2 RECs if applicable, to <<Customer
Name>> via WREGIS or its successor. If, during the term of this Agreement, BPA
determines in consultation with customers that WREGIS is not adequate as a
tracking system, then BPA may change commercial tracking systems with one year
advance notice to "Cust.omer Name>>. In such case, the Parties shall establish a
comparable process for BPA to provide <<Customer Name>> its Available Tier 1 and
Tier 2 RECs.
Starting on July 15, 2011, and by July 15 prior to each Rate Period through t.he term
of this Agreement, "Customer Name>> shall notify BPA which one of the following
three options it chooses for the transfer and management of "Customer Name>>'s
share of Available Tier 1 RECs, and Tier 2 RECs if applicable, for each upcoming
Rate Period:
(1) BPA shall transfer "Customer Name>>'s Available Tier 1 and Tier 2 RECs into
<<Customer Name>>'s own WREGIS account, which shall be established by
((Customer Name)); or
(2) BPA shall transfer "Customer Name>>'s Available Tier 1 and Tier 2 RECs into
a BPA-managed WREGIS subaccount. Such subaccount shall be established
by BPA on "Customer Name>>'s behalf and the terms and conditions of which
shall be determined by the Parties in a separate agreement; or
(3) "Customer Name>> shall give BPA the authority to market "Customer
Name>>'s Available Tier 1 and Tier 2 RECs on "Customer Name>>'s behalf.
BPA shall annually credit "Customer Name>> for "Customer Name>>'s pro rata
(4!#)}PB-(<#####)), ((Customer Name))
Revision No. <<#>>, Exhibit H, Renewable Energy Certificates And Carbon Attributes
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share of all revenues generated by sales of Available Tier 1 and Tier 2 RECs
from the same rate pool on its April bill, issued in May.
If "Customer Namp>> fails to notify BP A of its election by July 15 before the start of
each Rate Period, then <<Customer Name>> shall be deemed to have elected the option
in section 5(3) of this exhibit.
Any Available Tier 1 and Tier 2 RECs BPA transfers to <<Custompr Name>> on
April 15 of each year shall he limited to those generated January 1 through
December 31 of the prior year, except that any Available Tier 1 and Tier 2 RECs
BPA transfers to "Customer Name>> by April 15, 2012, shall be limited to those
generated October I, 2011, through December 31, 20]].
6. FEES
BPA shall pay any reasonable fees associated with: (I) the provision of <<Customer
Name)>'s Available Tier I and Tier 2 RECs and (2) the establishment of any
subaeeounts in <<Customer Name>>'s name pursuant to sections 5(1) and 5(2) of this
exhibit. <<Cust.omer Name>> shall pay all other fees associated with any WREGIS or
successor commercial tracking system, including WREGIS retirement, reserve, and
export fees.
7. CARBON CREDITS
In the absence of regulations or legislation concerning carbon credits and directly
affecting BPA, BPA intends to convey the value of any future Available Carbon
Credits to "Customer Name)) on a pro rata basis in the same manner as described for
Available Tier] RECs and Tier 2 RECs in sections 3 and 4 of this exhibit. This
) value may be conveyed as: (1) the Available Carbon Credits themselves; (2) a
revenue credit after BPA markets such Available Carbon Credits; or (3) the ability to
claim that power purchases at the applicable PF rate are derived from certain
federal resources.
8. BPA'S RIGHT TO TERMINATE <<CUSTOMER NAME))'S RECS AND/OR
CARBON CREDITS
To the extent necessary to comply with any federal regulation or legislation which
addresses Carbon Credits or any other form of Environmental Attribute(s) and
includes compliance costs applicable to BPA, BPA may, upon reasonable notice to
<<Customer Name)), terminate ~<Customer Name))'s contract rights to Available Tier 1
RECs under section 3 of this exhibit and/or "Customer Name))'s pro rata share of
Available Carbon Credits under section 7 of this exhibit.
{<.##)}PB.(<#####n, ({Customer Name))
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