This Consulting Services Agreement involves
Title: ELECTRIC SERVICE AGREEMENT
IDAHO POWER COMPANY
HOKU MATERIALS, INC
Industry: Electronic Instr. and Controls Sector: Technology
ELECTRIC SERVICE AGREEMENT
IDAHO POWER COMPANY
HOKU MATERIALS, INC
THIS AGREEMENT FOR ELECTRIC SERVICE is executed on ___ 9/17/2008 _____ by HOKU MATERIALS, INC, a Delaware Corporation (“Hoku”) and IDAHO POWER COMPANY, an Idaho Corporation (“Idaho Power”). In consideration of the mutual covenants hereinafter set forth, the parties hereby agree as follows:
SECTION 1 - SPECIAL CONTRACT
1.1 This Agreement is a Special Contract as described in Idaho Power’s Schedule 19.
SECTION 2 - DEFINITIONS
When used in this Agreement:
2.1. “Commission” shall mean the Idaho Public Utilities Commission or its successor agency.
2.2. “Construction Agreement” shall mean that certain Agreement for Construction of Hoku Electric Substation and Associated Facilities dated as of December 28, 2007, by and between Hoku and Idaho Power, as such may be amended from time to time.
2.3. “Contract Load Factor” shall mean 90 percent for purposes of establishing the energy blocks for monthly billing.
2.4. “Embedded Date” shall mean June 1, 2013.
2.5. “Embedded Rate” shall mean the demand and energy rates detailed in the Company’s then-effective Schedule 19T.
2.6. “Excess Demand” shall mean the average kilowatts supplied during the coincident 15-consecutive-minute period of maximum use each day, adjusted for Power Factor, which exceeds the Total Contract Demand.
2.7. “Excess Energy” shall mean any kilowatt-hours of energy supplied to the Hoku Facility during the monthly billing period as measured by the metering equipment located at the Points of Delivery that exceeds the sum of the First Block Energy and the Second Block Energy.
2.8. “First Block Contract Demand” shall mean the monthly number of kilowatts Idaho Power has agreed to make available to the Hoku Facility in accordance with the Scheduled Contract Demand in Section 6.
2.9. “First Block Energy” shall mean the kilowatt-hours determined by multiplying the First Block Contract Demand by the number of hours in the billing period multiplied by the Contract Load Factor.
2.10. “Hoku Facility” shall mean the Hoku Polysilicon Production complex located on One Hoku Way, Pocatello, Idaho.
2.11. “Interconnection Facilities” shall mean all facilities which are reasonably required by Prudent Electrical Practices and the National Electric Safety Code to interconnect and deliver electrical power and energy to the Hoku Facility, including, but not limited to, transmission facilities, substation facilities and metering equipment.
2.12. “Minimum Billed Energy” shall mean the number of kilowatt-hours determined by multiplying 50% of the Total Contract Demand for the billing month by the number of hours in the billing month at the Contract Load Factor.
2.13. “Points of Delivery” shall mean the locations specified in paragraph 5.2 where the electrical facilities owned by Hoku are interconnected to the electrical facilities owned by Idaho Power and where power and energy are delivered by Idaho Power for the purpose of providing electrical service for the operations of the Hoku Facility.
2.14. “Power Factor” shall mean the percentage obtained by dividing the maximum demand recorded in kW by the corresponding kilovolt-ampere (kVa) demand established by Hoku.
2.15. “Prudent Electrical Practices” shall mean those practices, methods and equipment that are commonly and ordinarily used in electrical engineering and utility operation to operate electrical equipment and deliver electric power and energy with safety, dependability, efficiency and economy.
2.16. “Schedule 19” shall mean the Company’s then effective Idaho Retail Tariff Schedule 19T.
2.17. “Schedule 32” shall mean the Hoku tariff schedule of rates and charges or its successor schedules.
2.18. “Scheduled Contract Demand” is defined in Section 6.1.1 below.
2.19. “Second Block Contract Demand” shall mean 25,000 kilowatts.
2.20. “Second Block Energy” shall mean the total kilowatt-hours supplied to the Hoku Facility during the monthly billing period as measured by the metering equipment located at the Points of Delivery less the First Block Energy, but no greater than 25,000 kilowatts multiplied by the number of hours in the billing period multiplied by the Contract Load Factor.
2.21. “Total Contract Demand” shall mean the sum of the First Block Contract Demand and the Second Block Contract Demand as specified in Section 6, and as such may be modified pursuant to Section 6.2 below.
2.22. “Transformer Losses” shall mean energy losses resulting when a transformer changes the voltage level of alternating current electricity. Transformer losses will be accounted for in the initial metering installation.
SECTION 3 - TERM OF AGREEMENT
3.1 This Agreement shall become effective as provided in paragraph 15.1 and remain in effect through the Embedded Date and will be automatically renewed thereafter until either Hoku or Idaho Power terminates this Agreement as provided in paragraph 4.1.
3.2 It is the intention of the parties that following the Embedded Date, the parties shall enter into a new Special Contract whereby Hoku shall pay energy and demand rates that are equal to the lesser of the then-applicable Schedule 19 rate or the average of the contract rates in Idaho Power’s then-effective other “Special Contracts”. These Special Contract rates will remain in effect on an interim basis until the next final Commission order in a general rate case proceeding.
3.3 Service under this Agreement will commence June 1, 2009.
SECTION 4 - TERMINATION
4.1 Notice of Termination: After the Embedded Date, either party to this Agreement shall have the right to terminate this Agreement by delivering written notice of termination to the other party. The effective date of termination will be specified in the termination notice, but such effective date cannot be earlier than 12 months after the date of the delivery of the notice of termination. If both parties give notice of termination, the earliest effective date will prevail. If the effective date of a termination occurs before the new Special Contract is effective between the Parties as described in Section 3.1 above, then the applicable energy and demand rates shall be the Embedded Rate.
SECTION 5 - SERVICES TO BE PROVIDED
5.1 Supply Obligation: In accordance with Prudent Electrical Practices and the provisions of this Agreement, Idaho Power will furnish Hoku’s total requirements for electric power and energy at the Hoku Facility. Hoku will not resell any portion of the power and energy furnished under this Agreement.
5.2 Points of Delivery: Electric power and energy shall be delivered by Idaho Power at each point generally described as the load side terminals of the substation transformer 13.8 kilovolt disconnect switches at the Hoku Facility.
5.3 Adjustment for Transformer Losses: Metering on the load side of the substation transformers will be adjusted for Transformer Losses.
5.4 Description of Electric Service: Idaho Power shall supply three-phase, 60 hz alternating current at nominal 13,800 volts, with a maximum steady state variation of plus or minus five percent (5%) under normal system conditions. Consistent with Prudent Electrical Practices, Idaho Power will operate within the capability of its existing system to minimize voltage level fluctuations, the normal frequency variation to be within plus or minus 0.05 hz on a 60 hz base.
5.5 Available Capacity: Idaho Power will make power available to Hoku in an amount equal to the kilowatts of Total Contract Demand shown in Section 6.1.1.
5.6 Request for Proposals: During the initial term of the agreement, at Hoku’s request, Idaho Power will use commercially reasonable efforts to obtain proposals to supply power to meet Hoku’s summer loads not served by Idaho Power. Idaho Power will customize such supply request to match Hoku’s requirements. These additional purchases are subject to Idaho Power’s ability to deliver the power to Hoku and Hoku’s acceptance of the price and terms of the proposals. Hoku is responsible for the full costs of these purchases and any associated transmission and ancillary service expense to transport such purchases to the Hoku Facility.
5.7 Release of First Block Energy: With adequate notice and the written consent of Idaho Power, Hoku may request a release of all or part of its First Block Energy purchase commitment in return for credit on its First Block Energy Charge. The value of the credit will be determined by mutual agreement and will take into consideration the timing of the notice and Idaho Power’s ability to manage any supply commitments made on Hoku’s behalf.
SECTION 6 - CONTRACT DEMAND
6.1 Contract Demand Provisions prior to the Embedded Date: The following provisions apply during the period of time from June 1, 2009 to the Embedded Date, while Hoku is changing its load at the Hoku Facility.