Exhibit 10.69

 

 

 

EXECUTION COPY

JOINT PURCHASE AND SALE AGREEMENT

BETWEEN

IDAHO POWER COMPANY,

AND

PACIFICORP,

 

 

APRIL 30, 2010

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Table of Contents

Page

 

Article I  DEFINITIONS

2

 

1.1

Definitions

2

 

1.2

Other Definitional and Interpretive Matters

11

 

1.3

Joint Negotiation and Preparation of Agreement

12

Article II  PURCHASE AND SALE

12

 

2.1

Purchase and Sale

12

 

2.2

Excluded Assets

13

 

2.3

Assumed Obligations

15

 

2.4

Excluded Liabilities

15

 

2.5

Non-Assignable Assets

18

 

2.6

Consideration

19

 

2.7

[Intentionally omitted.]

21

 

2.8

Proration

21

 

2.9

Time and Place of Closing

22

 

2.10

Closing Deliverables

22

 

2.11

Conditions Precedent to Closing

25

 

2.12

Release of Mortgage Liens or other Encumbrances

27

Article III  REPRESENTATIONS AND WARRANTIES

28

 

3.1

Representations and Warranties of Idaho Power

28

 

3.2

Representations and Warranties of PacifiCorp

30

Article IV  COVENANTS

33

 

4.1

Conditions and Commercially Reasonable Efforts

33

 

4.2

Filings with Governmental Entities

33

 

4.3

Compliance

34

 

4.4

Risk of Loss

34

 

4.5

Maintenance of Substation Facilities

34

 

4.6

Notice

34

 

4.7

Disclosure

35

 

 

 

 

 

 

 

 

 

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Article V  TERMINATION

35

 

5.1

Termination

35

 

5.2

Effect of Early Termination

36

Article VI  INDEMNIFICATION

36

 

6.1

Survival of Representations and Warranties:  Notices of Claims

36

 

6.2

Indemnification

37

 

6.3

Limitations on Indemnification

38

 

6.4

Exclusive Remedies

39

 

6.5

Notice and Participation

39

 

6.6

Net Amount

40

 

6.7

No Set-Off

41

 

6.8

No Release of Insurers

41

 

6.9

Mitigation

41

 

6.10

Survival of Obligation

41

 

6.11

Limitation of Liability

41

Article VII  MISCELLANEOUS PROVISIONS

41

 

7.1

Amendment and Modification

41

 

7.2

Waiver of Compliance; Consents

41

 

7.3

Notices

41

 

7.4

Assignment

42

 

7.5

Governing Law; Exclusive Choice of Forum; Remedies

42

 

7.6

Severability

43

 

7.7

Entire Agreement

43

 

7.8

Expenses

43

 

7.9

Delivery

43

 

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Exhibits

Exhibit A

Description of Hemingway Substation Facilities

Exhibit B

Description of Populus Substation Facilities

Exhibit C

Form of Hemingway Bill of Sale

Exhibit D

Form of Populus Bill of Sale

Exhibit E

Form of Hemingway Assignment and Assumption Agreement

Exhibit F

Form of Populus Assignment and Assumption Agreement

Exhibit G

Form of Hemingway Joint Ownership and Operating Agreement

Exhibit H

Form of Populus Joint Ownership and Operating Agreement

Exhibit I

Form of Hemingway Easement Agreement

Exhibit J

Form of Populus Easement Agreement

Exhibit K

Description of Hemingway Substation Site

Exhibit L

Description of Populus Substation Site

Exhibit M

Form of Hemingway Deed

Exhibit N

Form of Populus Deed

 

Schedules

Schedule 1.1(a)

Hemingway Transferable Permits

Schedule 1.1(b)

Idaho Power’s Knowledge

Schedule 1.1(c)

Idaho Power Permitted Encumbrances

Schedule 1.1(d)

PacifiCorp’s Knowledge

Schedule 1.1(e)

PacifiCorp Permitted Encumbrances

Schedule 1.1(f)

Populus Transferable Permits

Schedule 3.1(e)

Exceptions to Governmental Authorizations Obtained by Idaho Power

Schedule 3.1(f)

PacifiCorp Acquired Assets - Liabilities

Schedule 3.1(g)

PacifiCorp Acquired Assets - Title Exceptions

Schedule 3.1(h)(i)-A

PacifiCorp Acquired Assets - Environmental Permits

Schedule 3.1(h)(i)-B

PacifiCorp Acquired Assets - Environmental Law and Environmental

 

Permit Exceptions

Schedule 3.1(h)(ii)

PacifiCorp Acquired Assets – Violation of Environmental Laws and

 

Environmental Permits

Schedule 3.1(h)(iii)

PacifiCorp Acquired Assets - Releases

Schedule 3.1(h)(iv)

PacifiCorp Acquired Assets – Storage Tanks, etc.

Schedule 3.1(h)(v)

PacifiCorp Acquired Assets – Assumed Obligations Under Environmental

 

Laws

Schedule 3.1(h)(vi)

PacifiCorp Acquired Assets - Environmental Reports

Schedule 3.1(k)

PacifiCorp Acquired Assets – Intellectual Property

Schedule 3.1(l)

Hemingway Substation Facilities Contracts

Schedule 3.2(e)

Exceptions to Governmental Authorizations Obtained by PacifiCorp

Schedule 3.2(f)

Idaho Power Acquired Assets - Liabilities

Schedule 3.2(g)

Idaho Power Acquired Assets - Title Exceptions

Schedule 3.2(h)(i)-A

Idaho Power Acquired Assets - Environmental Permits

Schedule 3.2(h)(i)-B

Idaho Power Acquired Assets - Environmental Law and Environmental

 

Permit Exceptions

 

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Schedule 3.2(h)(ii)

Idaho Power Acquired Assets – Violation of Environmental Laws and

 

Environmental Permits

Schedule 3.2(h)(iii)

Idaho Power Acquired Assets - Releases

Schedule 3.2(h)(iv)

Idaho Power Acquired Assets – Storage Tanks, etc.

Schedule 3.2(h)(v)

Idaho Power Acquired Assets – Assumed Obligations Under

 

Environmental Laws

Schedule 3.2(h)(vi)

Idaho Power Acquired Assets - Environmental Reports

Schedule 3.2(k)

Idaho Power Acquired Assets – Intellectual Property

Schedule 3.2(l)

Populus Substation Facilities Contracts

Schedule 4.2(a)

Idaho Power Required Regulatory Approvals Initiated by Idaho Power

 

prior to the Effective Date

Schedule 4.2(b)

PacifiCorp Required Regulatory Approvals Initiated by PacifiCorp prior 

 

to the Effective Date

 

 

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JOINT PURCHASE AND SALE AGREEMENT

This Joint Purchase and Sale Agreement (this “Agreement”), dated as of April 30,
2010 (“Effective Date”), is made and entered into by and between Idaho Power
Company, an Idaho corporation acting in its capacity as a regulated transmission
provider (“Idaho Power”), and PacifiCorp, an Oregon corporation acting in its
capacity as a regulated transmission provider (“PacifiCorp”).  Each of Idaho
Power and PacifiCorp are sometimes hereinafter referred to individually as
“Party” and collectively as “Parties”.

RECITALS:

WHEREAS, Idaho Power is a transmission provider which owns and operates certain
facilities for the transmission of electric power and energy located in Idaho,
including the Hemingway Substation which is currently under construction (the
“Hemingway Substation”);

WHEREAS, PacifiCorp is a transmission provider which owns and operates certain
facilities for the transmission of electric power and energy located in Idaho,
including the Populus Substation which is currently under construction (the
“Populus Substation”);

WHEREAS, (i) Idaho Power wishes to sell and transfer to PacifiCorp and
PacifiCorp wishes to purchase and accept from Idaho Power an undivided ownership
interest in certain electrical fixtures affixed to the real property located at
the Hemingway Substation (consisting of the electrical fixtures described in
Section I of Exhibit A that are installed at the Hemingway Substation on or
before the Closing Date, the “Hemingway Substation Facilities”), subject to the
terms and conditions set forth in this Agreement; (ii) PacifiCorp wishes to sell
and transfer to Idaho Power and Idaho Power wishes to purchase and accept from
PacifiCorp an undivided ownership interest in certain electrical fixtures
affixed to the real property located at the Populus Substation (consisting of
the electrical fixtures described in Section I of Exhibit B that are installed
at the Populus Substation on or before the Closing Date, the “Populus Substation
Facilities”), subject to the terms and conditions set forth in this Agreement;
and (iii) the Parties desire to enter into and/or deliver to one another certain
Related Documents in connection therewith at or before the Closing
(collectively, the “Contemplated Transaction”); and

WHEREAS, the Parties desire to memorialize the terms and conditions by which
Idaho Power will sell and transfer to PacifiCorp and PacifiCorp will purchase
and accept from Idaho Power an undivided ownership interest in the Hemingway
Substation Facilities, and by which PacifiCorp will sell and transfer to Idaho
Power and Idaho Power will purchase and accept from PacifiCorp an undivided
ownership interest in the Populus Substation Facilities.

NOW THEREFORE, in consideration of the Parties’ respective representations,
warranties, and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Parties, intending to be legally bound, hereby agree as follows:

 

 

                                                                             

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ARTICLE I
DEFINITIONS

1.1              DEFINITIONS.  AS USED IN THIS AGREEMENT, THE FOLLOWING
CAPITALIZED TERMS HAVE THE MEANINGS SPECIFIED IN THIS SECTION 1.1:

“Action” means any demand, action, claim, suit, countersuit, arbitration,
inquiry, subpoena, discovery request, proceeding or investigation by or before
any court or grand jury, any Governmental Entity or any arbitration or mediation
tribunal.

“Affiliate” means, with respect to a Person, each other Person that, directly or
indirectly, controls, is controlled by or is under common control with, such
designated Person; provided, however, that in the case of PacifiCorp,
“Affiliate” means MidAmerican Energy Holdings Company and its direct and
indirect subsidiaries.  For the purposes of this definition, “control”
(including with correlative meanings, the terms “controlled by” and “under
common control with”), as used with respect to any Person, shall mean (a) the
direct or indirect right to cast at least fifty percent (50%) of the votes
exercisable at an annual general meeting (or its equivalent) of such Person or,
if there are no such rights, ownership of at least fifty percent (50%) of the
equity or other ownership interest in such Person, or (b) the right to direct
the policies or operations of such Person.

“Affiliated Group” means any affiliated group within the meaning of Code Section
1504(a) or any similar group defined under a similar provision of law.

“Agreement” has the meaning given to such term in the preamble.

“Business Day” means any day other than Saturday, Sunday, and any day which is a
legal holiday or a day on which banking institutions in New York, New York are
authorized or obligated by Governmental Requirements to close.

“Claims” means any administrative, regulatory, or judicial actions or causes of
action, suits, petitions, proceedings (including arbitration proceedings),
investigations, hearings, demands, demand letters, claims, complaints,
allegations of liability or potential liability or notices of noncompliance or
violation delivered by any Governmental Entity or other Person.

“Closing” has the meaning given to such term in Section 2.9.

“Closing Date” has the meaning given to such term in Section 2.9.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commercially Reasonable Efforts” means the level of effort that a reasonable
electric utility would take in light of the then known facts and circumstances
to accomplish the required action at a then commercially reasonable cost (taking
into account the benefits to be gained thereby).

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“Contract” means any agreement, lease, license, note, evidence of indebtedness,
mortgage, security agreement, understanding, instrument or other arrangement, in
each case, whether written or oral.

“Contemplated Transaction” has the meaning given to such term in the recitals.

“Costs” means, with respect to a Party’s construction of the Hemingway
Substation Facility or the Populus Substation Facility, as applicable, or such
construction on behalf of a Party, the Party’s actual cost of preliminary
surveys and investigation, development, design, and construction of the
facility, including an allowance for funds used during construction and
applicable overheads determined in accordance with the Party’s customary
practices, as calculated in accordance with the Federal Energy Regulatory
Commission’s Uniform System of Accounts.

“Disputed Costs Notice” has the meaning given to such term in Section
2.6(d)(i)(B).

“Effective Date” has the meaning given to such term in the preamble.

“Effective Time” has the meaning given to such term in Section 2.9.

“Encumbrances” means any mortgages, pledges, liens, Claims, charges, security
interests, conditional and installment sale agreements, activity and use
limitations, easements, covenants, encumbrances, obligations, limitations, title
defects, deed restrictions, and any other restrictions of any kind, including
restrictions on use, transfer, receipt of income, or exercise of any other
attribute of ownership.

“Environment” means the indoor or outdoor environment, including any soil, land
surface and subsurface strata, surface waters (including navigable waters,
streams, ponds, drainage basins, and wetlands), groundwater, drinking water
supply, sediments, ambient air (including the air within buildings and the air
within other natural or man-made structures above or below ground), plant and
animal life, and any other natural resource.

“Environmental Claims” means any and all Claims (including any such Claims
involving toxic torts or similar liabilities in tort, whether based on
negligence or other fault, strict or absolute liability, or any other basis)
relating in any way to any Environmental Laws or Environmental Permits, or
arising from the presence, Release, or threatened Release (or alleged presence,
Release, or threatened Release) into the Environment of any Hazardous Materials,
or the result of the handling, transportation or treatment of Hazardous
Materials, including any and all Claims by any Governmental Entity or by any
Person for enforcement, cleanup, remediation, removal, response, remedial or
other actions, or response costs, damages, contribution, indemnification, cost
recovery, compensation, fines or penalties or injunctive relief arising out of
or relating to any Environmental Law or Hazardous Materials or for any property
damage, natural resource damage or personal or bodily injury (including death)
or threat of injury to health, safety, natural resources, or the Environment.

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“Environmental Laws” means all Governmental Requirements (including common law)
relating to pollution or the protection of human health, safety, the
Environment, or damage to natural resources, including Governmental Requirements
relating to Releases and threatened Releases or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of Hazardous Materials.  Environmental Laws include the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
§ 9601, et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. § 136, et seq.; the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments
of 1984, 42 U.S.C. § 6901, et seq.; the Hazardous Materials Transportation Act,
49 U.S.C. § 1801, et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601,
et seq.; the Clean Air Act, 42 U.S.C. § 7401, et seq.; the Federal Water
Pollution Control Act, 33 U.S.C. § 1251, et seq.; the Oil Pollution Act, 33
U.S.C. § 2701, et seq.; the Endangered Species Act, 16 U.S.C. § 1531, et seq.;
the National Environmental Policy Act, 42 U.S.C. § 4321, et seq.; the
Occupational Safety and Health Act, 29 U.S.C. § 651, et seq.; the Safe Drinking
Water Act, 42 U.S.C. § 300f, et seq.; Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. § 11001, et seq.; Atomic Energy Act, 42 U.S.C. §
2014, et seq.; Nuclear Waste Policy Act, 42 U.S.C. § 10101, et seq.; and all
similar or analogous foreign, state, regional or local statutes, secondary and
subordinate legislation, and directives, as in effect and legally binding, and
the rules and regulations promulgated thereunder, and any provisions of common
law providing for any remedy or right of recovery or right of injunctive relief
with respect to Environmental Matters, as these laws, rules and regulations were
in the past or are currently in effect at the relevant time period.

“Environmental Matters” means:  (a) the pollution or destruction of, or loss or
injury to, or any adverse effect upon, the Environment, (b) the protection,
cleanup or restoration of, or removal, remediation or mitigation of conditions
affecting the Environment, (c) any Release or the generation, handling,
transportation, use, treatment or storage of any Hazardous Materials, (d) the
regulation of the manufacture, processing, distribution or use, for commercial
purposes, of chemical substances or radioactive materials, by-products or waste,
or (e) any matter concerning or arising out of the Environment or exposure to
Hazardous Materials.

“Environmental Permits” means all permits, certifications, licenses, franchises,
approvals, consents, notifications, exemptions, waivers or other authorizations
of any Governmental Entity under or with respect to applicable Environmental
Laws.

“GAAP” means generally accepted accounting principles in the United States of
America.

“Good Utility Practice” means any of the practices, methods and acts engaged in
or approved by a significant portion of the electric utility industry during the
relevant time period, or any of the practices, methods and acts which, in the
exercise of reasonable judgment in light of the facts known at the time the
decision was made, would have been expected to accomplish the desired result at
a reasonable cost consistent with good business practices, reliability, safety
and expedition.  Good Utility Practice is not intended to be limited to the
optimum practice, method, or act to the exclusion of all others, but rather to
be acceptable practices, methods, or acts generally accepted in the region,
including those practices required by Federal Power Act Section 215(a)(4), 16
U.S.C. § 824o(a)(4)(2006).

 

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“Governmental Authorizations” means any license, permit, order, approval,
filing, waiver, exemption, variance, clearance, entitlement, allowance,
franchise, or other authorization from or by a Governmental Entity, including
Environmental Permits.

“Governmental Entity” means any federal, state, local or municipal governmental
body; any governmental, quasi-governmental, regulatory or administrative agency,
commission, body or other authority exercising or entitled to exercise any
administrative, executive, judicial, legislative, policy, regulatory or taxing
authority or power.

“Governmental Requirements” means all laws, statutes, ordinances, rules,
regulations, codes and similar acts or promulgations or other legally
enforceable requirements of any Governmental Entity.

“Hazardous Materials” means (a) any chemicals, materials, substances, or wastes
which are now or hereafter defined as or included in the definition of
“hazardous substance,” “hazardous material,” “hazardous waste,” “solid waste,”
“toxic substance,” “extremely hazardous substance,” “pollutant,” “contaminant,”
or words of similar import under any applicable Environmental Laws; (b) any
petroleum, petroleum products (including crude oil or any fraction thereof),
natural gas, natural gas liquids, liquefied natural gas or synthetic gas useable
for fuel (or mixtures of natural gas and such synthetic gas), or oil and gas
exploration or production waste, polychlorinated biphenyls, asbestos-containing
materials, mercury, urea formaldehyde insulation, radioactivity and lead-based
paints; and (c) any other chemical, material, substances, waste, or mixture
thereof which is prohibited, limited, or regulated pursuant to, or that could
reasonably be expected to give rise to liability under, Environmental Laws.

“Hemingway Assignment and Assumption Agreement” has the meaning given to such
term in Section 2.10(a)(ii).

“Hemingway Bill of Sale” has the meaning given to such term in Section
2.10(a)(i).

“Hemingway BLM Right-of-Way Grant” means the Right-of-Way Grant IDI-36034 from
the United States Department of Interior, Bureau of Land Management to Idaho
Power, dated as of June 4, 2009, with respect to portions of the Hemingway
Substation Site.

“Hemingway Deed” has the meaning given to such term in Section 2.10(a)(viii).

“Hemingway Easements” means those easements, rights, privileges and other
benefits conveyed under the Hemingway Easement Agreement.

“Hemingway Easement Agreement” has the meaning given to such term in Section
2.10(a)(vi).

“Hemingway Joint Ownership and Operating Agreement” has the meaning given to
such term in Section 2.10(a)(iv).

“Hemingway Ownership Interest” means, in the case of Idaho Power forty-one and
no-tenths percent (41.0%), and in the case of PacifiCorp fifty-nine and
no-tenths percent (59.0%).

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“Hemingway Substation” has the meaning given to such term in the recitals.

“Hemingway Substation Facilities” has the meaning given to such term in the
recitals.

“Hemingway Substation Facilities Contracts” has the meaning given to such term
in Section 3.1(l).

“Hemingway Substation Site” means the site where the Hemingway Substation is
located in Owyhee County near Melba, Idaho, as further described on Exhibit K.

“Hemingway Transferable Permits” means the Governmental Authorizations, if any,
listed on Schedule 1.1(a).

“Idaho Power” has the meaning given to such term in the preamble.

“Idaho Power Acquired Assets” has the meaning given to such term in Section
2.1(b).

“Idaho Power Acquired Assets Cost Records” has the meaning given to such term in
Section 2.6(d)(i)(A).

“Idaho Power Acquired Assets Costs” has the meaning given to such term in
Section 2.6(d)(i)(A).

“Idaho Power Assumed Obligations” has the meaning given to such term in Section
2.3(b).

“Idaho Power Excluded Assets” has the meaning set forth in Section 2.2(a).

“Idaho Power Excluded Liabilities” has the meaning set forth in Section 2.4(a).

“Idaho Power Marks” means the rights of Idaho Power and its Affiliates to the
names “Idaho Power Company,” “IDACORP,” or any trade names, trademarks, service
marks, corporate names or logos, or any derivative or combination thereof, that
are confusingly similar thereto.

“Idaho Power Mortgage” means the Mortgage and Deed of Trust, dated as of October
1, 1937, and indentures supplemental thereto, granted by Idaho Power to Deutsche
Bank Trust Company Americas, formerly known as Bankers Trust Company, and
Stanley Burg, as Trustees.

“Idaho Power Nonassignable Item” has the meaning given to such term in Section
2.5(a).

“Idaho Power Permitted Encumbrances” means (a) those Encumbrances set forth in
Schedule 1.1(c);  (b) Encumbrances securing or created by or in respect of any
of the PacifiCorp Assumed Obligations; (c) statutory liens for current Taxes or
assessments not yet due or payable; (d) mechanics', carriers', workers',
repairers', landlords', and other similar liens arising or incurred in the
ordinary course of business relating to obligations as to which there is no
default on the part of Idaho Power, or pledges, or deposits, or other liens
securing the performance of statutory obligations; (e) any Encumbrances set
forth in any state, local, or municipal franchise

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or governing ordinance under which any portion of the PacifiCorp Acquired Assets
are being used or conducted; or (f) Encumbrances, including zoning, entitlement,
restriction, and other land use regulations by Governmental Entities, which,
together with all other Encumbrances, do not materially detract from the value
of or materially interfere with the present use of the PacifiCorp Acquired
Assets or the conduct of the business thereon as it is currently being used and
conducted or as contemplated under any of the Related Documents.

“Idaho Power Purchase Price” has the meaning given to such term in Section
2.6(b).

“Idaho Power Required Regulatory Approvals” has the meaning given to such term
in Section 3.1(e).

“Idaho Power True-up Notice” has the meaning given to such term in Section
2.6(c).

“Idaho Power’s Knowledge” means the actual, constructive or imputed knowledge
that the individuals listed in Schedule 1.1(b) have or could reasonably be
expected to have after reasonable due inquiry.

“Income Tax” means any Tax based upon, measured by, or calculated with respect
to (a) net income, profits, or receipts (including capital gains Taxes and
minimum Taxes) or (b) multiple bases (including corporate franchise and business
license Taxes) if one or more of the bases on which such Tax may be based,
measured by, or calculated with respect to is described in clause (a), in each
case together with any interest, penalties, or additions to such Tax.

“Indemnified Party” has the meaning given to such term in Section 6.5(a).

“Indemnifying Party” has the meaning given to such term in Section 6.5(a).

“Independent Accounting Firm” means an independent accounting firm of national
reputation mutually appointed by the Parties.

“Intellectual Property” means trademarks, patents, copyrights, trade secrets,
and other intellectual property rights which are utilized in connection with
ownership, use and operation of the PacifiCorp Acquired Assets or the Idaho
Power Acquired Assets (as these facilities are reasonably expected to be
operated in accordance with the provisions of the Hemingway Joint Ownership and
Operating Agreement or the Populus Joint Ownership and Operating Agreement, as
applicable, on the date the facilities enter commercial operation), as the case
may be.

“Liability” means any debt, liability, obligation or commitment of any kind,
character or description, whether known or unknown, absolute or contingent,
accrued or unaccrued, disputed or undisputed, liquidated or unliquidated,
secured or unsecured, joint or several, due or to become due, vested or
unvested, executory, determined, determinable or otherwise.

“Losses” mean any and all damages and losses, deficiencies, Liabilities, taxes,
obligations, penalties, judgments, settlements, claims, payments, fines,
interest, costs and expenses, whether or not resulting from third party claims,
including the costs and expenses of any and all Actions and demands,
assessments, judgments, settlements and compromises relating thereto and the
costs and expenses of attorneys', accountants', consultants' and other

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professionals’ fees and expenses incurred in the investigation or defense
thereof or the enforcement of rights hereunder and costs and expenses of
remediation (including, in the case of remediation, all expenses and costs
associated with financial assurance); provided, however, that in no event shall
Losses include lost profits or damages and losses excluded under Section 6.11.

“Material Adverse Effect” means, in respect of a Party, an event, circumstance,
condition, or occurrence of whatever nature that materially and adversely
affects: (a) the business, assets, property, results of operation, or financial
condition of such Party or any of its Affiliates, including a material adverse
regulatory impact on such Party or any of its Affiliates; (b) such Party’s
ability to perform its obligations under this Agreement or any of the Related
Documents to which it is a party; or (c) the validity or enforceability of this
Agreement or any of the Related Documents to which it is a  party, including the
ability of such Party to enforce any of its rights or remedies hereunder or
thereunder.

“Outside Closing Date” means December 31, 2010 or such later date as the Parties
may agree to in writing, such agreement not unreasonably to be withheld or
delayed, which is the latest date by which the Closing may occur.

“PacifiCorp” has the meaning given to such term in the preamble.

“PacifiCorp Acquired Assets” has the meaning given to such term in Section
2.1(a).

“PacifiCorp Acquired Assets Cost Records” has the meaning given to such term in
Section 2.6(d)(i)(A).

“PacifiCorp Acquired Assets Costs” has the meaning given to such term in Section
2.6(d)(i)(A).

“PacifiCorp Assumed Obligations” has the meaning given to such term in Section
2.3(a).

“PacifiCorp Excluded Assets” has the meaning given to such term in Section
2.2(b).

“PacifiCorp Excluded Liabilities” has the meaning given to such term in Section
2.4(b).

“PacifiCorp Marks” means the rights of PacifiCorp and its Affiliates to the
names “PacifiCorp,” “Pacific Power,” “Rocky Mountain Power,” “PacifiCorp
Energy,” or any trade names, trademarks, service marks, corporate names or
logos, or any derivative or combination thereof, that are confusingly similar
thereto.

“PacifiCorp Mortgage” means the Mortgage and Deed of Trust from PacifiCorp to
Morgan Guaranty Trust Company of New York (The Bank of New York Mellon Trust
Company, N.A., successor), dated as of January 9, 1989, as amended and
supplemented by supplemental indentures, including the Twenty-Third Supplemental
Indenture, dated January 1, 2009 and recorded in the records of Bannock County,
Idaho on June 10, 2009, under Recording No. 20912676.

“PacifiCorp Nonassignable Item” has the meaning given to such term in Section
2.5(b).

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“PacifiCorp Permitted Encumbrances” means (a) those Encumbrances set forth in
Schedule 1.1(e);  (b) Encumbrances securing or created by or in respect of any
of the Idaho Power Assumed Obligations; (c) statutory liens for current Taxes or
assessments not yet due or payable; (d) mechanics’, carriers’, workers’,
repairers’, landlords’, and other similar liens arising or incurred in the
ordinary course of business relating to obligations as to which there is no
default on the part of PacifiCorp, or pledges, or deposits, or other liens
securing the performance of statutory obligations; (e) any Encumbrances set
forth in any state, local, or municipal franchise or governing ordinance under
which any portion of the Idaho Power Acquired Assets are being used or
conducted; or (f) Encumbrances, including zoning, entitlement, restriction, and
other land use regulations by Governmental Authorities, which, together with all
other Encumbrances, do not materially detract from the value of or materially
interfere with the present use of the Idaho Power Acquired Assets or the conduct
of the business thereon as it is currently being used and conducted or as
contemplated under any of the Related Documents.

“PacifiCorp Purchase Price” has the meaning given to such term in Section
2.6(a).

“PacifiCorp Required Regulatory Approvals” has the meaning given to such term in
Section 3.2(e).

“PacifiCorp True-up Notice” has the meaning given to such term in Section
2.6(c).

“PacifiCorp’s Knowledge” means the actual, constructive or imputed knowledge
that the individuals listed in Schedule 1.1(d) have or could reasonably be
expected to have after reasonable due inquiry.

“Party” has the meaning given to such term in the preamble.

“Person” means any individual, partnership, limited liability company, joint
venture, corporation, trust, unincorporated organization, or Government Entity.

“Populus Assignment and Assumption Agreement” has the meaning given to such term
in Section 2.10(a)(iii).

“Populus Bill of Sale” has the meaning given to such term in Section 2.10(b)(i).

“Populus Deed” has the meaning given to such term is Section 2.10(b)(viii).

“Populus Easements” means those easements, rights, privileges and other benefits
conveyed under the Populus Easement Agreement.

“Populus Easement Agreement” has the meaning given to such term in Section
2.10(a)(vii).

“Populus Joint Ownership and Operating Agreement” has the meaning given to such
term in Section 2.10(a)(v).

“Populus Ownership Interest” means, in the case of Idaho Power twenty and
eight-tenths percent (20.8%), and in the case of PacifiCorp seventy-nine and
two-tenths percent (79.2%).

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“Populus Substation” has the meaning given to such term in the recitals.

“Populus Substation Facilities” has the meaning given to such term in the
recitals.

“Populus Substation Facilities Contracts” has the meaning given to such term in
Section 3.2(l).

“Populus Substation Site” means the site where the Populus Substation is located
in Bannock County near Downey, Idaho, as further described on Exhibit L.

“Populus Transferable Permits” means the Governmental Authorizations, if any,
listed on Schedule 1.1(f).

“Purchase Price” means the Idaho Purchase Price or the PacifiCorp Purchase
Price.

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, or disposing of Hazardous
Materials into the Environment.

“Related Documents” means the Hemingway Bill of Sale, Populus Bill of Sale,
Hemingway Joint Ownership and Operating Agreement, Populus Joint Ownership and
Operating Agreement, Hemingway Assignment and Assumption Agreement, Populus
Assignment and Assumption Agreement, the Hemingway Easement Agreement, the
Populus Easement Agreement, the Hemingway Deed, the Populus Deed, and each other
document, certificate or instrument delivered by each of the Parties on the
Closing in accordance with the terms of this Agreement.

“Representatives” means, with respect to a Party, the directors, officers,
shareholders, partners, members, employees, agents, consultants, contractors or
other representatives of such Party.

“Required Regulatory Approvals” means the Idaho Power Required Regulatory
Approvals and the PacifiCorp Required Regulatory Approvals.

“Subsidiary,” when used in reference to a Person, means any Person (a) of which
outstanding securities or other equity interests having ordinary voting power to
elect a majority of the board of directors or other Persons performing similar
functions of such Person are owned directly or indirectly by such first Person,
(b) of which such Person or any subsidiary of such first Person is a general
partner or (c) such first Person directly or indirectly controls.

“Tax” and “Taxes” means all taxes, charges, customs, duties, fees, levies,
penalties, or other assessments imposed by any foreign or United States federal,
state, or local taxing authority, including profits, estimated gross receipts,
income, excise, property, replacement tax, sales, transfer, franchise, license,
payroll, withholding, social security, or any other taxes (including any escheat
or unclaimed property obligations), including any interest, penalties, or
additions attributable thereto.

 

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“Tax Affiliate” of a Person means a member of that Person’s Affiliated Group and
any other Subsidiary of that Person which is a partnership or is disregarded as
an entity separate from that Person for Tax purposes.

“Tax Return” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes of any kind or nature, filed
or required to be filed with any Governmental Entity, including any schedule or
attachment thereto, and including any amendment thereof.

“Transfer Taxes” means any real property transfer, sales, use, value added,
stamp, documentary, recording, registration, conveyance, stock transfer,
intangible property transfer, personal property transfer, gross receipts,
registration, duty, securities transactions or similar fees or Taxes or
governmental charges (together with any interest or penalty, addition to Tax or
additional amount imposed) as levied by any Governmental Entity in connection
with the transactions contemplated by this Agreement, including any payments
made in lieu of any such Taxes or governmental charges which become payable in
connection with the transactions contemplated by this Agreement.

“True-up Notice” means either the Idaho Power True-up Notice or the PacifiCorp
True-up Notice.

1.2              OTHER DEFINITIONAL AND INTERPRETIVE MATTERS.  UNLESS OTHERWISE
EXPRESSLY PROVIDED IN THIS AGREEMENT, FOR PURPOSES OF THIS AGREEMENT, THE
FOLLOWING RULES OF INTERPRETATION APPLY:

(A)             CALCULATION OF TIME PERIOD.  WHEN CALCULATING THE PERIOD OF TIME
BEFORE WHICH, WITHIN WHICH, OR FOLLOWING WHICH ANY ACT IS TO BE DONE OR STEP
TAKEN PURSUANT TO THIS AGREEMENT, THE DATE THAT IS THE REFERENCE DATE IN
CALCULATING SUCH PERIOD WILL BE EXCLUDED.  IF THE LAST DAY OF SUCH PERIOD IS A
NON-BUSINESS DAY, THE PERIOD IN QUESTION WILL END ON THE NEXT SUCCEEDING
BUSINESS DAY.

(B)            DOLLARS.  ANY REFERENCE IN THIS AGREEMENT TO “DOLLARS” OR “$”
MEANS U.S. DOLLARS.

(C)             EXHIBITS AND SCHEDULES.  UNLESS OTHERWISE EXPRESSLY INDICATED,
ANY REFERENCE IN THIS AGREEMENT TO AN “EXHIBIT” OR A “SCHEDULE” REFERS TO AN
EXHIBIT OR SCHEDULE TO THIS AGREEMENT.  THE EXHIBITS AND SCHEDULES TO THIS
AGREEMENT ARE HEREBY INCORPORATED AND MADE A PART HEREOF AS IF SET FORTH IN FULL
HEREIN AND ARE AN INTEGRAL PART OF THIS AGREEMENT.  ANY CAPITALIZED TERMS USED
IN ANY SCHEDULE OR EXHIBIT BUT NOT OTHERWISE DEFINED THEREIN ARE DEFINED AS SET
FORTH IN THIS AGREEMENT.

(D)            GENDER AND NUMBER.  ANY REFERENCE IN THIS AGREEMENT TO GENDER
INCLUDES ALL GENDERS, AND THE MEANING OF DEFINED TERMS APPLIES TO BOTH THE
SINGULAR AND THE PLURAL OF THOSE TERMS.

(e)             Headings.  The provision of a Table of Contents, the division of
this Agreement into Articles, Sections, and other subdivisions, and the
insertion of headings are for convenience of reference only and do not affect,
and will not be utilized in construing or

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interpreting, this Agreement.  All references in this Agreement to any “Section”
are to the corresponding Section of this Agreement unless otherwise specified.

(F)             “HEREIN.”  THE WORDS SUCH AS “HEREIN,” “HEREINAFTER,” “HEREOF,”
AND “HEREUNDER” REFER TO THIS AGREEMENT (INCLUDING THE SCHEDULES AND EXHIBITS TO
THIS AGREEMENT) AS A WHOLE AND NOT MERELY TO A SUBDIVISION IN WHICH SUCH WORDS
APPEAR UNLESS THE CONTEXT OTHERWISE REQUIRES.

(G)            “INCLUDING.”  THE WORD “INCLUDING” OR ANY VARIATION THEREOF MEANS
“INCLUDING, WITHOUT LIMITATION” AND DOES NOT LIMIT ANY GENERAL STATEMENT THAT IT
FOLLOWS TO THE SPECIFIC OR SIMILAR ITEMS OR MATTERS IMMEDIATELY FOLLOWING IT.

(H)            AGREEMENTS AND DOCUMENTS.  EACH REFERENCE IN THIS AGREEMENT TO
ANY AGREEMENT OR DOCUMENT OR A PORTION OR PROVISION THEREOF SHALL BE CONSTRUED
AS A REFERENCE TO THE RELEVANT AGREEMENT OR DOCUMENT AS AMENDED, SUPPLEMENTED OR
OTHERWISE MODIFIED FROM TIME TO TIME WITH THE WRITTEN APPROVAL OF BOTH PARTIES.

(I)              GOVERNMENTAL REQUIREMENTS.  EACH REFERENCE IN THIS AGREEMENT TO
GOVERNMENTAL REQUIREMENTS AND TO TERMS DEFINED IN, AND OTHER PROVISIONS OF,
GOVERNMENTAL REQUIREMENTS SHALL BE REFERENCES TO THE SAME (OR A SUCCESSOR TO THE
SAME) AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME.

(J)              DAYS; YEARS.  EACH REFERENCE IN THIS AGREEMENT TO:  (A) “DAY”
MEANS A CALENDAR DAY; AND (B) “YEAR” MEANS A CALENDAR YEAR, PROVIDED THAT WHEN A
PERIOD MEASURED IN YEARS COMMENCES ON A DAY OTHER THAN THE FIRST DAY OF A YEAR,
THE PERIOD SHALL RUN FROM THE DAY ON WHICH IT STARTS TO THE CORRESPONDING DAY IN
THE NEXT YEAR AND, AS APPROPRIATE, TO SUCCEEDING YEARS THEREAFTER.

1.3              JOINT NEGOTIATION AND PREPARATION OF AGREEMENT.  THE PARTIES
HAVE PARTICIPATED JOINTLY IN THE NEGOTIATION AND DRAFTING OF THIS AGREEMENT AND,
IN THE EVENT AN AMBIGUITY OR QUESTION OF INTENT OR INTERPRETATION ARISES, THIS
AGREEMENT WILL BE CONSTRUED AS JOINTLY DRAFTED BY THE PARTIES AND NO PRESUMPTION
OR BURDEN OF PROOF FAVORING OR DISFAVORING ANY PARTY WILL EXIST OR ARISE BY
VIRTUE OF THE AUTHORSHIP OF ANY PROVISION OF THIS AGREEMENT.

ARTICLE II
PURCHASE AND SALE

2.1              PURCHASE AND SALE.

(A)             PACIFICORP ACQUIRED ASSETS.  SUBJECT TO THE TERMS AND CONDITIONS
SET FORTH IN THIS AGREEMENT, AT THE CLOSING, IDAHO POWER SHALL SELL, ASSIGN,
CONVEY, TRANSFER AND DELIVER TO PACIFICORP, AND PACIFICORP SHALL PURCHASE AND
ACCEPT FROM IDAHO POWER, FREE AND CLEAR OF ALL ENCUMBRANCES (OTHER THAN IDAHO
POWER PERMITTED ENCUMBRANCES), (I) AN UNDIVIDED OWNERSHIP INTEREST, AS TENANT IN
COMMON, EQUAL TO PACIFICORP’S HEMINGWAY OWNERSHIP INTEREST IN ALL OF IDAHO
POWER’S RIGHT, TITLE, AND INTEREST IN, AND TO, THE ASSETS CONSTITUTING THE
HEMINGWAY SUBSTATION FACILITIES AND THE HEMINGWAY TRANSFERABLE PERMITS (IF ANY)
AND (II) THE HEMINGWAY EASEMENTS, BUT EXCLUDING THE IDAHO POWER EXCLUDED ASSETS
(COLLECTIVELY, THE “PACIFICORP ACQUIRED ASSETS”).

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(B)            IDAHO POWER ACQUIRED ASSETS.  SUBJECT TO THE TERMS AND CONDITIONS
SET FORTH IN THIS AGREEMENT, AT THE CLOSING, PACIFICORP SHALL SELL, ASSIGN,
CONVEY, TRANSFER AND DELIVER TO IDAHO POWER, AND IDAHO POWER SHALL PURCHASE AND
ACCEPT FROM PACIFICORP, FREE AND CLEAR OF ALL ENCUMBRANCES (OTHER THAN
PACIFICORP PERMITTED ENCUMBRANCES), (I) AN UNDIVIDED OWNERSHIP INTEREST, AS
TENANT IN COMMON, EQUAL TO IDAHO POWER’S POPULUS OWNERSHIP INTEREST IN ALL OF
PACIFICORP’S RIGHT, TITLE, AND INTEREST IN, AND TO, THE ASSETS CONSTITUTING THE
POPULUS SUBSTATION FACILITIES AND THE POPULUS TRANSFERABLE PERMITS (IF ANY) AND
(II) THE POPULUS EASEMENTS, BUT EXCLUDING THE PACIFICORP EXCLUDED ASSETS
(COLLECTIVELY, THE “IDAHO POWER ACQUIRED ASSETS”).

2.2              EXCLUDED ASSETS.

(A)             IDAHO POWER EXCLUDED ASSETS.  THE PACIFICORP ACQUIRED ASSETS DO
NOT INCLUDE ANY PROPERTY OR ASSETS OF IDAHO POWER NOT DESCRIBED IN SECTION
2.1(A) AND, NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN SECTION 2.1(A) OR
ELSEWHERE IN THIS AGREEMENT, THE PACIFICORP ACQUIRED ASSETS DO NOT INCLUDE THE
FOLLOWING PROPERTY OR ASSETS OF IDAHO POWER (ALL ASSETS EXCLUDED PURSUANT TO
THIS SECTION 2.2(A), THE “IDAHO POWER EXCLUDED ASSETS”), AND PACIFICORP SHALL
HAVE NO LIABILITY WITH RESPECT THERETO:

(I)                 THE IDAHO POWER MARKS;

(II)               ALL CASH, CASH EQUIVALENTS, BANK DEPOSITS, ACCOUNTS
RECEIVABLE, AND ANY INCOME, SALES, PAYROLL OR OTHER TAX RECEIVABLES;

(III)             SUBJECT TO SECTION 2.8, ANY REFUND OR CREDIT (A) RELATED TO
TAXES PAID BY OR ON BEHALF OF IDAHO POWER, WHETHER SUCH REFUND IS RECEIVED AS A
PAYMENT OR AS A CREDIT AGAINST FUTURE TAXES PAYABLE, OR (B) RELATING TO A PERIOD
BEFORE THE CLOSING DATE;

(IV)             ALL OF THE CLAIMS OF IDAHO POWER AGAINST ANY PERSON RELATED TO,
ARISING FROM OR ASSOCIATED WITH THE PACIFICORP ACQUIRED ASSETS RELATING TO A
PERIOD BEFORE THE CLOSING DATE;

(V)               ALL INSURANCE POLICIES, AND RIGHTS THEREUNDER, INCLUDING ANY
SUCH POLICIES AND RIGHTS IN RESPECT OF THE PACIFICORP ACQUIRED ASSETS;

(VI)             THE RIGHTS OF IDAHO POWER ARISING UNDER OR IN CONNECTION WITH
THIS AGREEMENT, ANY RELATED DOCUMENT DELIVERED IN CONNECTION HEREWITH, AND ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY;

(VII)           ALL CONTRACTS ENTERED INTO BY IDAHO POWER RELATED TO, ARISING
FROM OR ASSOCIATED WITH THE PACIFICORP ACQUIRED ASSETS;

(VIII)         ALL SOFTWARE, SOFTWARE LICENSES, INFORMATION SYSTEMS, MANAGEMENT
SYSTEMS OWNED OR USED BY IDAHO POWER RELATED TO, ARISING FROM OR ASSOCIATED WITH
THE PACIFICORP ACQUIRED ASSETS;

(ix)             all communication towers, equipment and related assets of Idaho
Power related to, arising from or associated with the PacifiCorp Acquired
Assets, other than

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certain relays, communication equipment associated with power line carriers, and
the cables between the 500 kV equipment and the panels, which relays,
communication equipment, 500kV equipment and panels are located at the Hemingway
Substation and listed in Exhibit A attached hereto; and

(X)               ALL OTHER ASSETS AND PROPERTIES OF IDAHO POWER OTHER THAN THE
PACIFICORP ACQUIRED ASSETS.

(B)            PACIFICORP EXCLUDED ASSETS.  THE IDAHO POWER ACQUIRED ASSETS DO
NOT INCLUDE ANY PROPERTY OR ASSETS OF PACIFICORP NOT DESCRIBED IN SECTION 2.1(B)
AND, NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN SECTION 2.1(B) OR
ELSEWHERE IN THIS AGREEMENT, THE IDAHO POWER ACQUIRED ASSETS DO NOT INCLUDE THE
FOLLOWING PROPERTY OR ASSETS OF PACIFICORP (ALL ASSETS EXCLUDED PURSUANT TO THIS
SECTION 2.2(B), THE “PACIFICORP EXCLUDED ASSETS”), AND IDAHO POWER SHALL HAVE NO
LIABILITY WITH RESPECT THERETO: 

(I)                 THE PACIFICORP MARKS;

(II)               ALL CASH, CASH EQUIVALENTS, BANK DEPOSITS, ACCOUNTS
RECEIVABLE, AND ANY INCOME, SALES, PAYROLL OR OTHER TAX RECEIVABLES;

(III)             SUBJECT TO SECTION 2.8, ANY REFUND OR CREDIT (A) RELATED TO
TAXES PAID BY OR ON BEHALF OF PACIFICORP, WHETHER SUCH REFUND IS RECEIVED AS A
PAYMENT OR AS A CREDIT AGAINST FUTURE TAXES PAYABLE, OR (B) RELATING TO A PERIOD
BEFORE THE CLOSING DATE;

(IV)             ALL OF THE CLAIMS OF PACIFICORP AGAINST ANY PERSON RELATED TO,
ARISING FROM OR ASSOCIATED WITH THE IDAHO POWER ACQUIRED ASSETS RELATING TO A
PERIOD BEFORE THE CLOSING DATE;

(V)               ALL INSURANCE POLICIES, AND RIGHTS THEREUNDER, INCLUDING ANY
SUCH POLICIES AND RIGHTS IN RESPECT OF THE IDAHO POWER ACQUIRED ASSETS;

(VI)             THE RIGHTS OF PACIFICORP ARISING UNDER OR IN CONNECTION WITH
THIS AGREEMENT, ANY RELATED DOCUMENT DELIVERED IN CONNECTION HEREWITH, AND ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY;

(VII)           ALL CONTRACTS ENTERED INTO BY PACIFICORP RELATED TO, ARISING
FROM OR ASSOCIATED WITH THE IDAHO POWER ACQUIRED ASSETS;

(VIII)         ALL SOFTWARE, SOFTWARE LICENSES, INFORMATION SYSTEMS, MANAGEMENT
SYSTEMS OWNED OR USED BY PACIFICORP RELATED TO, ARISING FROM OR ASSOCIATED WITH
THE IDAHO POWER ACQUIRED ASSETS;

(IX)             ALL COMMUNICATION TOWERS, EQUIPMENT AND RELATED ASSETS OF
PACIFICORP RELATED TO, ARISING FROM OR ASSOCIATED WITH THE IDAHO POWER ACQUIRED
ASSETS; AND

(X)               ALL OTHER ASSETS AND PROPERTIES OF PACIFICORP OTHER THAN THE
IDAHO POWER ACQUIRED ASSETS.

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2.3              ASSUMED OBLIGATIONS.

(A)             PACIFICORP ASSUMED OBLIGATIONS.  EFFECTIVE AS OF THE EFFECTIVE
TIME, PACIFICORP SHALL ASSUME ALL LIABILITIES (OTHER THAN IDAHO POWER EXCLUDED
LIABILITIES), SOLELY TO THE EXTENT APPLICABLE TO ANY PERIOD AFTER THE CLOSING,
RELATED TO, ARISING FROM OR ASSOCIATED WITH THE PACIFICORP ACQUIRED ASSETS, IN
EACH CASE, TO THE EXTENT OF PACIFICORP’S HEMINGWAY OWNERSHIP INTEREST
(COLLECTIVELY, THE “PACIFICORP ASSUMED OBLIGATIONS”).

(B)            IDAHO POWER ASSUMED OBLIGATIONS.  EFFECTIVE AS OF THE EFFECTIVE
TIME, IDAHO POWER SHALL ASSUME ALL LIABILITIES (OTHER THAN THE PACIFICORP
EXCLUDED LIABILITIES), SOLELY TO THE EXTENT APPLICABLE TO ANY PERIOD AFTER THE
CLOSING, RELATED TO, ARISING FROM OR ASSOCIATED WITH THE IDAHO POWER ACQUIRED
ASSETS, IN EACH CASE, TO THE EXTENT OF IDAHO POWER’S POPULUS OWNERSHIP INTEREST
(COLLECTIVELY, THE “IDAHO POWER ASSUMED OBLIGATIONS”).

2.4              EXCLUDED LIABILITIES.

(A)             IDAHO POWER EXCLUDED LIABILITIES.  EXCEPT FOR THE PACIFICORP
ASSUMED OBLIGATIONS AS SET FORTH IN SECTION 2.3(A) AND TAXES AS PRORATED
PURSUANT TO SECTION 2.8, IDAHO POWER SHALL RETAIN AND REMAIN FULLY RESPONSIBLE
FOR, AND PACIFICORP DOES NOT ASSUME AND SHALL HAVE NO RESPONSIBILITY OR
LIABILITY FOR, AND WILL NOT BE OBLIGATED TO PAY, PERFORM, OR OTHERWISE DISCHARGE
ANY LIABILITIES OF IDAHO POWER OR ITS AFFILIATES OR ANY PRESENT OR FORMER OWNER
OR OPERATOR THEREOF, ASSOCIATED WITH, OR ARISING FROM, ANY OF THE PACIFICORP
ACQUIRED ASSETS WHICH HAVE ARISEN, BEEN ACCRUED OR INCURRED, OR ARE OTHERWISE
BASED ON EVENTS TAKING PLACE, PRIOR TO AND AS OF THE CLOSING (COLLECTIVELY, THE
“IDAHO POWER EXCLUDED LIABILITIES”), INCLUDING THE FOLLOWING:

(I)                 ANY LIABILITIES OF IDAHO POWER TO THE EXTENT RELATED TO ANY
IDAHO POWER EXCLUDED ASSETS OR OTHER ASSETS WHICH ARE NOT PACIFICORP ACQUIRED
ASSETS AND THE OWNERSHIP, OPERATION AND CONDUCT OF ANY BUSINESS IN CONNECTION
THEREWITH OR THEREFROM;

(II)               ANY LIABILITIES IN RESPECT OF TAXES OF IDAHO POWER OR ANY TAX
AFFILIATE OF IDAHO POWER, OR ANY LIABILITY OF IDAHO POWER FOR UNPAID TAXES OF
ANY PERSON UNDER TREASURY REGULATION SECTION 1.1502-6 (OR SIMILAR PROVISION OF
STATE, LOCAL, OR FOREIGN LAW) AS A TRANSFEREE OR SUCCESSOR, BY CONTRACT OR
OTHERWISE, INCLUDING ANY TAXES RELATING TO, PERTAINING TO OR ARISING FROM THE
PACIFICORP ACQUIRED ASSETS FOR PERIODS (OR PORTIONS THEREOF) ENDING ON OR PRIOR
TO THE CLOSING DATE, EXCEPT FOR TAXES FOR WHICH PACIFICORP IS LIABLE PURSUANT TO
SECTION 2.8;

(III)             ANY LIABILITIES IN RESPECT OF ANY EMPLOYEES OF IDAHO POWER OR
ITS AFFILIATES, INCLUDING ANY OBLIGATIONS OF IDAHO POWER FOR BENEFITS, BONUSES,
WAGES, EMPLOYMENT TAXES, OR SEVERANCE PAY AND ANY LIABILITY OR OBLIGATIONS
ARISING UNDER ANY EMPLOYEE BENEFIT PLAN;

(IV)             ANY LIABILITIES RELATING TO THE DISPOSAL, STORAGE,
TRANSPORTATION, DISCHARGE, RELEASE, RECYCLING, OR THE ARRANGEMENT FOR SUCH
ACTIVITIES, BY IDAHO POWER, OF HAZARDOUS MATERIALS PRIOR TO THE CLOSING DATE;

 

 

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(V)               LIABILITIES RELATING TO ANY PROPERTIES (OTHER THAN PACIFICORP
ACQUIRED ASSETS) FORMERLY OWNED OR OPERATED BY IDAHO POWER OR ITS AFFILIATES OR
PREDECESSORS PRIOR TO THE CLOSING;

(VI)             LIABILITIES ARISING FROM ANY CLAIM (INCLUDING ANY WORKERS
COMPENSATION CLAIM) RELATED TO THE PACIFICORP ACQUIRED ASSETS WHICH HAVE ARISEN,
BEEN ACCRUED OR INCURRED, OR ARE OTHERWISE BASED ON EVENTS TAKING PLACE, PRIOR
TO AND AS OF THE CLOSING;

(VII)           ANY LIABILITIES OF IDAHO POWER ARISING UNDER OR IN CONNECTION
WITH THIS AGREEMENT, ANY RELATED DOCUMENT DELIVERED IN CONNECTION HEREWITH, AND
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY;

(VIII)         ANY LIABILITIES, INCLUDING FINES, PENALTIES OR COSTS IMPOSED BY A
GOVERNMENTAL ENTITY, AND THE COSTS OF ANY ASSOCIATED DEFENSE OR RESPONSE, WITH
RESPECT TO ANY OF THE PACIFICORP ACQUIRED ASSETS RESULTING FROM AN
INVESTIGATION, PROCEEDING, REQUEST FOR INFORMATION OR INSPECTION BEFORE OR BY A
GOVERNMENTAL ENTITY WHETHER PENDING OR COMMENCING ON, PRIOR TO OR AFTER THE
CLOSING DATE, TO THE EXTENT BASED ON EVENTS OR CONDITIONS OCCURRING OR EXISTING
IN CONNECTION WITH, OR ARISING OUT OF, OR OTHERWISE RELATING TO, THE PACIFICORP
ACQUIRED ASSETS OR THE OWNERSHIP, POSSESSION, USE, OPERATION, SALE OR OTHER
DISPOSITION THEREOF ON OR PRIOR TO THE CLOSING DATE (OR ANY OTHER ASSETS,
PROPERTIES, RIGHTS OR INTERESTS ASSOCIATED, AT ANY TIME ON OR PRIOR TO THE
CLOSING DATE, WITH THE PACIFICORP ACQUIRED ASSETS), OR ACTIONS TAKEN OR
OMISSIONS TO ACT MADE ON OR PRIOR TO THE CLOSING DATE;

(IX)             ANY LIABILITIES RELATING TO THE PACIFICORP ACQUIRED ASSETS (OR
ANY OTHER ASSETS, PROPERTIES, RIGHTS OR INTERESTS ASSOCIATED, AT ANY TIME ON OR
PRIOR TO THE CLOSING DATE, WITH THE PACIFICORP ACQUIRED ASSETS), TO THE EXTENT
BASED ON EVENTS OR CONDITIONS OCCURRING OR EXISTING ON OR PRIOR TO THE CLOSING
DATE AND ARISING OUT OF OR RELATING TO (A) ANY DISPUTE ARISING OUT OF OR IN
CONNECTION WITH CAPACITY OF OR ENERGY PROVIDED OR SERVICES RENDERED FROM THE
PACIFICORP ACQUIRED ASSETS, INCLUDING CLAIMS FOR REFUNDS, PERSONAL INJURY OR
PROPERTY DAMAGE, (B) CLAIMS RELATING TO EMPLOYEE HEALTH AND SAFETY, INCLUDING
CLAIMS FOR INJURY, SICKNESS, DISEASE OR DEATH OF ANY PERSON, (C) ANY LIEN
DESCRIBED IN CLAUSE (D) OF THE DEFINITION OF IDAHO POWER PERMITTED ENCUMBRANCES
OR ANY UNPAID SUMS FOR WHICH ANY SUCH LIENS SHALL HAVE ARISEN, (D) CLAIMS BY ANY
PERSON UTILIZED OR RETAINED FOR SERVICES OR WORK RELATED TO OR IN SUPPORT OF THE
PACIFICORP ACQUIRED ASSETS, OR (E) COMPLIANCE WITH ANY GOVERNMENTAL REQUIREMENTS
RELATING TO ANY OF THE FOREGOING;

(X)               ANY LIABILITIES RELATING TO, BASED IN WHOLE OR IN PART ON
EVENTS OR CONDITIONS OCCURRING OR EXISTING IN CONNECTION WITH, OR ARISING OUT
OF, THE PACIFICORP ACQUIRED ASSETS AS OPERATED ON OR PRIOR TO THE CLOSING DATE,
OR THE DESIGN, CONSTRUCTION, OWNERSHIP, POSSESSION, USE, OR OPERATION OF THE
PACIFICORP ACQUIRED ASSETS, ON OR BEFORE THE CLOSING DATE;

(XI)             ANY LIABILITY REPRESENTING INDEBTEDNESS FOR MONEY BORROWED (AND
ANY REFINANCING THEREOF); AND

(XII)           ALL OTHER PRE-CLOSING LIABILITIES OF IDAHO POWER, OF WHATEVER
NATURE.

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(B)            PACIFICORP EXCLUDED LIABILITIES.  EXCEPT FOR THE IDAHO POWER
ASSUMED OBLIGATIONS AS SET FORTH IN SECTION 2.3(B) AND TAXES AS PRORATED
PURSUANT TO SECTION 2.8, PACIFICORP SHALL RETAIN AND REMAIN FULLY RESPONSIBLE
FOR, AND IDAHO POWER DOES NOT ASSUME AND SHALL HAVE NO RESPONSIBILITY OR
LIABILITY FOR, AND WILL NOT BE OBLIGATED TO PAY, PERFORM, OR OTHERWISE DISCHARGE
ANY LIABILITIES OF PACIFICORP OR ITS AFFILIATES OR ANY PRESENT OR FORMER OWNER
OR OPERATOR THEREOF, ASSOCIATED WITH, OR ARISING FROM, ANY OF THE IDAHO POWER
ACQUIRED ASSETS WHICH HAVE ARISEN, BEEN ACCRUED OR INCURRED, OR ARE OTHERWISE
BASED ON EVENTS TAKING PLACE, PRIOR TO AND AS OF THE CLOSING (COLLECTIVELY, THE
“PACIFICORP EXCLUDED LIABILITIES”), INCLUDING THE FOLLOWING:

(I)                 ANY LIABILITIES OF PACIFICORP TO THE EXTENT RELATED TO ANY
PACIFICORP EXCLUDED ASSETS OR OTHER ASSETS WHICH ARE NOT IDAHO POWER ACQUIRED
ASSETS AND THE OWNERSHIP, OPERATION AND CONDUCT OF ANY BUSINESS IN CONNECTION
THEREWITH OR THEREFROM;

(II)               ANY LIABILITIES IN RESPECT OF TAXES OF PACIFICORP OR ANY TAX
AFFILIATE OF PACIFICORP, OR ANY LIABILITY OF PACIFICORP FOR UNPAID TAXES OF ANY
PERSON UNDER TREASURY REGULATION SECTION 1.1502-6 (OR SIMILAR PROVISION OF
STATE, LOCAL, OR FOREIGN LAW) AS A TRANSFEREE OR SUCCESSOR, BY CONTRACT OR
OTHERWISE, INCLUDING ANY TAXES RELATING TO, PERTAINING TO OR ARISING FROM THE
IDAHO POWER ACQUIRED ASSETS FOR PERIODS (OR PORTIONS THEREOF) ENDING ON OR PRIOR
TO THE CLOSING DATE, EXCEPT FOR TAXES FOR WHICH IDAHO POWER IS LIABLE PURSUANT
TO SECTION 2.8;

(III)             ANY LIABILITIES IN RESPECT OF ANY EMPLOYEES OF PACIFICORP OR
ITS AFFILIATES, INCLUDING ANY OBLIGATIONS OF PACIFICORP FOR BENEFITS, BONUSES,
WAGES, EMPLOYMENT TAXES, OR SEVERANCE PAY AND ANY LIABILITY OR OBLIGATIONS
ARISING UNDER ANY EMPLOYEE BENEFIT PLAN;

(IV)             ANY LIABILITIES RELATING TO THE DISPOSAL, STORAGE,
TRANSPORTATION, DISCHARGE, RELEASE, RECYCLING, OR THE ARRANGEMENT FOR SUCH
ACTIVITIES, BY PACIFICORP, OF HAZARDOUS MATERIALS PRIOR TO THE CLOSING DATE;

(V)               LIABILITIES RELATING TO ANY PROPERTIES (OTHER THAN IDAHO POWER
ACQUIRED ASSETS) FORMERLY OWNED OR OPERATED BY PACIFICORP OR ITS AFFILIATES OR
PREDECESSORS PRIOR TO THE CLOSING;

(VI)             LIABILITIES ARISING FROM ANY CLAIM (INCLUDING ANY WORKERS
COMPENSATION CLAIM) RELATED TO THE IDAHO POWER ACQUIRED ASSETS WHICH HAVE
ARISEN, BEEN ACCRUED OR INCURRED, OR ARE OTHERWISE BASED ON EVENTS TAKING PLACE,
PRIOR TO AND AS OF THE CLOSING;

(VII)           ANY LIABILITIES OF PACIFICORP ARISING UNDER OR IN CONNECTION
WITH THIS AGREEMENT, ANY RELATED DOCUMENT DELIVERED IN CONNECTION HEREWITH, AND
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY;

(viii)         any Liabilities, including fines, penalties or costs imposed by a
Governmental Entity, and the costs of any associated defense or response, with
respect to any of the Idaho Power Acquired Assets resulting from an
investigation, proceeding, request for information or inspection before or by a
Governmental Entity whether pending or commencing on, prior to or after the
Closing Date, to the extent based on events or conditions occurring or

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existing in connection with, or arising out of, or otherwise relating to, the
Idaho Power Acquired Assets or the ownership, possession, use, operation, sale
or other disposition thereof on or prior to the Closing Date (or any other
assets, properties, rights or interests associated, at any time on or prior to
the Closing Date, with the Idaho Power Acquired Assets), or actions taken or
omissions to act made on or prior to the Closing Date;

(IX)             ANY LIABILITIES RELATING TO THE IDAHO POWER ACQUIRED ASSETS (OR
ANY OTHER ASSETS, PROPERTIES, RIGHTS OR INTERESTS ASSOCIATED, AT ANY TIME ON OR
PRIOR TO THE CLOSING DATE, WITH THE IDAHO POWER ACQUIRED ASSETS), TO THE EXTENT
BASED ON EVENTS OR CONDITIONS OCCURRING OR EXISTING ON OR PRIOR TO THE CLOSING
DATE AND ARISING OUT OF OR RELATING TO (A) ANY DISPUTE ARISING OUT OF OR IN
CONNECTION WITH CAPACITY OF OR ENERGY PROVIDED OR SERVICES RENDERED FROM THE
IDAHO POWER ACQUIRED ASSETS, INCLUDING CLAIMS FOR REFUNDS, PERSONAL INJURY OR
PROPERTY DAMAGE, (B) CLAIMS RELATING TO EMPLOYEE HEALTH AND SAFETY, INCLUDING
CLAIMS FOR INJURY, SICKNESS, DISEASE OR DEATH OF ANY PERSON, (C) ANY LIEN
DESCRIBED IN CLAUSE (D) OF THE DEFINITION OF PACIFICORP PERMITTED ENCUMBRANCES
OR ANY UNPAID SUMS FOR WHICH ANY SUCH LIENS SHALL HAVE ARISEN, (D) CLAIMS BY ANY
PERSON UTILIZED OR RETAINED FOR SERVICES OR WORK RELATED TO OR IN SUPPORT OF THE
IDAHO POWER ACQUIRED ASSETS, OR (E) COMPLIANCE WITH ANY GOVERNMENTAL
REQUIREMENTS RELATING TO ANY OF THE FOREGOING;

(X)               ANY LIABILITIES RELATING TO, BASED IN WHOLE OR IN PART ON
EVENTS OR CONDITIONS OCCURRING OR EXISTING IN CONNECTION WITH, OR ARISING OUT
OF, THE IDAHO POWER ACQUIRED ASSETS AS OPERATED ON OR PRIOR TO THE CLOSING DATE,
OR THE DESIGN, CONSTRUCTION, OWNERSHIP, POSSESSION, USE, OR OPERATION OF THE
IDAHO POWER ACQUIRED ASSETS, ON OR BEFORE THE CLOSING DATE;

(XI)             ANY LIABILITY REPRESENTING INDEBTEDNESS FOR MONEY BORROWED (AND
ANY REFINANCING THEREOF); AND

(XII)           ALL OTHER PRE-CLOSING LIABILITIES OF PACIFICORP, OF WHATEVER
NATURE.

2.5              NON-ASSIGNABLE ASSETS.

(a)             Idaho Power Nonassignable Item.  Notwithstanding anything in
this Agreement to the contrary, to the extent that the assignment of all or any
portion of any Hemingway Transferable Permit (if any) shall be prohibited by
Governmental Requirement or the terms thereof, or require the consent of the
other party thereto (if any) or any other third party, and any consent or waiver
in connection with such prohibition or requirement is not obtained (which Idaho
Power hereby agrees to use Commercially Reasonable Efforts to promptly obtain),
(i) this Agreement shall not constitute an agreement to assign any such
Hemingway Transferable Permit included in the PacifiCorp Acquired Assets (each,
an “Idaho Power Nonassignable Item”), and (ii) no breach of this Agreement shall
have occurred by virtue of such nonassignment.  Idaho Power agrees that on and
after the Closing, it will use its Commercially Reasonable Efforts (A) to
provide PacifiCorp with the benefits of and to preserve for the benefit of
PacifiCorp the rights of Idaho Power under such Idaho Power Nonassignable Items
to the extent of PacifiCorp’s Hemingway Ownership Interest and (B) to facilitate
receipt of any consideration which may be received by Idaho Power in and under
every such Idaho Power Nonassignable Item, which consideration, to the extent
received, shall be held for the benefit of, and shall be delivered to,
PacifiCorp to the extent of PacifiCorp's

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Hemingway Ownership Interest; provided, however, that nothing in this Section
2.5(a) shall require Idaho Power to make any material expenditure or incur any
material obligation on its own or on PacifiCorp’s behalf.

(B)            PACIFICORP NONASSIGNABLE ITEM.  NOTWITHSTANDING ANYTHING IN THIS
AGREEMENT TO THE CONTRARY, TO THE EXTENT THAT THE ASSIGNMENT OF ALL OR ANY
PORTION OF ANY POPULUS TRANSFERABLE PERMIT (IF ANY) SHALL BE PROHIBITED BY
GOVERNMENTAL REQUIREMENT OR THE TERMS THEREOF, OR REQUIRE THE CONSENT OF THE
OTHER PARTY THERETO (IF ANY) OR ANY OTHER THIRD PARTY, AND ANY CONSENT OR WAIVER
IN CONNECTION WITH SUCH PROHIBITION OR REQUIREMENT IS NOT OBTAINED (WHICH
PACIFICORP HEREBY AGREES TO USE COMMERCIALLY REASONABLE EFFORTS TO PROMPTLY
OBTAIN), (I) THIS AGREEMENT SHALL NOT CONSTITUTE AN AGREEMENT TO ASSIGN ANY SUCH
POPULUS TRANSFERABLE PERMIT INCLUDED IN THE IDAHO POWER ACQUIRED ASSETS (EACH, A
“PACIFICORP NONASSIGNABLE ITEM”), AND (II) NO BREACH OF THIS AGREEMENT SHALL
HAVE OCCURRED BY VIRTUE OF SUCH NONASSIGNMENT.  PACIFICORP AGREES THAT ON AND
AFTER THE CLOSING, IT WILL USE ITS COMMERCIALLY REASONABLE EFFORTS (A) TO
PROVIDE IDAHO POWER WITH THE BENEFITS OF AND TO PRESERVE FOR THE BENEFIT OF
IDAHO POWER THE RIGHTS OF PACIFICORP UNDER SUCH PACIFICORP NONASSIGNABLE ITEMS
TO THE EXTENT OF IDAHO POWER POPULUS OWNERSHIP INTEREST AND (B) TO FACILITATE
RECEIPT OF ANY CONSIDERATION WHICH MAY BE RECEIVED BY PACIFICORP IN AND UNDER
EVERY SUCH PACIFICORP NONASSIGNABLE ITEM, WHICH CONSIDERATION, TO THE EXTENT
RECEIVED, SHALL BE HELD FOR THE BENEFIT OF, AND SHALL BE DELIVERED TO, IDAHO
POWER TO THE EXTENT OF IDAHO POWER’S POPULUS OWNERSHIP INTEREST; PROVIDED,
HOWEVER, THAT NOTHING IN THIS SECTION 2.5(B) SHALL REQUIRE PACIFICORP TO MAKE
ANY MATERIAL EXPENDITURE OR INCUR ANY MATERIAL OBLIGATION ON ITS OWN OR ON IDAHO
POWER’S BEHALF.

(C)             THE PROVISIONS OF THIS SECTION 2.5 SHALL SURVIVE THE EXPIRATION
OR TERMINATION OF THIS AGREEMENT.

2.6              CONSIDERATION. 

(A)             NOT LESS THAN TWO (2) BUSINESS DAYS BEFORE THE CLOSING DATE, OR
AT SUCH OTHER TIME AS MAY BE MUTUALLY AGREED UPON BY THE PARTIES IN WRITING,
IDAHO POWER SHALL DELIVER TO PACIFICORP A WRITTEN NOTICE SETTING FORTH IDAHO
POWER’S GOOD FAITH ESTIMATE OF PACIFICORP’S HEMINGWAY OWNERSHIP INTEREST IN THE
TOTAL COSTS INCURRED AND PAID TO DATE FOR CONSTRUCTION OF THE HEMINGWAY
SUBSTATION FACILITIES, SUCH ESTIMATED AMOUNT BEING, SUBJECT TO SECTIONS 2.6(C)
AND 2.6(D), THE TOTAL CONSIDERATION TO BE PAID BY PACIFICORP TO IDAHO POWER AT
CLOSING FOR THE PACIFICORP ACQUIRED ASSETS (THE “PACIFICORP PURCHASE PRICE”). 
THE NOTICE PROVIDED UNDER THIS SECTION 2.6(A) SHALL PROVIDE SUFFICIENT DETAIL ON
THE CALCULATION OF THE PACIFICORP PURCHASE PRICE REASONABLY TO PERMIT AN AUDIT
OF SUCH PURCHASE PRICE SUBSEQUENT TO CLOSING IN ACCORDANCE WITH SECTION 2.6(D)
HEREOF.

(b)            Not less than two (2) Business Days before the Closing Date or at
such other time as may be mutually agreed upon by the Parties in writing,
PacifiCorp shall deliver to Idaho Power a written notice setting forth
PacifiCorp’s good faith estimate of Idaho Power’s Populus Ownership Interest in
the total Costs incurred and paid to date for construction of the Populus
Substation Facilities, such estimated amount being, subject to Sections 2.6(c)
and 2.6(d), the total consideration to be paid by Idaho Power to PacifiCorp at
Closing for the Idaho Power Acquired Assets (the “Idaho Power Purchase Price”). 
The notice provided under this

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Section 2.6(b) shall provide sufficient detail on the calculation of the Idaho
Power Purchase Price reasonably to permit an audit of such Purchase Price
subsequent to Closing in accordance with Section 2.6(d) hereof.

(C)        AT CLOSING, THE IDAHO POWER PURCHASE PRICE SHALL BE NETTED AGAINST
THE PACIFICORP PURCHASE PRICE AND THE PARTY WHOSE PURCHASE PRICE PURSUANT TO
SECTION 2.6(A) OR SECTION 2.6(B) IS GREATER SHALL PAY THE DIFFERENCE BETWEEN THE
TWO PURCHASE PRICES TO THE OTHER PARTY BY WIRE TRANSFER IN IMMEDIATELY AVAILABLE
FUNDS, IN THE LAWFUL CURRENCY OF THE UNITED STATES, TO AN ACCOUNT OR ACCOUNTS
DESIGNATED BY THE OTHER PARTY; PROVIDED, HOWEVER, THAT NOT MORE THAN ONE
HUNDRED, EIGHTY (180) DAYS AFTER THE CLOSING, (A) IDAHO POWER SHALL DELIVER TO
PACIFICORP A WRITTEN NOTICE SETTING FORTH PACIFICORP’S HEMINGWAY OWNERSHIP
INTEREST IN THE TOTAL COSTS INCURRED AND PAID FOR CONSTRUCTION OF THE HEMINGWAY
SUBSTATION FACILITIES FROM THE DATE OF THE NOTICE PROVIDED UNDER SECTION 2.6(A)
UNTIL THE CLOSING DATE AS WELL AS ANY COSTS INCURRED AND PAID FOR CONSTRUCTION
OF THE HEMINGWAY SUBSTATION FACILITIES NOT PREVIOUSLY IDENTIFIED IN THE NOTICE
PROVIDED UNDER SECTION 2.6(A) (THE “IDAHO POWER TRUE-UP NOTICE”), AND (B)
PACIFICORP SHALL DELIVER TO IDAHO POWER A WRITTEN NOTICE SETTING FORTH IDAHO
POWER’S POPULUS OWNERSHIP INTEREST IN THE TOTAL COSTS INCURRED AND PAID FOR
CONSTRUCTION OF THE POPULUS SUBSTATION FACILITIES FROM THE DATE OF THE NOTICE
PROVIDED UNDER SECTION 2.6(B) UNTIL THE CLOSING DATE AS WELL AS ANY COSTS
INCURRED AND PAID FOR CONSTRUCTION OF THE POPULUS SUBSTATION FACILITIES NOT
PREVIOUSLY IDENTIFIED IN THE NOTICE PROVIDED UNDER SECTION 2.6(B) (THE
“PACIFICORP TRUE-UP NOTICE”).  NOT MORE THAN FIVE (5) BUSINESS DAYS AFTER
DELIVERY OF THE LATER OF THE IDAHO POWER TRUE-UP NOTICE OR THE PACIFICORP
TRUE-UP NOTICE, THE PARTIES SHALL NET THE COSTS SET FORTH IN THE RESPECTIVE
TRUE-UP NOTICES AND THE PARTY WHOSE TRUE-UP NOTICE IDENTIFIES THE HIGHER AMOUNT
SHALL RECEIVE FROM THE OTHER PARTY A PAYMENT OF THE DIFFERENCE BY WIRE TRANSFER
IN IMMEDIATELY AVAILABLE FUNDS, IN THE LAWFUL CURRENCY OF THE UNITED STATES, TO
AN ACCOUNT OR ACCOUNTS DESIGNATED BY SUCH PARTY.

(D)(I)(A)          NOT EARLIER THAN THE DATE OF THE LATER OF THE IDAHO POWER
TRUE-UP NOTICE OR THE PACIFICORP TRUE-UP NOTICE, NOR MORE THAN TWO HUNDRED,
SEVENTY (270) DAYS AFTER THE CLOSING DATE, PACIFICORP MAY, AT ITS OWN COST, AT
ANY TIME DURING NORMAL BUSINESS HOURS AND WITH REASONABLE NOTICE OF NOT LESS
THAN TEN (10) BUSINESS DAYS TO IDAHO POWER, AUDIT THE BOOKS AND RECORDS OF IDAHO
POWER AND ANY OF ITS AFFILIATES INVOLVED WITH THE CONSTRUCTION OF THE HEMINGWAY
SUBSTATION FACILITIES (“PACIFICORP ACQUIRED ASSETS COST RECORDS”) TO THE EXTENT
REASONABLY RELATED TO THE COSTS INCURRED BY OR ON BEHALF OF IDAHO POWER AND ITS
AFFILIATES IN CONNECTION WITH THE CONSTRUCTION OF THE HEMINGWAY SUBSTATION
FACILITIES (“PACIFICORP ACQUIRED ASSETS COSTS”).  NOT EARLIER THAN THE DATE OF
THE LATER OF THE IDAHO POWER TRUE-UP NOTICE OR THE PACIFICORP TRUE-UP NOTICE,
NOR MORE THAN TWO HUNDRED, SEVENTY (270) DAYS AFTER THE CLOSING DATE, IDAHO
POWER MAY, AT ITS OWN COST, AT ANY TIME DURING NORMAL BUSINESS HOURS AND WITH
REASONABLE NOTICE OF NOT LESS THAN TEN (10) BUSINESS DAYS TO PACIFICORP, AUDIT
THE BOOKS AND RECORDS OF PACIFICORP AND ANY OF ITS AFFILIATES INVOLVED WITH THE
CONSTRUCTION OF THE POPULUS SUBSTATION FACILITIES (“IDAHO POWER ACQUIRED ASSETS
COST RECORDS”) TO THE EXTENT REASONABLY RELATED TO THE COSTS INCURRED BY OR ON
BEHALF OF PACIFICORP AND ITS AFFILIATES IN CONNECTION WITH THE CONSTRUCTION OF
THE POPULUS SUBSTATION FACILITIES (“IDAHO POWER ACQUIRED ASSETS COSTS”).

(d)(i)(B)           If any audit conducted pursuant to Section 2.6(d)(i)(A)
discloses that the PacifiCorp Acquired Assets Costs differ from the Costs used
for determining the PacifiCorp Purchase Price pursuant to this Section 2.6, or
that the Idaho Power Acquired Assets Costs differ from the Costs used for
purposes of determining the Idaho Power Purchase Price

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pursuant to this Section 2.6, then the Party conducting such audit shall notify
the other Party in writing of such difference (the “Disputed Costs Notice”). 
The Parties shall attempt, in good faith and for not less than thirty (30) days
(or such longer period as the Parties may mutually agree in writing)] following
the Disputed Costs Notice, to reach agreement on the appropriate amount of Costs
to be used for purposes of determining the Idaho Power Purchase Price and the
PacifiCorp Purchase Price, as applicable, and to adjust the Purchase Price paid
under Section 2.6(c) to reflect such agreement.

(II)        IF THE PARTIES ARE UNABLE TO REACH AGREEMENT UNDER SECTION
2.6(D)(I)(B), THEN THE PARTIES SHALL RETAIN AN INDEPENDENT ACCOUNTING FIRM TO
AUDIT THE IDAHO POWER ACQUIRED ASSETS COSTS AND/OR THE PACIFICORP ACQUIRED
ASSETS COSTS TO DETERMINE THE IDAHO POWER PURCHASE PRICE AND/OR THE PACIFICORP
PURCHASE PRICE, AS APPLICABLE.  THE DECISION OF THE INDEPENDENT ACCOUNTING FIRM
SHALL BE BINDING UPON THE PARTIES AND FINAL AND THE CONSIDERATION PROVIDED
PURSUANT TO SECTION 2.6(C) SHALL BE ADJUSTED TO REFLECT THE RESULTS OF THE
INDEPENDENT ACCOUNTING FIRM’S DETERMINATION.  EACH PARTY SHALL BE LIABLE FOR
FIFTY PERCENT (50%) OF THE INDEPENDENT ACCOUNTING FIRM’S CHARGES.

(III)       EACH PARTY SHALL, AND SHALL CAUSE ANY OF ITS RELEVANT AFFILIATES TO,
KEEP AND MAINTAIN ALL SUCH PACIFICORP ACQUIRED ASSETS COST RECORDS OR IDAHO
POWER ACQUIRED ASSETS COSTS RECORDS, AS APPLICABLE, TO THE EXTENT REASONABLY
RELATED TO THE DETERMINATION OF PACIFICORP ACQUIRED ASSETS COSTS OR IDAHO POWER
ACQUIRED ASSETS COSTS, AS APPLICABLE, AND MAKE SUCH RECORDS AVAILABLE TO THE
OTHER PARTY AND, IF APPLICABLE, THE INDEPENDENT ACCOUNTING FIRM, IN ACCORDANCE
WITH THE TERMS OF THIS AGREEMENT.  THE PARTY REQUESTING THE AUDIT SHALL
REIMBURSE ONE HUNDRED PERCENT (100%) OF ALL REASONABLE COSTS AND EXPENSES
(INCLUDING INTERNAL COSTS AND EXPENSES) INCURRED BY OR ON BEHALF OF THE OTHER
PARTY AND ANY OF ITS AFFILIATES IN COMPLYING WITH THE PROVISIONS OF THIS SECTION
2.6(D)(III), PROVIDED THAT EACH PARTY SHALL BE LIABLE FOR FIFTY PERCENT (50%) OF
ANY SUCH COSTS INCURRED BY EITHER PARTY AND ITS AFFILIATES IN COMPLYING WITH A
REQUEST BY THE INDEPENDENT ACCOUNTING FIRM.

2.7              [INTENTIONALLY OMITTED.]

2.8              PRORATION. 

(A)             PACIFICORP ACQUIRED ASSETS.  ALL TAXES (BUT NOT INCLUDING
TRANSFER TAXES) AND PRE-PAID EXPENSES (INCLUDING SECURITY DEPOSITS), IN EACH
CASE, TO THE EXTENT RELATING TO THE PACIFICORP ACQUIRED ASSETS, WILL BE PRORATED
AS OF THE EFFECTIVE TIME, WITH IDAHO POWER LIABLE TO THE EXTENT SUCH ITEMS
RELATE TO ANY PERIOD PRIOR TO THE EFFECTIVE TIME, AND PACIFICORP AND IDAHO POWER
EACH LIABLE TO THE EXTENT SUCH ITEMS RELATE TO ANY PERIOD FROM AND AFTER THE
EFFECTIVE TIME IN ACCORDANCE WITH THEIR RESPECTIVE HEMINGWAY OWNERSHIP
INTERESTS.

(B)            IDAHO POWER ACQUIRED ASSETS.  ALL TAXES (BUT NOT INCLUDING
TRANSFER TAXES) AND PRE-PAID EXPENSES (INCLUDING SECURITY DEPOSITS), IN EACH
CASE, TO THE EXTENT RELATING TO THE IDAHO POWER ACQUIRED ASSETS, WILL BE
PRORATED AS OF THE EFFECTIVE TIME, WITH PACIFICORP LIABLE TO THE EXTENT SUCH
ITEMS RELATE TO ANY PERIOD PRIOR TO THE EFFECTIVE TIME, AND PACIFICORP AND IDAHO
POWER EACH LIABLE TO THE EXTENT SUCH ITEMS RELATE TO ANY PERIOD FROM AND AFTER
THE EFFECTIVE TIME IN ACCORDANCE WITH THEIR RESPECTIVE POPULUS OWNERSHIP
INTERESTS.

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(C)             TRANSFER TAXES.  THE AGGREGATE AMOUNT OF ALL TRANSFER TAXES, IF
ANY, TO THE EXTENT RELATING TO THE PACIFICORP ACQUIRED ASSETS AND THE IDAHO
POWER ACQUIRED ASSETS WILL BE SHARED EQUALLY BY THE PARTIES.  IDAHO POWER WILL
FILE, TO THE EXTENT REQUIRED BY APPLICABLE GOVERNMENTAL REQUIREMENTS, ALL
NECESSARY TAX RETURNS AND OTHER DOCUMENTATION WITH RESPECT TO ALL SUCH TRANSFER
TAXES RELATING TO THE PACIFICORP ACQUIRED ASSETS, AND IF REQUIRED BY APPLICABLE
GOVERNMENTAL REQUIREMENTS, PACIFICORP WILL JOIN IN THE EXECUTION OF ANY SUCH TAX
RETURNS OR OTHER DOCUMENTATION, PROVIDED THAT PACIFICORP SHALL FIRST HAVE AN
OPPORTUNITY TO REVIEW AND APPROVE (SUCH APPROVAL NOT TO BE UNREASONABLY
WITHHELD) SUCH TAX RETURNS.  PACIFICORP WILL FILE, TO THE EXTENT REQUIRED BY
APPLICABLE GOVERNMENTAL REQUIREMENTS, ALL NECESSARY TAX RETURNS AND OTHER
DOCUMENTATION WITH RESPECT TO ALL SUCH TRANSFER TAXES RELATING TO THE IDAHO
POWER ACQUIRED ASSETS, AND IF REQUIRED BY APPLICABLE GOVERNMENTAL REQUIREMENTS,
IDAHO POWER WILL JOIN IN THE EXECUTION OF ANY SUCH TAX RETURNS OR OTHER
DOCUMENTATION, PROVIDED THAT IDAHO POWER SHALL FIRST HAVE AN OPPORTUNITY TO
REVIEW AND APPROVE (SUCH APPROVAL NOT TO BE UNREASONABLY WITHHELD) SUCH TAX
RETURNS.

2.9              TIME AND PLACE OF CLOSING.  UNLESS THIS AGREEMENT IS TERMINATED
EARLY IN ACCORDANCE WITH SECTION 5.1, AND UPON THE TERMS AND SUBJECT TO THE
SATISFACTION OF THE CONDITIONS CONTAINED IN SECTION 2.11 (OR WAIVER THEREOF AS
PROVIDED THEREIN), THE CLOSING OF PURCHASE AND SALE OF THE PACIFICORP ACQUIRED
ASSETS AND THE IDAHO POWER ACQUIRED ASSETS AND ASSUMPTION BY PACIFICORP OF THE
PACIFICORP ASSUMED OBLIGATIONS AND THE ASSUMPTION BY IDAHO POWER OF THE IDAHO
POWER ASSUMED OBLIGATIONS (THE “CLOSING”) WILL TAKE PLACE AT THE OFFICES OF
TROUTMAN SANDERS LLP, 401 9TH STREET, N.W., SUITE 1000, WASHINGTON, D.C.  20004,
AT 10:00 A.M., LOCAL TIME, ON THE SECOND (2ND) BUSINESS DAY FOLLOWING THE DATE
ON WHICH THE CONDITIONS SET FORTH IN SECTION 2.11 (OTHER THAN CONDITIONS TO BE
SATISFIED BY DELIVERIES AT THE CLOSING) HAVE BEEN SATISFIED OR WAIVED, OR AT
SUCH OTHER PLACE AND TIME AS THE PARTIES MAY MUTUALLY AGREE IN WRITING.  THE
DATE ON WHICH THE CLOSING OCCURS IS REFERRED TO HEREIN AS THE “CLOSING DATE.” 
THE PURCHASE AND SALE OF THE PACIFICORP ACQUIRED ASSETS AND THE IDAHO POWER
ACQUIRED ASSETS AND THE ASSUMPTION BY PACIFICORP OF THE PACIFICORP ASSUMED
OBLIGATIONS AND THE ASSUMPTION BY IDAHO POWER OF THE IDAHO POWER ASSUMED
OBLIGATIONS WILL BE EFFECTIVE AS OF 12:00:01 A.M., PACIFIC TIME ON THE CLOSING
DATE (THE “EFFECTIVE TIME”).

2.10          CLOSING DELIVERABLES.

(A)             DELIVERIES BY IDAHO POWER.  AT OR PRIOR TO THE CLOSING, IDAHO
POWER WILL DELIVER TO PACIFICORP (IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO
PACIFICORP), EACH OF THE FOLLOWING:

(I)                 A BILL OF SALE FOR THE HEMINGWAY SUBSTATION FACILITIES
(“HEMINGWAY BILL OF SALE”) IN THE FORM ATTACHED HERETO AS EXHIBIT C, OR
OTHERWISE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE PARTIES, DULY
EXECUTED BY IDAHO POWER;

(II)               IN THE EVENT THAT THERE ARE ANY HEMINGWAY TRANSFERABLE
PERMITS, AN ASSIGNMENT AND ASSUMPTION AGREEMENT (“HEMINGWAY ASSIGNMENT AND
ASSUMPTION AGREEMENT”) IN THE FORM ATTACHED HERETO AS EXHIBIT E, OR OTHERWISE IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE PARTIES, DULY EXECUTED BY
IDAHO POWER;

 

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(III)             IN THE EVENT THAT THERE ARE ANY POPULUS TRANSFERABLE PERMITS,
AN ASSIGNMENT AND ASSUMPTION AGREEMENT (“POPULUS ASSIGNMENT AND ASSUMPTION
AGREEMENT” IN THE FORM ATTACHED HERETO AS EXHIBIT F, OR OTHERWISE IN FORM AND
SUBSTANCE SATISFACTORY TO THE PARTIES, DULY EXECUTED BY IDAHO POWER;

(IV)             A JOINT OWNERSHIP, OPERATING AND MAINTENANCE AGREEMENT WITH
RESPECT TO THE HEMINGWAY SUBSTATION FACILITIES (THE “HEMINGWAY JOINT OWNERSHIP
AND OPERATING AGREEMENT”) IN THE FORM ATTACHED HERETO AS EXHIBIT G, OR OTHERWISE
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE PARTIES, DULY EXECUTED BY
IDAHO POWER;

(V)               A JOINT OWNERSHIP, OPERATING AND MAINTENANCE AGREEMENT WITH
RESPECT TO THE POPULUS SUBSTATION FACILITIES (THE “POPULUS JOINT OWNERSHIP AND
OPERATING AGREEMENT”) IN THE FORM ATTACHED HERETO AS EXHIBIT H, OR OTHERWISE IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE PARTIES, DULY EXECUTED BY
IDAHO POWER;

(VI)             ONE OR MORE EASEMENT AGREEMENTS (COLLECTIVELY, THE “HEMINGWAY
EASEMENT AGREEMENT”) IN THE FORM ATTACHED HERETO AS EXHIBIT I, OR OTHERWISE IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE PARTIES, DULY EXECUTED BY
IDAHO POWER;

(VII)           ONE OR MORE EASEMENT AGREEMENTS (COLLECTIVELY, THE “POPULUS
EASEMENT AGREEMENT”) IN THE FORM ATTACHED HERETO AS EXHIBIT J, OR OTHERWISE IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE PARTIES, DULY EXECUTED BY
IDAHO POWER;

(VIII)         A DEED FOR THE HEMINGWAY SUBSTATION FACILITIES (THE “HEMINGWAY
DEED”) IN THE FORM ATTACHED HERETO AS EXHIBIT M, OR OTHERWISE IN FORM AND
SUBSTANCE SATISFACTORY TO THE PARTIES, DULY EXECUTED BY IDAHO POWER.

(IX)             A CERTIFICATE DULY EXECUTED BY AN AUTHORIZED OFFICER OR
REPRESENTATIVE OF IDAHO POWER, DATED AS OF THE CLOSING DATE, CERTIFYING THAT
EACH OF THE CONDITIONS SET FORTH IN SECTION 2.11(B)(I) AND SECTION 2.11(B)(II)
HAS BEEN SATISFIED AS OF THE CLOSING DATE;

(X)               COPIES OF ALL IDAHO POWER REQUIRED REGULATORY APPROVALS AND
ANY OTHER CONSENTS, WAIVERS OR APPROVALS OBTAINED BY IDAHO POWER FROM THIRD
PARTIES IN CONNECTION WITH THIS AGREEMENT;

(XI)             ALL SUCH OTHER INSTRUMENTS OF ASSIGNMENT OR CONVEYANCE PROPERLY
EXECUTED AND ACKNOWLEDGED BY IDAHO POWER IN CUSTOMARY FORM AS ARE REASONABLY
REQUESTED BY PACIFICORP IN ORDER TO TRANSFER TO AND VEST IN PACIFICORP
PACIFICORP’S HEMINGWAY OWNERSHIP INTEREST IN ALL OF IDAHO POWER’S RIGHT, TITLE
AND INTEREST IN, TO AND UNDER THE HEMINGWAY SUBSTATION FACILITIES AND HEMINGWAY
TRANSFERABLE PERMITS (IF ANY) IN ACCORDANCE WITH THIS AGREEMENT; AND

(XII)           ANY OTHER DOCUMENTS OR INSTRUMENTS REASONABLY REQUIRED BY
PACIFICORP TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY AND REASONABLY
REQUESTED OF IDAHO POWER PRIOR TO THE CLOSING DATE.

 

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(B)            DELIVERIES BY PACIFICORP.  AT OR PRIOR TO THE CLOSING, PACIFICORP
WILL DELIVER TO IDAHO POWER (IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO
IDAHO POWER), EACH OF THE FOLLOWING:

(I)                 A BILL OF SALE FOR THE POPULUS SUBSTATION FACILITIES
(“POPULUS BILL OF SALE”) IN THE FORM ATTACHED HERETO AS EXHIBIT D, OR OTHERWISE
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE PARTIES, DULY EXECUTED BY
PACIFICORP;

(II)               IN THE EVENT THAT THERE ARE ANY HEMINGWAY TRANSFERABLE
PERMITS, THE HEMINGWAY ASSIGNMENT AND ASSUMPTION AGREEMENT IN THE FORM ATTACHED
HERETO AS EXHIBIT E, OR OTHERWISE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY
TO THE PARTIES, DULY EXECUTED BY PACIFICORP;

(III)             IN THE EVENT THAT THERE ARE ANY POPULUS TRANSFERABLE PERMITS,
THE POPULUS ASSIGNMENT AND ASSUMPTION AGREEMENT IN THE FORM ATTACHED HERETO AS
EXHIBIT F, OR OTHERWISE IN FORM AND SUBSTANCE SATISFACTORY TO THE PARTIES, DULY
EXECUTED BY PACIFICORP;

(IV)             THE HEMINGWAY JOINT OWNERSHIP AND OPERATING AGREEMENT IN THE
FORM ATTACHED HERETO AS EXHIBIT G, OR OTHERWISE IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE PARTIES, DULY EXECUTED BY PACIFICORP;

(V)               THE POPULUS JOINT OWNERSHIP AND OPERATING AGREEMENT IN THE
FORM ATTACHED HERETO AS EXHIBIT H, OR OTHERWISE IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE PARTIES, DULY EXECUTED BY PACIFICORP;

(VI)             THE HEMINGWAY EASEMENT AGREEMENT IN THE FORM ATTACHED HERETO AS
EXHIBIT I, OR OTHERWISE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
PARTIES, DULY EXECUTED BY PACIFICORP;

(VII)           THE POPULUS EASEMENT AGREEMENT IN THE FORM ATTACHED HERETO AS
EXHIBIT J, OR OTHERWISE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
PARTIES, DULY EXECUTED BY PACIFICORP;

(VIII)         A DEED FOR THE POPULUS SUBSTATION FACILITIES (THE “POPULUS DEED”
IN THE FORM ATTACHED HERETO AS EXHIBIT N, OR OTHERWISE IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE PARTIES, DULY EXECUTED BY PACIFICORP.

(IX)             A CERTIFICATE DULY EXECUTED BY AN AUTHORIZED OFFICER OR
REPRESENTATIVE OF PACIFICORP, DATED AS OF THE CLOSING DATE, CERTIFYING THAT EACH
OF THE CONDITIONS SET FORTH IN SECTION 2.11(A)(I) AND SECTION 2.11(A)(II) HAS
BEEN SATISFIED AS OF THE CLOSING DATE;

(X)               COPIES OF ALL PACIFICORP REQUIRED REGULATORY APPROVALS AND ANY
OTHER CONSENTS, WAIVERS OR APPROVALS OBTAINED BY PACIFICORP FROM THIRD PARTIES
IN CONNECTION WITH THIS AGREEMENT;

(xi)             all such other instruments of assignment or conveyance properly
executed and acknowledged by PacifiCorp in customary form as are reasonably
requested by Idaho Power in order to transfer to and vest in Idaho Power Idaho
Power’s Populus Ownership

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Interest in all of PacifiCorp’s right, title and interest in, to and under the
Populus Substation Facilities and Populus Transferable Permits (if any) in
accordance with this Agreement; and

(XII)           ANY OTHER DOCUMENTS OR INSTRUMENTS REASONABLY REQUIRED BY IDAHO
POWER TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY AND REASONABLY
REQUESTED OF PACIFICORP PRIOR TO THE CLOSING DATE.

2.11          CONDITIONS PRECEDENT TO CLOSING.

(A)             IDAHO POWER’S CONDITIONS PRECEDENT.  IDAHO POWER’S OBLIGATION TO
SELL AND TRANSFER TO PACIFICORP THE PACIFICORP ACQUIRED ASSETS, AND TO PURCHASE
AND ACCEPT FROM PACIFICORP THE IDAHO POWER ACQUIRED ASSETS, AND TO TAKE THE
OTHER ACTIONS REQUIRED TO BE TAKEN BY IDAHO POWER AT THE CLOSING IS SUBJECT TO
THE SATISFACTION, AT OR PRIOR TO THE CLOSING, OF EACH OF THE FOLLOWING
CONDITIONS (ANY OF WHICH MAY BE WAIVED, IN WHOLE OR IN PART, BY IDAHO POWER IN
WRITING):

(I)                 ACCURACY OF REPRESENTATIONS.  EXCEPT AS PROVIDED IN SECTION
4.6, ALL REPRESENTATIONS AND WARRANTIES MADE IN THIS AGREEMENT BY PACIFICORP
THAT ARE QUALIFIED WITH RESPECT TO MATERIALITY (WHETHER BY REFERENCE TO MATERIAL
ADVERSE EFFECT OR OTHERWISE) ARE TRUE AND CORRECT, AND ALL REPRESENTATIONS AND
WARRANTIES MADE IN THIS AGREEMENT BY PACIFICORP THAT ARE NOT SO QUALIFIED ARE
TRUE AND CORRECT IN ALL MATERIAL RESPECTS, IN EACH CASE, AS OF THE CLOSING DATE
BY REFERENCE TO THE FACTS AND CIRCUMSTANCES THEN EXISTING;

(II)               PACIFICORP’S PERFORMANCE.  PACIFICORP SHALL HAVE COMPLIED IN
ALL MATERIAL RESPECTS WITH ALL COVENANTS AND AGREEMENTS MADE BY IT IN ARTICLE IV
TO BE PERFORMED PRIOR TO CLOSING;

(III)             DELIVERY OF DOCUMENTS.  EACH DOCUMENT AND OTHER ITEM REQUIRED
TO BE DELIVERED BY PACIFICORP PURSUANT TO SECTION 2.10(B) SHALL HAVE BEEN
DELIVERED TO IDAHO POWER;

(IV)             REQUIRED REGULATORY APPROVALS.  ALL REQUIRED REGULATORY
APPROVALS SHALL HAVE BEEN OBTAINED AND BE IN FULL FORCE AND EFFECT, AND THE
TERMS AND CONDITIONS OF THE REQUIRED REGULATORY APPROVALS, INDIVIDUALLY OR IN
THE AGGREGATE, SHALL NOT HAVE AND SHALL NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT ON IDAHO POWER OR ANY OF ITS AFFILIATES;

(V)               NO PROHIBITION.  NEITHER THE CONSUMMATION NOR THE PERFORMANCE
OF THE CONTEMPLATED TRANSACTION SHALL, DIRECTLY OR INDIRECTLY (WITH OR WITHOUT
NOTICE OR LAPSE OF TIME), MATERIALLY CONTRAVENE, OR CONFLICT WITH, OR RESULT IN
A MATERIAL VIOLATION OF, ANY GOVERNMENTAL REQUIREMENT OR GOVERNMENTAL
AUTHORIZATION APPLICABLE TO THE HEMINGWAY SUBSTATION OR IDAHO POWER OR ANY OF
ITS AFFILIATES;

(VI)             NO INJUNCTION.  NO LITIGATION OR INJUNCTION SHALL BE PENDING,
THREATENED OR REASONABLY LIKELY TO BE COMMENCED OR ISSUED (A) INVOLVING ANY
CHALLENGE TO, OR SEEKING DAMAGES OR OTHER RELIEF IN CONNECTION WITH THE
CONTEMPLATED TRANSACTION, (B) THAT MAY HAVE THE EFFECT OF PREVENTING, DELAYING,
MAKING ILLEGAL, OR OTHERWISE INTERFERING WITH THE

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CONTEMPLATED TRANSACTION, OR (C) IMPOSING OR SEEKING TO IMPOSE MATERIAL DAMAGES
OR SANCTIONS DIRECTLY ARISING OUT OF THE CONTEMPLATED TRANSACTION ON IDAHO POWER
OR ANY OF ITS AFFILIATES;

(VII)           RELEASE OF LIENS.  PACIFICORP SHALL HAVE RECEIVED ALL RELEASES
OF LIENS AND OTHER ENCUMBRANCES, OTHER THAN PACIFICORP PERMITTED ENCUMBRANCES,
FROM LENDERS OR OTHER PARTIES APPLICABLE TO THE IDAHO POWER ACQUIRED ASSETS IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO IDAHO POWER;

(VIII)         ENERGIZATION.  AS OF THE CLOSING DATE, THE HEMINGWAY SUBSTATION
AND THE POPULUS SUBSTATION SHALL NEVER HAVE BEEN ENERGIZED TO THE BULK POWER
ELECTRIC TRANSMISSION SYSTEM; AND

(IX)             NO MATERIAL ADVERSE EFFECT.  SINCE THE EFFECTIVE DATE, NO
MATERIAL ADVERSE EFFECT ON IDAHO POWER OR ANY OF ITS AFFILIATES SHALL HAVE
OCCURRED AND BE CONTINUING.

(B)            PACIFICORP’S CONDITIONS PRECEDENT.  PACIFICORP’S OBLIGATION TO
SELL AND TRANSFER TO IDAHO POWER THE IDAHO POWER ACQUIRED ASSETS, AND TO
PURCHASE AND ACQUIRE FROM IDAHO POWER THE PACIFICORP ACQUIRED ASSETS, AND TO
TAKE THE OTHER ACTIONS REQUIRED TO BE TAKEN BY PACIFICORP AT THE CLOSING IS
SUBJECT TO THE SATISFACTION, AT OR PRIOR TO THE CLOSING, OF EACH OF THE
FOLLOWING CONDITIONS (ANY OF WHICH MAY BE WAIVED, IN WHOLE OR IN PART, BY
PACIFICORP IN WRITING):

(I)                 ACCURACY OF REPRESENTATIONS.  EXCEPT AS PROVIDED IN SECTION
4.6, ALL REPRESENTATIONS AND WARRANTIES MADE IN THIS AGREEMENT BY IDAHO POWER
THAT ARE QUALIFIED WITH RESPECT TO MATERIALITY (WHETHER BY REFERENCE TO MATERIAL
ADVERSE EFFECT OR OTHERWISE) ARE TRUE AND CORRECT, AND ALL REPRESENTATIONS AND
WARRANTIES MADE IN THIS AGREEMENT BY IDAHO POWER THAT ARE NOT SO QUALIFIED ARE
TRUE AND CORRECT IN ALL MATERIAL RESPECTS, IN EACH CASE, AS OF THE CLOSING DATE
BY REFERENCE TO THE FACTS AND CIRCUMSTANCES THEN EXISTING;

(II)               IDAHO POWER’S PERFORMANCE.  IDAHO POWER SHALL HAVE COMPLIED
IN ALL MATERIAL RESPECTS WITH ALL COVENANTS AND AGREEMENTS MADE BY IT IN ARTICLE
IV TO BE PERFORMED PRIOR TO CLOSING;

(III)             DELIVERY OF DOCUMENTS.  EACH DOCUMENT AND OTHER ITEM REQUIRED
TO BE DELIVERED BY IDAHO POWER PURSUANT TO SECTION 2.10(A) SHALL HAVE BEEN
DELIVERED TO PACIFICORP;

(IV)             REQUIRED REGULATORY APPROVALS.  ALL REQUIRED REGULATORY
APPROVALS SHALL HAVE BEEN OBTAINED AND BE IN FULL FORCE AND EFFECT, AND THE
TERMS AND CONDITIONS OF THE REQUIRED REGULATORY APPROVALS, INDIVIDUALLY OR IN
THE AGGREGATE, SHALL NOT HAVE AND SHALL NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT ON PACIFICORP OR ANY OF ITS AFFILIATES;

(V)               NO PROHIBITION.  NEITHER THE CONSUMMATION NOR THE PERFORMANCE
OF THE CONTEMPLATED TRANSACTION SHALL, DIRECTLY OR INDIRECTLY (WITH OR WITHOUT
NOTICE OR LAPSE OF TIME), MATERIALLY CONTRAVENE, OR CONFLICT WITH, OR RESULT IN
A MATERIAL VIOLATION OF, ANY GOVERNMENTAL REQUIREMENT OR GOVERNMENTAL
AUTHORIZATION APPLICABLE TO THE POPULUS SUBSTATION OR PACIFICORP OR ANY OF ITS
AFFILIATES;

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(VI)             NO INJUNCTION.  NO LITIGATION OR INJUNCTION SHALL BE PENDING,
THREATENED OR REASONABLY LIKELY TO BE COMMENCED OR ISSUED (A) INVOLVING ANY
CHALLENGE TO, OR SEEKING DAMAGES OR OTHER RELIEF IN CONNECTION WITH THE
CONTEMPLATED TRANSACTION, (B) THAT MAY HAVE THE EFFECT OF PREVENTING, DELAYING,
MAKING ILLEGAL, OR OTHERWISE INTERFERING WITH THE CONTEMPLATED TRANSACTION, OR
(C) IMPOSING OR SEEKING TO IMPOSE MATERIAL DAMAGES OR SANCTIONS DIRECTLY ARISING
OUT OF THE CONTEMPLATED TRANSACTION ON PACIFICORP OR ANY OF ITS AFFILIATES;

(VII)           RELEASE OF LIENS.  IDAHO POWER SHALL HAVE RECEIVED ALL RELEASES
OF LIENS AND OTHER ENCUMBRANCES, OTHER THAN IDAHO POWER PERMITTED ENCUMBRANCES,
FROM LENDERS OR OTHER PARTIES APPLICABLE TO THE PACIFICORP ACQUIRED ASSETS IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO PACIFICORP;

(VIII)         ENERGIZATION.  AS OF THE CLOSING DATE, THE HEMINGWAY SUBSTATION
AND THE POPULUS SUBSTATION SHALL NEVER HAVE BEEN ENERGIZED TO THE BULK POWER
ELECTRIC TRANSMISSION SYSTEM; AND

(IX)             NO MATERIAL ADVERSE EFFECT.  SINCE THE EFFECTIVE DATE, NO
MATERIAL ADVERSE EFFECT ON PACIFICORP OR ANY OF ITS AFFILIATES SHALL HAVE
OCCURRED AND BE CONTINUING.

2.12          RELEASE OF MORTGAGE LIENS OR OTHER ENCUMBRANCES.

(A)        AS SOON AS REASONABLY PRACTICABLE FOLLOWING THE CLOSING, BUT IN ANY
EVENT, NOT LATER THAN THIRTY (30) DAYS AFTER THE CLOSING DATE, IDAHO POWER WILL
OBTAIN A RELEASE OF THE LIEN OF THE IDAHO POWER MORTGAGE ON THE PACIFICORP
ACQUIRED ASSETS AND THE “JOINTLY-DEVELOPED TRANSMISSION FACILITIES,” AS DEFINED
IN THE HEMINGWAY JOINT OWNERSHIP AND OPERATING AGREEMENT.  THE RELEASE SHALL BE
IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO PACIFICORP AND IDAHO POWER WILL
PROMPTLY PROVIDE A COPY OF SUCH RELEASE TO PACIFICORP.

 

(B)        AS SOON AS REASONABLY PRACTICABLE FOLLOWING THE CLOSING, BUT IN ANY
EVENT, NOT LATER THAN THIRTY (30) DAYS AFTER THE CLOSING DATE, IDAHO POWER WILL
USE COMMERCIALLY REASONABLE EFFORTS TO OBTAIN A MODIFICATION OF THE HEMINGWAY
BLM RIGHT-OF-WAY GRANT TO ADD PACIFICORP AS A PARTY THERETO ELIGIBLE TO EXERCISE
ALL RIGHTS AND BENEFITS ENJOYED BY IDAHO POWER THEREUNDER.  THE MODIFICATION
SHALL BE IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO PACIFICORP, AND IDAHO
POWER WILL PROMPTLY PROVIDE TO PACIFICORP A COPY OF THE HEMINGWAY BLM
RIGHT-OF-WAY GRANT AS SO MODIFIED.

 

(C)        AS SOON AS REASONABLY PRACTICABLE FOLLOWING THE CLOSING, BUT IN ANY
EVENT, NOT LATER THAN THIRTY (30) DAYS AFTER THE CLOSING DATE, PACIFICORP WILL
OBTAIN A RELEASE OF THE LIEN OF THE PACIFICORP MORTGAGE ON THE IDAHO POWER
ACQUIRED ASSETS AND THE “JOINTLY-DEVELOPED TRANSMISSION FACILITIES,” AS DEFINED
IN THE POPULUS JOINT OWNERSHIP AND OPERATING AGREEMENT.  THE RELEASE SHALL BE IN
FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO IDAHO POWER AND PACIFICORP WILL
PROMPTLY PROVIDE A COPY OF SUCH RELEASE TO IDAHO POWER.

 

(d)         The obligations under this Section 2.12 shall continue in full force
and effect notwithstanding the occurrence of the Closing.

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ARTICLE III
REPRESENTATIONS AND WARRANTIES

3.1              REPRESENTATIONS AND WARRANTIES OF IDAHO POWER.  AS AN
INDUCEMENT TO PACIFICORP TO ENTER INTO THIS AGREEMENT AND TO CONSUMMATE THE
CONTEMPLATED TRANSACTIONS HEREBY, IDAHO POWER REPRESENTS AND WARRANTS TO
PACIFICORP AS FOLLOWS:

(A)             IT IS DULY FORMED, VALIDLY EXISTING AND IN GOOD STANDING UNDER
THE LAWS OF THE STATE OF IDAHO.

(B)            IT HAS ALL NECESSARY CORPORATE POWER AND AUTHORITY TO EXECUTE AND
DELIVER THIS AGREEMENT AND EACH RELATED DOCUMENT TO WHICH IT WILL BE A PARTY AND
TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT AND EACH SUCH RELATED DOCUMENT,
AND THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND EACH RELATED DOCUMENT TO
WHICH IT WILL BE A PARTY AND THE PERFORMANCE BY IT OF THIS AGREEMENT AND EACH
SUCH RELATED DOCUMENT HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE
ACTION ON ITS PART.

(C)             THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND EACH RELATED
DOCUMENT TO WHICH IT WILL BE A PARTY AND THE PERFORMANCE BY IT OF THIS AGREEMENT
AND EACH SUCH RELATED DOCUMENT DO NOT AND WILL NOT: (I) VIOLATE ITS
ORGANIZATIONAL DOCUMENTS; (II) VIOLATE ANY GOVERNMENTAL REQUIREMENTS APPLICABLE
TO IT; OR (III) RESULT IN A BREACH OF OR CONSTITUTE A DEFAULT OF ANY MATERIAL
AGREEMENT TO WHICH IT IS A PARTY.

(D)            THIS AGREEMENT HAS BEEN, AND EACH RELATED DOCUMENT TO WHICH IT
WILL BE A PARTY WILL BE, DULY AND VALIDLY EXECUTED AND DELIVERED BY IT AND
CONSTITUTES, OR WILL CONSTITUTE UPON EXECUTION, ITS LEGAL, VALID AND BINDING
OBLIGATION ENFORCEABLE AGAINST IT IN ACCORDANCE WITH ITS TERMS, EXCEPT AS THE
SAME MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY OR OTHER SIMILAR LAWS AFFECTING
CREDITORS’ RIGHTS GENERALLY AND BY PRINCIPLES OF EQUITY REGARDLESS OF WHETHER
SUCH PRINCIPLES ARE CONSIDERED IN A PROCEEDING AT LAW OR IN EQUITY.

(E)             SCHEDULE 3.1(E) LISTS ALL MATERIAL GOVERNMENTAL AUTHORIZATIONS
REQUIRED BY GOVERNMENTAL REQUIREMENTS TO HAVE BEEN OBTAINED BY IT AS OF THE DATE
HEREOF IN CONNECTION WITH THE (I) DUE EXECUTION AND DELIVERY OF, AND PERFORMANCE
BY IT OF ITS OBLIGATIONS UNDER, THIS AGREEMENT AND EACH RELATED DOCUMENT TO
WHICH IT WILL BE A PARTY, AND THE CONSUMMATION OF THE CONTEMPLATED TRANSACTIONS,
AND (II) THE OWNERSHIP, USE AND OPERATION OF THE HEMINGWAY ACQUIRED ASSETS AND
THE POPULUS ACQUIRED ASSETS AS THESE FACILITIES ARE REASONABLY EXPECTED TO BE
OWNED, USED AND OPERATED IN ACCORDANCE WITH THE PROVISIONS OF THE HEMINGWAY
JOINT OWNERSHIP AND OPERATING AGREEMENT AND THE POPULUS JOINT OWNERSHIP AND
OPERATING AGREEMENT ON THE DATE SUCH FACILITIES ENTER COMMERCIAL OPERATION
(COLLECTIVELY, THE “IDAHO POWER REQUIRED REGULATORY APPROVALS”).  EXCEPT AS
DISCLOSED IN SCHEDULE 3.1(E), EACH OF THE IDAHO POWER REQUIRED REGULATORY
APPROVALS HAS BEEN DULY OBTAINED OR MADE AND IS VALID, BINDING AND IN FULL FORCE
AND EFFECT.

(f)             Except as disclosed in Schedule 3.1(f), there are no material
Liabilities related to the PacifiCorp Acquired Assets, whether or not required
by GAAP to be disclosed in a balance sheet, other than the lien of the Idaho
Power Mortgage on the PacifiCorp Acquired

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Assets, which will be released after Closing in accordance with Section 2.12(a)
hereof.  Except as set forth on Schedule 3.1(f), Idaho Power does not have any
obligations (absolute or contingent) related to the PacifiCorp Acquired Assets
to provide funds on behalf of, or to guarantee any debt, liability or obligation
of, any Person.

(G)            EXCEPT AS SET FORTH ON SCHEDULE 3.1(G), (I) IDAHO POWER OWNS GOOD
AND MARKETABLE TITLE TO THE PACIFICORP ACQUIRED ASSETS AND (II) IDAHO POWER OWNS
GOOD AND MARKETABLE TITLE IN FEE OR GOOD AND MARKETABLE LEASEHOLD TITLE TO THE
HEMINGWAY SUBSTATION SITE AND THERE EXISTS NO ENCUMBRANCES (OTHER THAN IDAHO
POWER PERMITTED ENCUMBRANCES) APPLICABLE TO THE HEMINGWAY SUBSTATION SITE THAT
WOULD RESTRICT THE OWNERSHIP, USE OR OPERATION OF THE HEMINGWAY SUBSTATION (AS
THOSE FACILITIES ARE REASONABLY EXPECTED TO BE OPERATED IN ACCORDANCE WITH THE
PROVISIONS OF THE HEMINGWAY JOINT OWNERSHIP AND OPERATING AGREEMENT ON THE DATE
THE FACILITIES ENTER COMMERCIAL OPERATION) OR THE GRANT OF THE HEMINGWAY
EASEMENTS PROVIDED FOR IN THE HEMINGWAY EASEMENT AGREEMENT, AND (III) THERE
EXISTS NO DEFAULTS OR EVENTS WHICH WITH THE PASSAGE OF TIME OR THE GIVING OF
NOTICE OR BOTH WOULD BECOME A DEFAULT) UNDER THE HEMINGWAY BLM RIGHT-OF-WAY
GRANT.

(H)            ENVIRONMENTAL.

(I)                 SCHEDULE 3.1(H)(I)-A SETS FORTH A LIST OF ALL MATERIAL
ENVIRONMENTAL PERMITS HELD BY IDAHO POWER FOR THE OPERATION OF THE PACIFICORP
ACQUIRED ASSETS.  EXCEPT AS SET FORTH ON SCHEDULE 3.1(H)(I)-B, (1) IDAHO POWER
(TO THE EXTENT RELATED TO THE PACIFICORP ACQUIRED ASSETS) IS IN COMPLIANCE WITH
ALL APPLICABLE ENVIRONMENTAL LAWS, (2) TO IDAHO POWER’S KNOWLEDGE, IDAHO POWER
POSSESSES ALL ENVIRONMENTAL PERMITS REQUIRED UNDER ENVIRONMENTAL LAWS FOR THE
OPERATION OF THE PACIFICORP ACQUIRED ASSETS (AS THESE FACILITIES ARE REASONABLY
EXPECTED TO BE OPERATED IN ACCORDANCE WITH THE PROVISIONS OF THE HEMINGWAY JOINT
OWNERSHIP AND OPERATING AGREEMENT ON THE DATE THE FACILITIES ENTER COMMERCIAL
OPERATION) AND IS IN COMPLIANCE WITH SUCH ENVIRONMENTAL PERMITS; AND (3) IDAHO
POWER HAS RECEIVED NO WRITTEN NOTICE THAT ANY ENVIRONMENTAL PERMIT REQUIRED
UNDER ENVIRONMENTAL LAWS FOR THE OPERATION OF THE PACIFICORP ACQUIRED ASSETS IS
SUBJECT TO TERMINATION, MODIFICATION OR REVOCATION.

(II)               EXCEPT AS SET FORTH ON SCHEDULE 3.1(H)(II), TO IDAHO POWER’S
KNOWLEDGE NEITHER IDAHO POWER NOR ANY AFFILIATE OF IDAHO POWER HAS RECEIVED
WITHIN THE LAST FIVE (5) YEARS AND AT ANY PRIOR TIME, ANY WRITTEN NOTICE,
REPORT, REQUEST FOR INFORMATION OR OTHER INFORMATION REGARDING ANY ACTUAL OR
ALLEGED VIOLATION OF ENVIRONMENTAL LAWS OR ANY LIABILITIES OR POTENTIAL
LIABILITIES, INCLUDING ANY INVESTIGATORY, REMEDIAL, OR CORRECTIVE OBLIGATIONS,
RELATING TO THE OPERATION OF THE PACIFICORP ACQUIRED ASSETS ARISING UNDER OR
RELATING TO ENVIRONMENTAL LAWS OR REGARDING HAZARDOUS MATERIALS.

(III)             EXCEPT AS SET FORTH ON SCHEDULE 3.1(H)(III), (1) TO IDAHO
POWER’S KNOWLEDGE, IDAHO POWER HAS NOT CAUSED ANY RELEASE, AND THERE IS AND HAS
BEEN NO OTHER RELEASE FROM, IN, ON, BENEATH, OR AFFECTING THE PACIFICORP
ACQUIRED ASSETS THAT COULD FORM A BASIS FOR AN ENVIRONMENTAL CLAIM, AND (2)
IDAHO POWER HAS NOT RECEIVED WRITTEN NOTICE OF ANY ENVIRONMENTAL CLAIMS RELATED
TO THE PACIFICORP ACQUIRED ASSETS THAT HAVE NOT BEEN FULLY AND FINALLY RESOLVED
AND, TO IDAHO POWER’S KNOWLEDGE, NO SUCH ENVIRONMENTAL CLAIMS ARE PENDING OR
THREATENED AGAINST IDAHO POWER.

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(IV)             EXCEPT AS SET FORTH ON SCHEDULE 3.1(H)(IV), TO IDAHO POWER’S
KNOWLEDGE THERE ARE AND HAVE BEEN NO UNDERGROUND STORAGE TANKS, AND THERE ARE NO
ASBESTOS-CONTAINING BUILDING MATERIALS OR POLY-CHLORINATED BIPHENYLS OWNED,
LEASED, USED, OPERATED OR MAINTAINED BY IDAHO POWER OR, TO IDAHO POWER’S
KNOWLEDGE, OTHERWISE LOCATED ON ANY OF THE PACIFICORP ACQUIRED ASSETS.

(V)               EXCEPT AS SET FORTH ON SCHEDULE 3.1(H)(V), WITH RESPECT TO THE
PACIFICORP ACQUIRED ASSETS, TO IDAHO POWER’S KNOWLEDGE WITHIN THE LAST FIVE (5)
YEARS AND AT ANY PRIOR TIME, IDAHO POWER HAS NOT ASSUMED OR RETAINED, BY
CONTRACT OR, TO IDAHO POWER’S KNOWLEDGE, BY OPERATION OF LAW, ANY OBLIGATION
UNDER ANY ENVIRONMENTAL LAW OR CONCERNING ANY HAZARDOUS MATERIALS WITH RESPECT
TO THE PACIFICORP ACQUIRED ASSETS.

(VI)             SCHEDULE 3.1(H)(VI) LISTS ALL OF THE MATERIAL ENVIRONMENTAL
REPORTS RELATING TO THE PACIFICORP ACQUIRED ASSETS THAT ARE IN THE POSSESSION OR
REASONABLE CONTROL OF IDAHO POWER, COPIES OF WHICH HAVE BEEN MADE AVAILABLE TO
PACIFICORP.

(I)              [INTENTIONALLY OMITTED.]

(J)              NO BROKER, FINDER, OR OTHER PERSON IS ENTITLED TO ANY BROKERAGE
FEES, COMMISSIONS, OR FINDER’S FEES FOR WHICH PACIFICORP COULD BECOME LIABLE OR
OBLIGATED IN CONNECTION WITH THE CONTEMPLATED TRANSACTIONS BY REASON OF ANY
ACTION TAKEN BY IDAHO POWER OR ITS AFFILIATES.

(K)            EXCEPT AS SET FORTH IN SCHEDULE 3.1(K), IDAHO POWER DOES NOT OWN,
OR DIRECTLY LICENSE FROM A THIRD PARTY, ANY INTELLECTUAL PROPERTY USED IN OR
NECESSARY FOR THE OWNERSHIP, USE AND OPERATION OF THE PACIFICORP ACQUIRED ASSETS
(AS THESE FACILITIES ARE REASONABLY EXPECTED TO BE OPERATED IN ACCORDANCE WITH
THE PROVISIONS OF THE HEMINGWAY JOINT OWNERSHIP AND OPERATING AGREEMENT ON THE
DATE THE FACILITIES ENTER COMMERCIAL OPERATION) IN ACCORDANCE WITH GOOD UTILITY
PRACTICE AND GOVERNMENTAL REQUIREMENTS THAT IS NOT PART OF THE PACIFICORP
ACQUIRED ASSETS.

(L)              MATERIAL CONTRACTS.  SCHEDULE 3.1(L) SETS FORTH A TRUE,
ACCURATE AND COMPLETE LIST OF EACH OF THE MATERIAL CONTRACTS AND OTHER
AGREEMENTS TO WHICH IDAHO POWER OR ANY OF ITS AFFILIATES IS A PARTY AND WHICH
PROVIDES FOR THE DESIGN, ENGINEERING, PROCUREMENT, CONSTRUCTION, INSTALLATION
AND/OR COMMISSIONING OF THE HEMINGWAY SUBSTATION FACILITIES (THE “HEMINGWAY
SUBSTATION FACILITIES CONTRACTS”).  EXCEPT AS SET FORTH ON SCHEDULE 3.1(L), TO
IDAHO POWER’S KNOWLEDGE, EACH OF THE HEMINGWAY SUBSTATION FACILITIES CONTRACTS
IS IN FULL FORCE AND EFFECT, AND IS VALID, BINDING AND ENFORCEABLE IN ACCORDANCE
WITH ITS TERMS.

3.2              REPRESENTATIONS AND WARRANTIES OF PACIFICORP.  AS AN INDUCEMENT
TO IDAHO POWER TO ENTER INTO THIS AGREEMENT AND TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREBY, PACIFICORP REPRESENTS AND WARRANTIES TO IDAHO POWER AS
FOLLOWS:

(A)             IT IS DULY FORMED, VALIDLY EXISTING AND IN GOOD STANDING UNDER
THE LAWS OF THE STATE OF OREGON.

 

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(B)            IT HAS ALL NECESSARY CORPORATE POWER AND AUTHORITY TO EXECUTE AND
DELIVER THIS AGREEMENT AND EACH RELATED DOCUMENT TO WHICH IT WILL BE A PARTY AND
TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT AND EACH SUCH RELATED DOCUMENT,
AND THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND EACH RELATED DOCUMENT TO
WHICH IT WILL BE A PARTY AND THE PERFORMANCE BY IT OF THIS AGREEMENT AND EACH
SUCH RELATED DOCUMENT HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE
ACTION ON ITS PART.

(C)             THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND EACH RELATED
DOCUMENT TO WHICH IT WILL BE PARTY AND THE PERFORMANCE BY IT OF THIS AGREEMENT
AND EACH SUCH RELATED DOCUMENT DO NOT AND WILL NOT: (I) VIOLATE ITS
ORGANIZATIONAL DOCUMENTS; (II) VIOLATE ANY GOVERNMENTAL REQUIREMENTS APPLICABLE
TO IT; OR (III) RESULT IN A BREACH OF OR CONSTITUTE A DEFAULT OF ANY MATERIAL
AGREEMENT TO WHICH IT IS A PARTY.

(D)            THIS AGREEMENT HAS BEEN, AND EACH RELATED DOCUMENT TO WHICH IT
WILL BE A PARTY WILL BE, DULY AND VALIDLY EXECUTED AND DELIVERED BY IT AND,
CONSTITUTES, OR WILL CONSTITUTE UPON EXECUTION, ITS LEGAL, VALID AND BINDING
OBLIGATION ENFORCEABLE AGAINST IT IN ACCORDANCE WITH ITS TERMS, EXCEPT AS THE
SAME MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY OR OTHER SIMILAR LAWS AFFECTING
CREDITORS’ RIGHTS GENERALLY AND BY PRINCIPLES OF EQUITY REGARDLESS OF WHETHER
SUCH PRINCIPLES ARE CONSIDERED IN A PROCEEDING AT LAW OR IN EQUITY.

(E)             SCHEDULE 3.2(E) LISTS ALL MATERIAL GOVERNMENTAL AUTHORIZATIONS
REQUIRED BY GOVERNMENTAL REQUIREMENTS TO HAVE BEEN OBTAINED BY IT AS OF THE DATE
HEREOF IN CONNECTION WITH THE (I) DUE EXECUTION AND DELIVERY OF, AND PERFORMANCE
BY IT OF ITS OBLIGATIONS UNDER, THIS AGREEMENT AND EACH RELATED DOCUMENT TO
WHICH IT IS A PARTY, AND THE CONSUMMATION OF THE CONTEMPLATED TRANSACTIONS AND
(II) THE OWNERSHIP, USE AND OPERATION OF THE HEMINGWAY ACQUIRED ASSETS AND THE
POPULUS ACQUIRED ASSETS AS THOSE FACILITIES ARE REASONABLY EXPECTED TO BE OWNED,
USED AND OPERATED IN ACCORDANCE WITH THE PROVISIONS OF THE HEMINGWAY JOINT
OWNERSHIP AND OPERATING AGREEMENT AND THE POPULUS JOINT OWNERSHIP AND OPERATING
AGREEMENT ON THE DATE SUCH FACILITIES ENTER COMMERCIAL OPERATION (COLLECTIVELY,
THE “PACIFICORP REQUIRED REGULATORY APPROVALS”).  EXCEPT AS DISCLOSED IN
SCHEDULE 3.2(E), EACH OF THE PACIFICORP REQUIRED REGULATORY APPROVALS HAS BEEN
DULY OBTAINED OR MADE AND IS VALID, BINDING AND IN FULL FORCE AND EFFECT.

(F)             EXCEPT AS DISCLOSED IN SCHEDULE 3.2(F), THERE ARE NO MATERIAL
LIABILITIES RELATED TO THE IDAHO POWER ACQUIRED ASSETS, WHETHER OR NOT REQUIRED
BY GAAP TO BE DISCLOSED IN A BALANCE SHEET, OTHER THAN THE LIEN OF THE
PACIFICORP MORTGAGE ON THE IDAHO POWER ACQUIRED ASSETS, WHICH WILL BE RELEASED
AFTER CLOSING IN ACCORDANCE WITH SECTION 2.12(B) HEREOF.  EXCEPT AS SET FORTH ON
SCHEDULE 3.2(F), PACIFICORP DOES NOT HAVE ANY OBLIGATIONS (ABSOLUTE OR
CONTINGENT) RELATED TO THE IDAHO POWER ACQUIRED ASSETS TO PROVIDE FUNDS ON
BEHALF OF, OR TO GUARANTEE ANY DEBT, LIABILITY OR OBLIGATION OF, ANY PERSON.

(g)            Except as set forth on Schedule 3.2(g), (i) PacifiCorp owns good
and marketable title to the Idaho Power Acquired Assets and (ii) PacifiCorp owns
good and marketable title in fee to the Populus Substation Site and there exists
no Encumbrances (other than PacifiCorp Permitted Encumbrances) applicable to the
Populus Substation Site that would restrict the ownership, use or operation of
the Populus Substation (as these facilities are reasonably expected to be
operated in accordance with the provisions of the Populus Joint

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Ownership and Operating Agreement on the date the facilities enter commercial
operation) or the grant of the Populus Easements provided for in the Populus
Easement Agreement.

(H)            ENVIRONMENTAL.

(I)                 SCHEDULE 3.2(H)(I)-A SETS FORTH A LIST OF ALL MATERIAL
ENVIRONMENTAL PERMITS HELD BY PACIFICORP FOR THE OPERATION OF THE IDAHO POWER
ACQUIRED ASSETS.  EXCEPT AS SET FORTH ON SCHEDULE 3.2(H)(I)-B, (1) PACIFICORP
(TO THE EXTENT RELATED TO THE IDAHO POWER ACQUIRED ASSETS) IS IN COMPLIANCE WITH
ALL APPLICABLE ENVIRONMENTAL LAWS, (2) TO PACIFICORP’S KNOWLEDGE, PACIFICORP
POSSESSES ALL ENVIRONMENTAL PERMITS REQUIRED UNDER ENVIRONMENTAL LAWS FOR THE
OPERATION OF THE IDAHO POWER ACQUIRED ASSETS (AS THESE FACILITIES ARE REASONABLY
EXPECTED TO BE OPERATED IN ACCORDANCE WITH THE PROVISIONS OF THE POPULUS JOINT
OWNERSHIP AND OPERATING AGREEMENT ON THE DATE THE FACILITIES ENTER COMMERCIAL
OPERATION) AND IS IN COMPLIANCE WITH SUCH ENVIRONMENTAL PERMITS; AND (3)
PACIFICORP HAS RECEIVED NO WRITTEN NOTICE THAT ANY ENVIRONMENTAL PERMIT REQUIRED
UNDER ENVIRONMENTAL LAWS FOR THE OPERATION OF THE IDAHO POWER ACQUIRED ASSETS IS
SUBJECT TO TERMINATION, MODIFICATION OR REVOCATION.

(II)               EXCEPT AS SET FORTH ON SCHEDULE 3.2(H)(II), TO PACIFICORP’S
KNOWLEDGE NEITHER PACIFICORP NOR ANY AFFILIATE OF PACIFICORP HAS RECEIVED WITHIN
THE LAST FIVE (5) YEARS AND AT ANY PRIOR TIME, ANY WRITTEN NOTICE, REPORT,
REQUEST FOR INFORMATION OR OTHER INFORMATION REGARDING ANY ACTUAL OR ALLEGED
VIOLATION OF ENVIRONMENTAL LAWS OR ANY LIABILITIES OR POTENTIAL LIABILITIES,
INCLUDING ANY INVESTIGATORY, REMEDIAL, OR CORRECTIVE OBLIGATIONS, RELATING TO
THE OPERATION OF THE IDAHO POWER ACQUIRED ASSETS ARISING UNDER OR RELATING TO
ENVIRONMENTAL LAWS OR REGARDING HAZARDOUS MATERIALS.

(III)             EXCEPT AS SET FORTH ON SCHEDULE 3.2(H)(III), (1) TO
PACIFICORP’S KNOWLEDGE, PACIFICORP HAS NOT CAUSED ANY RELEASE, AND THERE IS AND
HAS BEEN NO OTHER RELEASE FROM, IN, ON, BENEATH, OR AFFECTING THE IDAHO POWER
ACQUIRED ASSETS THAT COULD FORM A BASIS FOR AN ENVIRONMENTAL CLAIM, AND (2)
PACIFICORP HAS NOT RECEIVED WRITTEN NOTICE OF ANY ENVIRONMENTAL CLAIMS RELATED
TO THE IDAHO POWER ACQUIRED ASSETS THAT HAVE NOT BEEN FULLY AND FINALLY RESOLVED
AND, TO PACIFICORP’S KNOWLEDGE, NO SUCH ENVIRONMENTAL CLAIMS ARE PENDING OR
THREATENED AGAINST PACIFICORP.

(IV)             EXCEPT AS SET FORTH ON SCHEDULE 3.2(H)(IV), TO PACIFICORP’S
KNOWLEDGE THERE ARE AND HAVE BEEN NO UNDERGROUND STORAGE TANKS, AND THERE ARE NO
ASBESTOS-CONTAINING BUILDING MATERIALS OR POLY-CHLORINATED BIPHENYLS OWNED,
LEASED, USED, OPERATED OR MAINTAINED BY PACIFICORP OR, TO PACIFICORP’S
KNOWLEDGE, OTHERWISE LOCATED ON ANY OF THE IDAHO POWER ACQUIRED ASSETS.

(V)               EXCEPT AS SET FORTH ON SCHEDULE 3.2(H)(V), WITH RESPECT TO THE
IDAHO POWER ACQUIRED ASSETS, TO PACIFICORP’S KNOWLEDGE WITHIN THE LAST FIVE (5)
YEARS AND AT ANY PRIOR TIME, PACIFICORP HAS NOT ASSUMED OR RETAINED, BY CONTRACT
OR, TO PACIFICORP’S KNOWLEDGE, BY OPERATION OF LAW, ANY OBLIGATION UNDER ANY
ENVIRONMENTAL LAW OR CONCERNING ANY HAZARDOUS MATERIALS WITH RESPECT TO THE
IDAHO POWER ACQUIRED ASSETS.

 

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(VI)             SCHEDULE 3.2(H)(VI) LISTS ALL OF THE MATERIAL ENVIRONMENTAL
REPORTS RELATING TO THE IDAHO POWER ACQUIRED ASSETS THAT ARE IN THE POSSESSION
OR REASONABLE CONTROL OF PACIFICORP, COPIES OF WHICH HAVE BEEN MADE AVAILABLE TO
IDAHO POWER.

(I)              [INTENTIONALLY OMITTED.]

(J)              NO BROKER, FINDER, OR OTHER PERSON IS ENTITLED TO ANY BROKERAGE
FEES, COMMISSIONS, OR FINDER’S FEES FOR WHICH IDAHO POWER COULD BECOME LIABLE OR
OBLIGATED IN CONNECTION WITH THE CONTEMPLATED TRANSACTIONS BY REASON OF ANY
ACTION TAKEN BY PACIFICORP OR ITS AFFILIATES.

(K)            EXCEPT AS SET FORTH IN SCHEDULE 3.2(K), PACIFICORP DOES NOT OWN,
OR DIRECTLY LICENSE FROM A THIRD PARTY, ANY INTELLECTUAL PROPERTY USED IN OR
NECESSARY FOR THE OWNERSHIP, USE AND OPERATION OF THE IDAHO POWER ACQUIRED
ASSETS (AS THESE FACILITIES ARE REASONABLY EXPECTED TO BE OPERATED IN ACCORDANCE
WITH THE PROVISIONS OF THE POPULUS JOINT OWNERSHIP AND OPERATING AGREEMENT ON
THE DATE THE FACILITIES ENTER COMMERCIAL OPERATION) IN ACCORDANCE WITH GOOD
UTILITY PRACTICE AND GOVERNMENTAL REQUIREMENTS THAT IS NOT PART OF THE IDAHO
POWER ACQUIRED ASSETS.

(L)              MATERIAL CONTRACTS.  SCHEDULE 3.2(L) SETS FORTH A TRUE,
ACCURATE AND COMPLETE LIST OF EACH OF THE MATERIAL CONTRACTS AND OTHER
AGREEMENTS TO WHICH PACIFICORP OR ANY OF ITS AFFILIATES IS A PARTY AND WHICH
PROVIDES FOR THE DESIGN, ENGINEERING, PROCUREMENT, CONSTRUCTION, INSTALLATION
AND/OR COMMISSIONING OF THE POPULUS SUBSTATION FACILITIES (THE “POPULUS
SUBSTATION FACILITIES CONTRACTS”).  EXCEPT AS SET FORTH ON SCHEDULE 3.1(L), TO
PACIFICORP’S KNOWLEDGE, EACH OF THE POPULUS SUBSTATION FACILITIES CONTRACTS IS
IN FULL FORCE AND EFFECT, AND IS VALID, BINDING AND ENFORCEABLE IN ACCORDANCE
WITH ITS TERMS.

ARTICLE IV
COVENANTS

 

4.1              CONDITIONS AND COMMERCIALLY REASONABLE EFFORTS. SUBJECT TO THE
TERMS AND CONDITIONS OF THIS AGREEMENT, EACH PARTY, AT ITS OWN COST, WILL USE
COMMERCIALLY REASONABLE EFFORTS TO EFFECTUATE THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT AND TO FULFILL ALL OF THE CONDITIONS TO ITS OBLIGATIONS UNDER
THIS AGREEMENT AND WILL DO ALL SUCH ACTS AND THINGS AS REASONABLY MAY BE
REQUIRED TO CARRY OUT ITS OBLIGATIONS HEREUNDER AND TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT ON OR BEFORE MAY 5, 2010, INCLUDING
MAKING OR COOPERATING WITH THE OTHER PARTY IN THE MAKING OF APPLICATIONS FOR
REQUIRED REGULATORY APPROVALS.  NOTWITHSTANDING THE FOREGOING, NEITHER PARTY
WILL BE REQUIRED IN CONNECTION WITH ANY REQUIRED REGULATORY APPROVALS TO AGREE
TO ANY PAYMENT OR ANY CONDITION OF APPROVAL IMPOSED BY A GOVERNMENTAL ENTITY
THAT IS NOT REASONABLY ACCEPTABLE TO IT.

4.2              Filings with Governmental Entities.  Except for (a) the Idaho
Power Required Regulatory Approvals initiated by Idaho Power prior to the
Effective Date and listed in Schedule 4.2(a) and the (b) the PacifiCorp Required
Regulatory Approvals initiated by PacifiCorp prior to the Effective Date and
listed in Schedule 4.2(b), prior to Closing, each Party will provide prior
written notice to the other Party before making any filing with, or initiating
any discussion or

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proceeding with, any Governmental Entity in the course of obtaining any Required
Regulatory Approvals from such Governmental Entities.  Prior to filing
applications, pre-filed testimony or responses to data requests to any
Governmental Entity in the course of obtaining any Required Regulatory Approvals
from such Governmental Entities after the Effective Date, each Party will
provide such materials to the other Party for its information.

4.3              COMPLIANCE.  EACH PARTY SHALL COMPLY WITH ALL GOVERNMENTAL
REQUIREMENTS AND GOVERNMENTAL AUTHORIZATIONS APPLICABLE TO IT IN CONNECTION WITH
THE CONTEMPLATED TRANSACTION, EXCEPT WHERE NON-COMPLIANCE WILL NOT HAVE A
MATERIAL ADVERSE EFFECT ON THE OTHER PARTY OR ANY OF ITS AFFILIATES.

4.4              RISK OF LOSS.

(A)             HEMINGWAY SUBSTATION FACILITIES.  IDAHO POWER WILL BEAR THE RISK
OF LOSS OR DAMAGE TO THE HEMINGWAY SUBSTATION FACILITIES PRIOR TO THE EFFECTIVE
TIME OF CLOSING.  FROM AND AFTER THE EFFECTIVE TIME OF CLOSING, THE PARTIES WILL
SHARE IN ALL LOSSES RELATING TO THE HEMINGWAY SUBSTATION FACILITIES IN
ACCORDANCE WITH THE HEMINGWAY JOINT OWNERSHIP AND OPERATING AGREEMENT.

(B)            POPULUS SUBSTATION FACILITIES.  PACIFICORP WILL BEAR THE RISK OF
LOSS OR DAMAGE TO THE POPULUS SUBSTATION FACILITIES PRIOR TO THE EFFECTIVE TIME
OF CLOSING.  FROM AND AFTER THE EFFECTIVE TIME OF CLOSING, THE PARTIES WILL
SHARE IN ALL LOSSES RELATING TO THE POPULUS SUBSTATION FACILITIES IN ACCORDANCE
WITH THE POPULUS JOINT OWNERSHIP AND OPERATING AGREEMENT.

4.5              MAINTENANCE OF SUBSTATION FACILITIES.

(A)             HEMINGWAY SUBSTATION FACILITIES.  PRIOR TO THE EFFECTIVE TIME OF
CLOSING, IDAHO POWER, AT ITS OWN COST AND EXPENSE, WILL OPERATE AND MAINTAIN THE
HEMINGWAY SUBSTATION FACILITIES, CONSISTENT WITH PAST PRACTICES AND IN
ACCORDANCE WITH GOOD UTILITY PRACTICE, GOVERNMENTAL REQUIREMENTS AND
GOVERNMENTAL AUTHORIZATIONS.  FROM AND AFTER THE EFFECTIVE DATE OF CLOSING, THE
HEMINGWAY SUBSTATION FACILITIES SHALL BE OPERATED AND MAINTAINED IN ACCORDANCE
WITH THE HEMINGWAY JOINT OWNERSHIP AND OPERATING AGREEMENT.

(B)            POPULUS SUBSTATION FACILITIES.  PRIOR TO THE EFFECTIVE TIME OF
CLOSING, PACIFICORP, AT ITS OWN COST AND EXPENSE, WILL OPERATE AND MAINTAIN THE
POPULUS SUBSTATION FACILITIES, CONSISTENT WITH PAST PRACTICES AND IN ACCORDANCE
WITH GOOD UTILITY PRACTICE, GOVERNMENTAL REQUIREMENTS AND GOVERNMENTAL
AUTHORIZATIONS.  FROM AND AFTER THE EFFECTIVE TIME OF CLOSING, THE POPULUS
SUBSTATION FACILITIES SHALL BE OPERATED AND MAINTAINED IN ACCORDANCE WITH THE
POPULUS JOINT OWNERSHIP AND OPERATING AGREEMENT.

4.6              Notice.  Each Party may notify the other Party in writing of
any fact, circumstance or development known to it prior to Closing which at the
time of notification causes any of its representations or warranties in this
Agreement to be materially inaccurate.  Unless the other Party terminates this
Agreement pursuant to Section 5.1, the written notice pursuant to this Section
4.6 will be deemed to have qualified the representations or warranties, to have
amended any Schedule referenced in such Section, and to have caused any breach
of representation or

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warranty that otherwise might have existed hereunder by reason of the fact,
circumstance or development to be cured.  Upon request of the other Party, the
Party providing notice of a material inaccuracy of any of its representations
and warranties shall, if possible, provide reasonable assurances to the other
Party, in writing, that it will be able to perform its obligations under this
Agreement.

4.7              DISCLOSURE.  DISCLOSURE BY A PARTY OF ANY FACT OR ITEM IN ANY
SCHEDULE OR EXHIBIT HERETO SHALL BE DEEMED TO HAVE BEEN SO DISCLOSED IN ANY
OTHER SCHEDULE, EXHIBIT OR REPRESENTATION OR WARRANTY MADE BY SUCH PARTY HEREIN,
PROVIDED DISCLOSURE OF SUCH FACT OR ITEM ON SUCH SCHEDULE OR EXHIBIT CONTAINS
DISCLOSURE OF FACTS THAT WOULD OTHERWISE BE REQUIRED TO BE DISCLOSED IN SUCH
OTHER SCHEDULE, EXHIBIT OR REPRESENTATION OR WARRANTY.

 

ARTICLE V
TERMINATION

 

5.1              TERMINATION.  EXCEPT AS TO THOSE PROVISIONS THAT ARE EXPRESSLY
INTENDED TO SURVIVE TERMINATION, THIS AGREEMENT MAY BE TERMINATED AT ANY TIME
PRIOR TO THE CLOSING:

(A)             BY THE PARTIES, IF THE PARTIES MUTUALLY AGREE IN WRITING TO
TERMINATE THIS AGREEMENT;

(B)            BY IDAHO POWER, IF IDAHO POWER DELIVERS A WRITTEN NOTICE TO
PACIFICORP THAT IT IS TERMINATING THIS AGREEMENT (INCLUDING THE DATE OF
TERMINATION OF THIS AGREEMENT, WHICH SHALL NOT BE EARLIER THAN ANY APPLICABLE
CURE PERIOD PROVIDED FOR BELOW) BECAUSE:

(I)                 ONE OR MORE OF THE CONDITIONS SET FORTH IN SECTION 2.11(A)
(TO BE SPECIFIED IN DETAIL IN SUCH NOTICE) CANNOT BE MET ON OR BEFORE THE
OUTSIDE CLOSING DATE, AND SUCH CONDITION OR CONDITIONS HAVE NOT BEEN SATISFIED
(OR WAIVED BY IDAHO POWER) WITHIN THIRTY (30) DAYS AFTER THE DATE SUCH NOTICE IS
DELIVERED BY IDAHO POWER TO PACIFICORP, PROVIDED THAT SUCH CONDITION OR
CONDITIONS HAVE NOT BEEN SATISFIED AS A RESULT OF IDAHO POWER’S DEFAULT
HEREUNDER; OR

(II)               PACIFICORP HAS BREACHED IN A MATERIAL RESPECT ONE OR MORE OF
ITS COVENANTS OR AGREEMENTS CONTAINED IN ARTICLE IV OR ONE OR MORE OF ITS
REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE III (TO BE SPECIFIED IN
DETAIL IN SUCH NOTICE), AND SUCH BREACH HAS NOT BEEN REMEDIED (OR WAIVED BY
IDAHO POWER) WITHIN THIRTY (30) DAYS AFTER THE DATE SUCH NOTICE IS DELIVERED BY
IDAHO POWER TO PACIFICORP, PROVIDED THAT SUCH BREACH HAS NOT OCCURRED AS A
RESULT OF IDAHO POWER’S DEFAULT HEREUNDER; OR

(III)             PACIFICORP NOTIFIES IDAHO POWER PURSUANT TO SECTION 4.6 OF A
MATERIAL INACCURACY, AND IDAHO POWER DELIVERS ITS TERMINATION NOTICE WITHIN TEN
(10) DAYS OF RECEIPT OF PACIFICORP’S NOTICE;

(C)             BY PACIFICORP, IF PACIFICORP DELIVERS A WRITTEN NOTICE TO IDAHO
POWER THAT IT IS TERMINATING THIS AGREEMENT (INCLUDING THE DATE OF TERMINATION
OF THIS AGREEMENT, WHICH SHALL NOT BE EARLIER THAN ANY APPLICABLE CURE PERIOD
PROVIDED FOR BELOW) BECAUSE:

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(I)                 ONE OR MORE OF THE CONDITIONS SET FORTH IN SECTION 2.11(B)
(TO BE SPECIFIED IN DETAIL IN SUCH NOTICE) CANNOT BE MET ON OR BEFORE THE
OUTSIDE CLOSING DATE, AND SUCH CONDITION OR CONDITIONS HAVE NOT BEEN SATISFIED
(OR WAIVED BY PACIFICORP) WITHIN THIRTY (30) DAYS AFTER THE DATE SUCH NOTICE IS
DELIVERED BY PACIFICORP TO IDAHO POWER, PROVIDED THAT SUCH CONDITION OR
CONDITIONS HAVE NOT BEEN SATISFIED AS A RESULT OF PACIFICORP’S DEFAULT
HEREUNDER; OR

(II)               IDAHO POWER HAS BEACHED IN A MATERIAL RESPECT ONE OR MORE OF
ITS COVENANTS OR AGREEMENTS CONTAINED IN ARTICLE IV OR ONE OR MORE OF ITS
REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE III (TO BE SPECIFIED IN
DETAIL IN SUCH NOTICE), AND SUCH BREACH HAS NOT BEEN REMEDIED (OR WAIVED BY
PACIFICORP) WITHIN THIRTY (30) DAYS AFTER THE DATE SUCH NOTICE IS DELIVERED BY
PACIFICORP TO IDAHO POWER, PROVIDED THAT SUCH BREACH HAS NOT OCCURRED AS A
RESULT OF PACIFICORP’S DEFAULT HEREUNDER; OR

(III)             IDAHO POWER NOTIFIES PACIFICORP PURSUANT TO SECTION 4.6 OF A
MATERIAL INACCURACY, AND PACIFICORP DELIVERS ITS TERMINATION NOTICE WITHIN TEN
(10) DAYS OF RECEIPT OF IDAHO POWER’S NOTICE;

(D)            BY EITHER PARTY, IF SUCH PARTY DELIVERS A WRITTEN NOTICE TO THE
OTHER PARTY THAT IT IS TERMINATING THIS AGREEMENT (INCLUDING THE DATE OF
TERMINATION OF THIS AGREEMENT, WHICH SHALL NOT BE EARLIER THAN THE DATE THE
CONDITION BELOW HAS BEEN SATISFIED) BECAUSE A COURT OF COMPETENT JURISDICTION IN
THE UNITED STATES OR ANY STATE HAS ISSUED AN ORDER, JUDGMENT OR DECREE (OTHER
THAN A TEMPORARY RESTRAINING ORDER) RESTRAINING, ENJOINING OR OTHERWISE
PROHIBITING THE CONTEMPLATED TRANSACTION AND SUCH ORDER, JUDGMENT OR DECREE HAS
BECOME FINAL AND NONAPPEALABLE; OR

(E)             BY EITHER PARTY, IF SUCH PARTY DELIVERS A WRITTEN NOTICE TO THE
OTHER PARTY THAT IT IS TERMINATING THIS AGREEMENT (INCLUDING THE DATE OF
TERMINATION OF THIS AGREEMENT, WHICH SHALL NOT BE EARLIER THAN THE OUTSIDE
CLOSING DATE) BECAUSE THE CLOSING HAS NOT OCCURRED ON OR BEFORE THE OUTSIDE
CLOSING DATE, PROVIDED THAT THE CLOSING HAS NOT OCCURRED AS A RESULT OF A
DEFAULT BY THE PARTY TERMINATING THIS AGREEMENT.

5.2              EFFECT OF EARLY TERMINATION.  IN THE EVENT THIS AGREEMENT IS
TERMINATED BY EITHER OR BOTH OF THE PARTIES PRIOR TO CLOSING PURSUANT TO SECTION
5.1, THIS AGREEMENT WILL TERMINATE AND BECOME WHOLLY VOID AND OF NO FURTHER
FORCE AND EFFECT, WITHOUT FURTHER ACTION BY EITHER PARTY, WHEREUPON THE
LIABILITIES OF THE PARTIES HEREUNDER WILL TERMINATE, AND EACH PARTY AND ITS
AFFILIATES AND REPRESENTATIVE SHALL BE FULLY RELEASED AND DISCHARGED FROM ANY
LIABILITY OR OBLIGATION UNDER OR RESULTING FROM THIS AGREEMENT, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT.  IF A PARTY TERMINATES THIS
AGREEMENT PRIOR TO CLOSING PURSUANT TO SECTION 5.1, SUCH TERMINATION WILL BE THE
SOLE REMEDY OF SUCH PARTY WITH RESPECT TO BREACHES OF ANY REPRESENTATION,
WARRANTY, COVENANT OR AGREEMENT CONTAINED IN THIS AGREEMENT PRIOR TO CLOSING,
AND NEITHER PARTY SHALL HAVE ANY OTHER REMEDY OR CAUSE OF ACTION UNDER OR
RELATING TO THIS AGREEMENT.

ARTICLE VI
INDEMNIFICATION

6.1              SURVIVAL OF REPRESENTATIONS AND WARRANTIES:  NOTICES OF
CLAIMS.  THE REPRESENTATIONS AND WARRANTIES OF THE PARTIES CONTAINED IN THIS
AGREEMENT WILL SURVIVE THE

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Closing and will expire on the first anniversary of the Closing Date, except
that (i) the representations and warranties in Sections 3.1(g), 3.1(h), 3.1(j),
3.2(g), 3.2(h) and 3.2(j) will survive the Closing and will expire upon the
second anniversary of the Closing Date; provided that, any representation or
warranty (and the indemnification obligations of the Parties with respect
thereto) that would otherwise terminate in accordance with this Section 6.1 will
continue to survive if notice for indemnification shall have been timely given
under this Article VI on or prior to such termination date, until the related
claim for indemnification has been satisfied or otherwise resolved as provided
in this Article VI.

6.2              INDEMNIFICATION.

(A)             IDAHO POWER.  ON THE TERMS AND SUBJECT TO THE CONDITIONS SET
FORTH IN THIS AGREEMENT, FROM AND AFTER THE CLOSING, IDAHO POWER HEREBY AGREES
TO INDEMNIFY, DEFEND AND HOLD HARMLESS PACIFICORP AND ITS AFFILIATES AND
REPRESENTATIVES FROM AND AGAINST, AND SHALL REIMBURSE PACIFICORP WITH RESPECT
TO, ALL LOSSES, WHETHER OR NOT INVOLVING A THIRD-PARTY CLAIM, RESULTING FROM OR
ARISING OUT OF OR IN CONNECTION WITH:

(I)                 THE BREACH IN ANY MATERIAL RESPECT OF ANY REPRESENTATION OR
WARRANTY MADE BY IDAHO POWER IN THIS AGREEMENT;

(II)               THE BREACH IN ANY MATERIAL RESPECT BY IDAHO POWER OF ANY
COVENANT OR AGREEMENT CONTAINED IN THIS AGREEMENT TO BE PERFORMED BY IDAHO
POWER;

(III)             THE IDAHO POWER EXCLUDED LIABILITIES; OR

(IV)             ALL ENVIRONMENTAL CLAIMS AND REQUIREMENTS OF ENVIRONMENTAL LAW 
WITH REGARD TO ENVIRONMENTAL MATTERS EXISTING AT THE HEMINGWAY SUBSTATION AS OF
THE EFFECTIVE TIME.

(B)            PACIFICORP.  ON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH
IN THIS AGREEMENT, FROM AND AFTER THE CLOSING, PACIFICORP HEREBY AGREES TO
INDEMNIFY, DEFEND AND HOLD HARMLESS IDAHO POWER AND ITS AFFILIATES AND
REPRESENTATIVES FROM AND AGAINST, AND SHALL REIMBURSE IDAHO POWER WITH RESPECT
TO, ALL LOSSES, WHETHER OR NOT INVOLVING A THIRD-PARTY CLAIM, RESULTING FROM OR
ARISING OUT OF OR IN CONNECTION WITH:

(I)                 THE BREACH IN ANY MATERIAL RESPECT OF ANY REPRESENTATION OR
WARRANTY MADE BY PACIFICORP IN THIS AGREEMENT;

(II)               THE BREACH IN ANY MATERIAL RESPECT BY PACIFICORP OF ANY
COVENANT OR AGREEMENT CONTAINED IN THIS AGREEMENT TO BE PERFORMED BY PACIFICORP;

(III)             THE PACIFICORP EXCLUDED LIABILITIES; OR

(IV)             ALL ENVIRONMENTAL CLAIMS AND REQUIREMENTS OF ENVIRONMENTAL LAW 
WITH REGARD TO ENVIRONMENTAL MATTERS EXISTING AT THE POPULUS SUBSTATION AS OF
THE EFFECTIVE TIME.

 

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6.3              LIMITATIONS ON INDEMNIFICATION.

(A)             A PARTY MAY ASSERT A CLAIM FOR INDEMNIFICATION PURSUANT TO THIS
ARTICLE VI ONLY TO THE EXTENT THE INDEMNIFIED PARTY GIVES A NOTICE TO THE
INDEMNIFYING PARTY SPECIFYING THE FACTUAL BASIS OF SUCH CLAIM IN REASONABLE
DETAIL TO THE EXTENT KNOWN TO THE NOTIFYING PARTY (I) FOR CLAIMS PURSUANT TO
SECTION 6.2(A)(I) OR SECTION 6.2(B)(I), PRIOR TO THE EXPIRATION OF THE
APPLICABLE TIME PERIOD SET FORTH IN SECTION 6.1; (II) FOR CLAIMS PURSUANT TO
SECTION 6.2(A)(II), SECTION 6.2(A)(III), SECTION 6.2(B)(II) OR SECTION
6.2(B)(III), BY THE FIRST ANNIVERSARY OF THE CLOSING DATE; AND (III) FOR CLAIMS
PURSUANT TO SECTION 6.2(A)(IV) OR SECTION 6.2(B)(IV) BY THE EXPIRATION OF THE
SECOND ANNIVERSARY OF THE CLOSING.  IF ANY CLAIM FOR INDEMNIFICATION IS NOT MADE
IN ACCORDANCE WITH SECTION 6.5 AND THE FOREGOING SENTENCE BY A PARTY ON OR PRIOR
TO THE APPLICABLE DATE SET FORTH IN SECTION 6.1 OR THIS SECTION 6.3(A), THE
OTHER PARTY’S INDEMNIFICATION OBLIGATIONS WITH RESPECT THERETO WILL BE
IRREVOCABLY AND UNCONDITIONALLY RELEASED AND WAIVED.

(B)            NOTWITHSTANDING ANY PROVISION TO THE CONTRARY CONTAINED IN THIS
AGREEMENT, NEITHER PARTY SHALL HAVE LIABILITY TO THE OTHER PARTY PURSUANT TO
SECTION 6.2 UNLESS AND UNTIL THE AMOUNT OF SUCH LOSSES, INDIVIDUALLY OR IN THE
AGGREGATE, EXCEED TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000) AND THEN, ONLY
FOR THE LOSSES ABOVE THAT AMOUNT.

(C)             NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT, THE MAXIMUM AMOUNT OF THE INDEMNIFICATION OBLIGATION OF IDAHO POWER
UNDER SECTION 6.2(A) TO PACIFICORP AND ITS AFFILIATES AND REPRESENTATIVES SHALL
NOT EXCEED AN AMOUNT EQUAL TO THE PACIFICORP PURCHASE PRICE.  NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, THE MAXIMUM AMOUNT OF THE
INDEMNIFICATION OBLIGATION OF PACIFICORP UNDER SECTION 6.2(B) TO IDAHO POWER AND
ITS AFFILIATES AND REPRESENTATIVES SHALL NOT EXCEED AN AMOUNT EQUAL TO THE IDAHO
POWER PURCHASE PRICE.

(D)            THE PARTIES ACKNOWLEDGE AND AGREE THAT IF ANY PARTY HAS KNOWLEDGE
OF A MATERIAL FAILURE OF ANY CONDITION SET FORTH IN SECTION 2.11 OR OF A
MATERIAL BREACH BY THE OTHER PARTY OF ANY REPRESENTATION OR WARRANTY OR COVENANT
OR AGREEMENT CONTAINED IN THIS AGREEMENT, THROUGH DISCLOSURE BY THE OTHER PARTY
PURSUANT TO SECTION 4.6 OR BECAUSE ANY PARTY IS OTHERWISE AWARE, TO IDAHO
POWER’S KNOWLEDGE OR TO PACIFICORP’S KNOWLEDGE, RESPECTIVELY, OF ANY SUCH
MATERIAL FAILURE OR MATERIAL BREACH BY THE OTHER PARTY, AND SUCH PARTY PROCEEDS
WITH THE CLOSING, SUCH PARTY SHALL BE DEEMED TO HAVE WAIVED SUCH CONDITION OR
BREACH (BUT THEN ONLY TO THE EXTENT OF SUCH PARTY’S KNOWLEDGE AT CLOSING) AND
SUCH PARTY AND ITS SUCCESSORS, ASSIGNS AND AFFILIATES AND REPRESENTATIVES SHALL
NOT BE ENTITLED TO BE INDEMNIFIED PURSUANT TO THIS ARTICLE VI, TO SUE FOR
DAMAGES OR TO ASSERT ANY OTHER RIGHT OR REMEDY FOR ANY LOSSES REASONABLY
RELATING TO SUCH CONDITION OR BREACH AND SUCH PARTY’S KNOWLEDGE THEREOF AT
CLOSING, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN ANY
RELATED DOCUMENT.

(E)             NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE
CONTRARY, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
AGREEMENT, NEITHER PARTY NOR ITS AFFILIATES, REPRESENTATIVES OR ANY OTHER PERSON
IS MAKING ANY OTHER EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT
TO THE PACIFICORP ACQUIRED ASSETS, THE IDAHO POWER ACQUIRED ASSETS, THE
PACIFICORP ASSUMED OBLIGATIONS, THE IDAHO POWER ASSUMED OBLIGATIONS OR THE
CONTEMPLATED TRANSACTIONS AND EACH PARTY DISCLAIMS AND NEGATES, AND EXPRESSLY
WAIVES,

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ANY OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS (WHETHER MADE BY THE OTHER
PARTY OR ITS AFFILIATES OR REPRESENTATIVES) OR IMPLIED, AT COMMON LAW, BY
STATUTE OR OTHERWISE RELATING TO THE PACIFICORP ACQUIRED ASSETS, THE IDAHO POWER
ACQUIRED ASSETS, THE PACIFICORP ASSUMED OBLIGATIONS, THE IDAHO POWER ASSUMED
OBLIGATIONS OR THE CONTEMPLATED TRANSACTIONS, INCLUDING THE IMPLIED WARRANTY OF
MERCHANTABILITY AND ANY IMPLIED WARRANTY OF FITNESS.  ANY CLAIMS A PARTY MAY
HAVE PURSUANT TO SECTIONS 6.2(A)(I) AND 6.2(B)(I) FOR BREACH OF REPRESENTATION
OR WARRANTY MUST BE BASED SOLELY ON THE REPRESENTATIONS AND WARRANTIES OF THE
OTHER PARTY SET FORTH IN THIS AGREEMENT.  IN FURTHERANCE OF THE FOREGOING,
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, EACH
PARTY ACKNOWLEDGES AND AGREES THAT NEITHER THE OTHER PARTY NOR ANY OF ITS
AFFILIATES OR REPRESENTATIVES WILL HAVE OR BE SUBJECT TO ANY LIABILITY TO IT OR
ANY OF ITS AFFILIATES OR REPRESENTATIVES FOR, AND EACH PARTY HEREBY DISCLAIMS
ALL LIABILITY AND RESPONSIBILITY FOR, ANY REPRESENTATION, WARRANTY, PROJECTION,
FORECAST, STATEMENT, OR INFORMATION MADE, COMMUNICATED, OR FURNISHED (ORALLY OR
IN WRITING) TO THE OTHER PARTY OR ANY OF THE OTHER PARTY’S AFFILIATES OR
REPRESENTATIVES.  EACH PARTY HEREBY ACKNOWLEDGES THAT, EXCEPT FOR THE WARRANTIES
EXPRESSLY SET FORTH IN ARTICLE III, THE PACIFICORP ACQUIRED ASSETS AND IDAHO
POWER ACQUIRED ASSETS ARE BEING PURCHASED ON AN “AS IS, WHERE IS” BASIS.

(f)        Notwithstanding anything in this Section 6.3 to the contrary, except
as otherwise may be ordered by a court of competent jurisdiction, the
Indemnified Party shall bear its own costs, including counsel fees and expenses,
incurred in connection with Claims against the Indemnifying Party hereunder that
are not based upon Claims asserted by third parties.

6.4              EXCLUSIVE REMEDIES.  IDAHO POWER AND PACIFICORP ACKNOWLEDGE AND
AGREE THAT, FROM AND AFTER THE CLOSING, THE SOLE AND EXCLUSIVE REMEDY FOR ANY
BREACH OR INACCURACY, OR ALLEGED BREACH OR INACCURACY, OF ANY REPRESENTATION OR
WARRANTY IN THIS AGREEMENT OR ANY COVENANT OR AGREEMENT TO BE PERFORMED
HEREUNDER ON OR PRIOR TO THE CLOSING DATE OR IN RESPECT OF THE OTHER
CIRCUMSTANCES IDENTIFIED IN SECTION 6.2(A)(III), 6.2(A)(IV), 6.2(B)(III) AND
6.2(B)(IV), WILL BE INDEMNIFICATION IN ACCORDANCE WITH THIS ARTICLE VI.  IN
FURTHERANCE OF THE FOREGOING, EXCEPT TO THE EXTENT PROVIDED UNDER THIS ARTICLE
VI, IDAHO POWER AND PACIFICORP HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE GOVERNMENTAL REQUIREMENTS, ANY AND ALL OTHER RIGHTS, CLAIMS, AND
CAUSES OF ACTION (INCLUDING RIGHTS OF CONTRIBUTIONS, IF ANY) AGAINST THE OTHER
PARTY THAT MAY BE BASED UPON, ARISE OUT OF, OR RELATE TO THIS AGREEMENT, OR THE
NEGOTIATION, EXECUTION, OR PERFORMANCE OF THIS AGREEMENT (INCLUDING ANY TORT OR
BREACH OF CONTRACT CLAIM OR CAUSE OF ACTION BASED UPON, ARISING OUT OF, OR
RELATED TO ANY REPRESENTATION OR WARRANTY MADE IN OR IN CONNECTION WITH THIS
AGREEMENT OR AS AN INDUCEMENT TO ENTER INTO THIS AGREEMENT), KNOWN OR UNKNOWN,
FORESEEN OR UNFORESEEN, WHICH EXIST OR MAY ARISE IN THE FUTURE, THAT IT MAY HAVE
AGAINST THE OTHER ARISING UNDER OR BASED UPON ANY GOVERNMENTAL REQUIREMENT
(INCLUDING ANY SUCH GOVERNMENTAL REQUIREMENT UNDER OR RELATING TO ENVIRONMENTAL
MATTERS), COMMON LAW, OR OTHERWISE.

6.5              NOTICE AND PARTICIPATION.

(A)             IF A PARTY (AN “INDEMNIFIED PARTY”) INTENDS TO SEEK
INDEMNIFICATION UNDER THIS ARTICLE VI WITH RESPECT TO ANY CLAIMS FOR LOSSES, IT
SHALL GIVE THE OTHER PARTY (THE “INDEMNIFYING PARTY”) PROMPT WRITTEN NOTICE OF
SUCH CLAIMS UPON THE RECEIPT OF ACTUAL KNOWLEDGE OR INFORMATION BY THE
INDEMNIFIED PARTY OF ANY POSSIBLE CLAIMS OR OF THE

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COMMENCEMENT OF SUCH CLAIMS.  THE INDEMNIFYING PARTY SHALL HAVE NO LIABILITY
UNDER THIS ARTICLE VI FOR ANY CLAIM FOR WHICH SUCH NOTICE IS NOT PROVIDED, BUT
ONLY TO THE EXTENT THAT THE FAILURE TO GIVE SUCH NOTICE MATERIALLY IMPAIRS THE
ABILITY OF THE INDEMNIFYING PARTY TO RESPOND TO OR TO DEFEND THE CLAIM.

(B)            THE INDEMNIFYING PARTY SHALL HAVE THE RIGHT TO ASSUME THE DEFENSE
OF ANY CLAIM, AT ITS SOLE COST AND EXPENSE, WITH COUNSEL DESIGNATED BY THE
INDEMNIFYING PARTY AND REASONABLY SATISFACTORY TO THE INDEMNIFIED PARTY;
PROVIDED, HOWEVER, THAT IF THE DEFENDANTS IN ANY SUCH PROCEEDING INCLUDE BOTH
THE INDEMNIFYING PARTY AND THE INDEMNIFIED PARTY, AND THE INDEMNIFIED PARTY
SHALL HAVE REASONABLY CONCLUDED THAT THERE MAY BE LEGAL DEFENSES AVAILABLE TO IT
WHICH ARE IN CONFLICT WITH THOSE AVAILABLE TO THE INDEMNIFYING PARTY AND THAT
SUCH CONFLICT MATERIALLY PREJUDICES THE ABILITY OF THE COUNSEL SELECTED BY THE
INDEMNIFYING PARTY TO REPRESENT BOTH PARTIES, THE INDEMNIFIED PARTY SHALL HAVE
THE RIGHT TO SELECT SEPARATE COUNSEL REASONABLY SATISFACTORY TO THE INDEMNIFYING
PARTY, AT THE INDEMNIFYING PARTY’S EXPENSE, TO ASSERT SUCH LEGAL DEFENSES AND TO
OTHERWISE PARTICIPATE IN THE DEFENSE OF SUCH CLAIM ON BEHALF OF THE INDEMNIFIED
PARTY, AND THE INDEMNIFYING PARTY SHALL BE RESPONSIBLE FOR THE REASONABLE FEES
AND EXPENSES OF SUCH SEPARATE COUNSEL.

(C)             SHOULD THE INDEMNIFIED PARTY BE ENTITLED TO INDEMNIFICATION
UNDER THIS ARTICLE VI AS A RESULT OF A CLAIM BY A THIRD PARTY, AND SHOULD THE
INDEMNIFYING PARTY FAIL TO ASSUME THE DEFENSE OF SUCH CLAIM WITHIN A REASONABLE
PERIOD OF TIME AFTER THE INDEMNIFYING PARTY HAS PROVIDED THE INDEMNIFYING PARTY
WRITTEN NOTICE OF SUCH CLAIM, THE INDEMNIFIED PARTY MAY, AT THE EXPENSE OF THE
INDEMNIFYING PARTY, CONTEST OR (WITH OR WITHOUT THE PRIOR CONSENT OF THE
INDEMNIFYING PARTY) SETTLE SUCH CLAIM.

(D)            EXCEPT TO THE EXTENT EXPRESSLY PROVIDED HEREIN, THE INDEMNIFIED
PARTY SHALL NOT SETTLE ANY CLAIM WITH RESPECT TO WHICH IT HAS SOUGHT OR IS
ENTITLED TO SEEK INDEMNIFICATION PURSUANT TO THIS ARTICLE VI UNLESS (I) IT HAS
OBTAINED THE PRIOR WRITTEN CONSENT OF THE INDEMNIFYING PARTY, OR (II) THE
INDEMNIFYING PARTY HAS FAILED TO ASSUME THE DEFENSE OF SUCH CLAIM WITHIN A
REASONABLE PERIOD OF TIME AFTER THE INDEMNIFIED PARTY HAS PROVIDED THE
INDEMNIFYING PARTY WRITTEN NOTICE OF SUCH CLAIM.

(E)             EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE HEREIN, THE
INDEMNIFYING PARTY SHALL NOT SETTLE ANY CLAIM WITH RESPECT TO WHICH IT MAY BE
LIABLE TO PROVIDE INDEMNIFICATION PURSUANT TO THIS SECTION 6.5 WITHOUT THE PRIOR
WRITTEN CONSENT OF THE INDEMNIFIED PARTY; PROVIDED, HOWEVER, THAT IF THE
INDEMNIFYING PARTY HAS REACHED A BONA FIDE SETTLEMENT AGREEMENT WITH THE
PLAINTIFF(S) IN ANY SUCH PROCEEDING, WHICH SETTLEMENT INCLUDES A FULL RELEASE OF
THE INDEMNIFIED PARTY FOR ANY AND ALL LIABILITY WITH RESPECT TO SUCH CLAIM, AND
THE INDEMNIFIED PARTY DOES NOT CONSENT TO SUCH SETTLEMENT AGREEMENT, THEN THE
DOLLAR AMOUNT SPECIFIED IN THE SETTLEMENT AGREEMENT, PLUS THE INDEMNIFIED
PARTY’S REASONABLE LEGAL FEES AND OTHER COSTS RELATED TO THE DEFENSE OF THE
CLAIM PAID OR INCURRED PRIOR TO THE DATE OF SUCH SETTLEMENT AGREEMENT, SHALL ACT
AS AN ABSOLUTE MAXIMUM LIMIT ON THE INDEMNIFICATION OBLIGATION OF THE
INDEMNIFYING PARTY WITH RESPECT TO THE CLAIM, OR PORTION THEREOF, THAT IS THE
SUBJECT OF SUCH SETTLEMENT AGREEMENT.

6.6              Net Amount.  Subject to the limitations imposed by Section
6.5(e), if applicable, in the event that one Party is obligated to indemnify and
hold the other Party harmless under this

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Article VI, the amount owing to the other Party shall be the amount of the other
Party’s actual Claims, net of any insurance or other recovery actually received
by such Party.

6.7              NO SET-OFF.  NEITHER PARTY SHALL HAVE ANY RIGHT TO SET-OFF ANY
INDEMNIFICATION OBLIGATIONS THAT EITHER MAY HAVE UNDER THIS ARTICLE VI AGAINST
ANY OTHER OBLIGATIONS OR AMOUNTS DUE TO THE OTHER PARTY, INCLUDING UNDER ANY
OTHER PROVISIONS OF THIS AGREEMENT OR UNDER ANY OTHER RELATED DOCUMENT.

6.8              NO RELEASE OF INSURERS.  THE PROVISIONS OF THIS ARTICLE VI
SHALL NOT BE DEEMED OR CONSTRUED TO RELEASE ANY INSURER FROM ITS OBLIGATION TO
PAY ANY INSURANCE PROCEEDS IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF VALID
AND COLLECTIBLE INSURANCE POLICIES.

6.9              MITIGATION.  EACH PARTY SHALL TAKE COMMERCIALLY REASONABLE
EFFORTS TO MITIGATE ALL CLAIMS AFTER BECOMING AWARE OF ANY EVENT WHICH COULD
REASONABLY BE EXPECTED TO GIVE RISE TO ANY CLAIMS THAT ARE INDEMNIFIABLE OR
RECOVERABLE HEREUNDER OR IN CONNECTION HEREWITH.

6.10          SURVIVAL OF OBLIGATION.  THE DUTY TO INDEMNIFY UNDER THIS ARTICLE
VI SHALL CONTINUE, SUBJECT TO THE TERMS AND CONDITIONS PROVIDED IN THIS
AGREEMENT, IN FULL FORCE AND EFFECT NOTWITHSTANDING THE EXPIRATION OR
TERMINATION OF THIS AGREEMENT, WITH RESPECT TO ANY CLAIM ARISING OUT OF AN EVENT
OR CONDITION WHICH OCCURRED OR EXISTED PRIOR TO SUCH EXPIRATION OR TERMINATION.

6.11          LIMITATION OF LIABILITY.  NEITHER PARTY SHALL BE LIABLE UNDER THIS
AGREEMENT IN ANY ACTION AT LAW OR IN EQUITY, WHETHER BASED ON CONTRACT, TORT,
STRICT LIABILITY, INDEMNITY OR OTHERWISE, FOR ANY SPECIAL INCIDENTAL, INDIRECT,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR LOSSES, INCLUDING ANY LOSS OF
REVENUE, INCOME, CLAIMS OF CUSTOMERS, PROFITS OR INVESTMENT OPPORTUNITIES.

ARTICLE VII
MISCELLANEOUS PROVISIONS

7.1              AMENDMENT AND MODIFICATION.  THIS AGREEMENT MAY BE AMENDED,
MODIFIED, OR SUPPLEMENTED ONLY BY WRITTEN AGREEMENT EXECUTED BY BOTH PARTIES.

7.2              WAIVER OF COMPLIANCE; CONSENTS.  EXCEPT AS OTHERWISE PROVIDED
IN THIS AGREEMENT, ANY FAILURE OF EITHER PARTY TO COMPLY WITH ANY OBLIGATION,
COVENANT, AGREEMENT, OR CONDITION HEREIN MAY BE WAIVED BY THE PARTY ENTITLED TO
THE BENEFITS THEREOF ONLY BY A WRITTEN INSTRUMENT SIGNED BY THE PARTY GRANTING
SUCH WAIVER, BUT SUCH WAIVER OR FAILURE TO INSIST UPON STRICT COMPLIANCE WITH
SUCH OBLIGATION, COVENANT, AGREEMENT, OR CONDITION WILL NOT OPERATE AS A WAIVER
OF, OR ESTOPPEL WITH RESPECT TO, ANY SUBSEQUENT OR OTHER FAILURE.

7.3              NOTICES.  ANY NOTICE, DEMAND, REQUEST OR OTHER COMMUNICATION
REQUIRED OR PERMITTED TO BE GIVEN PURSUANT TO THIS AGREEMENT SHALL BE IN WRITING
AND SIGNED BY THE PARTY GIVING SUCH NOTICE, DEMAND, REQUEST OR OTHER
COMMUNICATION AND SHALL BE HAND DELIVERED OR SENT BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, NATIONALLY OR INTERNATIONALLY RECOGNIZED OVERNIGHT COURIER TO
THE OTHER PARTY AT THE ADDRESS SET FORTH BELOW:

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If to Idaho Power:

Idaho Power Company

 

1221 West Idaho Street

 

Boise, ID 83702

 

Attn:  N. Vernon Porter,

 

 

Vice President, Engineering and Operations

 

Telephone:   208-388-2850

 

 

If to PacifiCorp:

PacifiCorp

 

825 NE Multnomah Street, Suite 1600

 

Portland, OR 97232

 

Attn:    Director, Transmission Service

 

Telephone:   503-813-6712

 

(B)            EACH PARTY SHALL HAVE THE RIGHT TO CHANGE THE PLACE TO WHICH ANY
NOTICE, DEMAND, REQUEST OR OTHER COMMUNICATION SHALL BE SENT OR DELIVERED BY
SIMILAR NOTICE SENT IN LIKE MANNER TO THE OTHER PARTY.  THE EFFECTIVE DATE OF
ANY NOTICE, DEMAND, REQUEST OR OTHER COMMUNICATION ISSUED PURSUANT TO THIS
AGREEMENT SHALL BE WHEN:  (I) DELIVERED TO THE ADDRESS OF THE PARTY PERSONALLY,
BY MESSENGER, BY A NATIONALLY OR INTERNATIONALLY RECOGNIZED OVERNIGHT DELIVERY
SERVICE OR OTHERWISE; OR (II) RECEIVED OR REJECTED BY THE PARTY, IF SENT BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, IN EACH CASE, ADDRESSED TO THE PARTY
AT ITS ADDRESS AND MARKED TO THE ATTENTION OF THE PERSON DESIGNATED ABOVE (OR TO
SUCH OTHER ADDRESS OR PERSON AS A PARTY MAY DESIGNATE BY NOTICE TO THE OTHER
PARTY EFFECTIVE AS OF THE DATE OF RECEIPT BY SUCH PARTY).

7.4              ASSIGNMENT.  THIS AGREEMENT AND ALL OF THE PROVISIONS HEREOF
WILL BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES AND THEIR
RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS, BUT NEITHER THIS AGREEMENT NOR ANY
OF THE RIGHTS, INTERESTS, OR OBLIGATIONS HEREUNDER MAY BE ASSIGNED BY EITHER
PARTY, WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY.  NO PROVISION OF
THIS AGREEMENT, OTHER THAN SECTION 6.2, CREATES ANY RIGHTS, CLAIMS OR BENEFITS
INURING TO ANY PERSON THAT IS NOT A PARTY HERETO.

7.5              GOVERNING LAW; EXCLUSIVE CHOICE OF FORUM; REMEDIES.

(A)             THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS AGREEMENT, AND ANY CLAIM OR CONTROVERSY ARISING OUT OF THIS AGREEMENT
(WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY), INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY, EFFECT, PERFORMANCE AND REMEDIES WITH RESPECT TO THIS
AGREEMENT, SHALL BE GOVERNED BY AND INTERPRETED, CONSTRUED, AND DETERMINED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF IDAHO (REGARDLESS OF THE LAWS THAT
MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAW).  EACH
PARTY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY COURT
WITHIN THE STATE OF IDAHO, IN CONNECTION WITH ANY MATTER BASED UPON OR ARISING
OUT OF THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREIN, AGREES THAT PROCESS
MAY BE SERVED UPON THEM IN ANY MANNER AUTHORIZED BY THE LAWS OF THE STATE OF
IDAHO FOR SUCH PERSONS AND WAIVES AND COVENANTS NOT TO ASSERT OR PLEAD ANY
OBJECTION WHICH THEY MIGHT OTHERWISE HAVE TO SUCH JURISDICTION, VENUE OR
PROCESS.

(b)            EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW,

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ANY AND ALL RIGHTS TO A TRIAL BY JURY WITH RESPECT TO ANY DISPUTE ARISING UNDER
THIS AGREEMENT.

7.6              SEVERABILITY.  ANY TERM OR PROVISION OF THIS AGREEMENT THAT IS
INVALID OR UNENFORCEABLE IN ANY SITUATION IN ANY JURISDICTION WILL NOT AFFECT
THE VALIDITY OR ENFORCEABILITY OF THE REMAINING TERMS AND PROVISIONS HEREOF OR
THE VALIDITY OR ENFORCEABILITY OF THE OFFENDING TERM OR PROVISION IN ANY OTHER
SITUATION OR IN ANY OTHER JURISDICTION.

7.7              ENTIRE AGREEMENT.  THIS AGREEMENT WILL BE A VALID AND BINDING
AGREEMENT OF THE PARTIES ONLY IF AND WHEN IT IS FULLY EXECUTED AND DELIVERED BY
THE PARTIES, AND UNTIL SUCH EXECUTION AND DELIVERY NO LEGAL OBLIGATION WILL BE
CREATED BY VIRTUE HEREOF.  THIS AGREEMENT, TOGETHER WITH THE SCHEDULES AND
EXHIBITS HERETO AND THE RELATED DOCUMENTS DELIVERED UNDER OR IN ACCORDANCE
HEREWITH, EMBODIES THE ENTIRE AGREEMENT AND UNDERSTANDING OF THE PARTIES HERETO
IN RESPECT OF THE CONTEMPLATED TRANSACTIONS.  THIS AGREEMENT AND THE RELATED
DOCUMENTS  SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS BETWEEN THE PARTIES
WITH RESPECT TO SUCH SUBJECT MATTER HEREOF.

7.8              EXPENSES.  EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT,
EACH PARTY SHALL BEAR ITS OWN EXPENSES (INCLUDING ATTORNEYS’ FEES) INCURRED IN
CONNECTION WITH THE PREPARATION, NEGOTIATION, EXECUTION AND PERFORMANCE OF THIS
AGREEMENT AND EACH OTHER RELATED DOCUMENT AND THE CONSUMMATION OF THE
CONTEMPLATED TRANSACTIONS HEREBY AND THEREBY.

7.9              DELIVERY.  THIS AGREEMENT, AND ANY RELATED DOCUMENTS DELIVERED
UNDER OR IN ACCORDANCE HEREWITH, MAY BE EXECUTED IN MULTIPLE COUNTERPARTS (EACH
OF WHICH WILL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH TOGETHER WILL CONSTITUTE
ONE AND THE SAME INSTRUMENT), AND MAY BE DELIVERED BY ELECTRONIC TRANSMISSION,
WITH ORIGINALS TO FOLLOW BY OVERNIGHT COURIER OR CERTIFIED MAIL (RETURN RECEIPT
REQUESTED).

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, each of the Parties has caused this Joint Purchase and Sale
Agreement to be executed by its duly authorized officer as of the date first
above written.

 

IDAHO POWER COMPANY

 

 

By: /s/ Dan B. Minor
Name:   Dan B. Minor
Title:  EVP, Operations

 

 

PACIFICORP

 

 

By:  /s/ Patrick Reiten
Name:  Patrick Reiten
Title:  President
                                                                             

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Exhibit A

Description of Hemingway Substation Facilities

Section I.  Description of Hemingway Substation Facilities.

The Hemingway Substation Facilities include all above ground 500kV structures,
bus, and equipment and associated foundations starting at the 230kV side of the
transformer high-side air break, 501H, to the extents of the station yard where
the MPSN (Midpoint Substation) 1 and SMLK (Summer Lake) line terminals depart to
the tap line segments.  The major equipment included in the Hemingway Substation
Facilities consist of six 500kV breakers and one spare 500kV breaker (stored on
location), seventeen 500kV airbreaks, one SMLK line reactor bank (three 1-phase
units), and one shunt capacitor bank and associated barrier fence attached to
bus #2.  Also included in the Hemingway Substation Facilities are 13 control,
protection and line carrier panels, 3 intertie cabinets and their associated
control cables from the panels to the yard equipment.  The Hemingway Substation
Facilities also include all components associated with both tap segments for the
MPSN 1 and SMLK line terminals extending and connecting to the existing
Midpoint–Summer Lake Line.

STATION

 

 

 

 

QTY

Equipment Description

Item

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 2000Amp

206

1

Power Circuit Breaker, 550kV 2000Amp

204

1

Power Circuit Breaker, 550kV 2000Amp

204

10

Local Equipment Annunciator Units for Reactors and Breakers

 

1

Shunt Reactor, 317.5/550kV, 44.33

201-1

 

                                                                             

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MVA

 

1

Shunt Reactor, 317.5/550kV, 44.33 MVA

201-1

1

Shunt Reactor, 317.5/550kV, 44.33 MVA

201-1

1

Shunt Capacitor, 550kV 220MVAR Expandable to 330MVAR

203

13

Switch, Motor Operated Airbreak, 500kV 4000A

208

3

Switch, Motor Operated Airbreak, 500kV 2000A

209-1

1

Switch, Motor Operated Airbreak w/ GND Switch, 500kV 2000A

209-2

12

Capacitor Voltage Transformer, 500kV

211

6

Capacitor Voltage Transformer, 500kV w/ Carrier Accessories

212

6

Line Trap, 500kV 3000A

214-1

6

Line Tuner, Single Phase Units

214-2

12

Surge Arrestor, 318kV MCOV

215

6

Surge Arrestor, 144kV MCOV

238

138

Insulator, Station Post, 500kV 1800BIL

217

48

Insulator, Station Post, 500kV 1800BIL

218

153

Insulator, Suspension, Polymer 500kV Class

220

 

 

 

QTY

Structure Description

Item

 

 

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2

Steel Structure, 500kV Line-Deadend A-Frame Structure

100-1

4

Steel Structure, 500kV Line-Deadend A-Frame Structure

100-2

51

Steel Structure, 500kV 3-ph Airbreak Support

106-1

12

Steel Structure, 500kV CCVT Structure

107-1

6

Steel Structure, 500kV Line Trap Structure

107-2

9

Steel Structure, 500kV Surge Arrestor Structure

108

10

Steel Structure, 500kV Strain Bus A-Frame Structure

101

2

Steel Structure, 500kV Transfer Bus Structure, Reactor

103

2

Steel Structure, 500kV Transfer Bus Structure, Spare for Reactor

103

6

Steel Structure, 500kV 3-ph Bus Support, Future Airbreak Support

106-2

117

Steel Structure, Lally, 500kV 1-ph Low Bus Support

110

3

Steel Structure, Lally, 500kV 1-ph Low Bus Support

110

16

Steel Structure, Lally, 500kV 1-ph Low Bus Support

111

 

 

 

QTY

Conductor Description

Item

3,500 ft

Conductor, 6” Aluminum Pipe, Schedule 80, 6063-T6

300

3,500 ft

Conductor, 1590 ACSR (Dampening for 6” Bus)

303

 

 

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20,000 ft

Conductor, Strain Bus, 1780 ACSS “CHUKAR” 1.601 Diameter

304

6,750 ft

Conductor, 3/8” EHS Shield Wire

306

75,615 ft

Control Cable

 

 

 

 

QTY

Panel Description

P Number

1

Panel E9: SMLK 11-1 (Pri. #1 Relay)

5933

1

Panel E10: SMLK 11-2 (Pri. #2 Relay & 535A/536A Control)

5934

1

Panel E11: SMLK 11-3 (Pri. #3 Relay)

5935

1

Panel E12: SMLK L511 Protection & 511Z Control

5936

1

Panel E13: SMLK 511Z BF & Lockout

5937

1

Panel F14: RAS A & B (MPSN-HMWY-SMLK Remedial Action)

5947

1

Panel G13: MPSN#1 Power Line Carriers (RFL-9780-1, RFL-9780-2)

5953

1

Panel G14: SMLK Power Line Carriers (RFL-9780-1, RFL-9780-2)

5954

1

Panel H9: MPSN#1 11-1 (Pri. #1 Relay)

5955

1

Panel H10: MPSN#1 11-2 (Pri. #2 Relay & 538A/539A Control)

5956

1

Panel H11: MPSN#1 11-3 (Pri. #3 Relay)

5957

1

Panel L13: C513 11-1 (Pri. #1 Relay & 513W Control)

5966

1

Panel L14: C513 11-2 (Pri. #2 Relay)

5967

13

Panel Rack and Frames

 

 

 

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1

Intertie Cabinet EF2: SUMMER LAKE 500kV LINE (535A/536A/511Z/L511/CCVT’s)

5985

1

Intertie Cabinet GH@: MPSN #1 500kV LINE (538A/539A/CCVT’s)

5987

1

Intertie Cabinet KL2: MPSN #2 500kV LINE(FUTURE) / C513

5991

 

 

 

QTY

Foundation Description

 

156

Other structures (for Items 101, 103, 106-2, 100, 111)

 

6

Deadend Structures (for Items 100-1 and 100-2)

 

78

Equipment Structures

 

3

Reactor oil containment

 

370 ft

Fence, Capacitor Bank Barrier

 

6

Key Interlock for Capacitor Bank Barrier Fence

 

 

 

 

TAP

 

 

 

 

 

QTY

Line Material Description

 

8

Dead-end, Single Pole Tubular Steel w/ Foundation

 

2

Tangent, Single Pole Tubular Steel w/ Foundation

 

2406

Insulator, 10” 52-5 b&s 30k

 

6

Insulator, Horizontal Post 500kV

 

 

 

 

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EXECUTION COPY

 

 

40,500 ft

Conductor,  1272 ACSR 45/7 Bitten

 

8,500 ft

Overhead Ground Wire, 3/8 EHS Steel

 

 

 

 

Section II.  [Intentionally omitted.]

 

 

 

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EXECUTION COPY

 

Exhibit B

Description of Populus Substation Facilities

 

 

Section I.  Description of Populus Substation Facilities.

 

The Populus Substation Facilities include all above ground 345kV structures,
bus, breakers, capacitors, associated equipment and foundations as listed below.
 The major equipment included in the Populus Substation Facilities consist of
sixteen 345 kV breakers, thirty-five air breaks, two line reactors, two series
capacitor banks, one shunt capacitor bank and eleven coupling capacitor voltage
transformers (CCVT), including all components associated with connection of the
Bridger-Populus Transmission Lines (#s 1 and 2), the Populus–Borah Transmission
Lines (#s 1 and 2), the Populus–Ben Lomond Transmission Lines (#s 1, 2 and 3)
and the Populus–Kinport Transmission Line.

 

Transmission Line

 

   

 

Item

 

Description

Qnty

 

 

 

Dead End

Mono pole steel

10

Tangent

Mono pole steel

35

Dead End

Three pole steel

10

 

 

 

Substation

 

 

 

Item

Description 

Qnty

 

 

 

345 kV breaker

362kV, 3000A, 50kA, Gas Filled, w/Pre-insertion Resistors 13

 

 

322, 327, 328, 342, 343, 346, 347, 348, 362, 363, 366, 367, 368

 

 

 

 

345 kV breaker

362kV, 2000A, 50kA, Gas Filled, for shunt reactor

2

 

R393, R392

 

 

 

 

345 kV breaker

362kV, 3000A, 50kA, Gas Filled, for Capacitor Bank

1

 

C329

 

 

 

 

345 kV switch

362kV, 3000A, Vertical Break, W/Ground Switch (Line)

8

 

 

 

345 kV Switch

362kV, 3000A, Vertical Break (Breaker Isolation)

20

 

 

 

345 kV Switch

362kV, 2000A, Vertical Break (Capacitor & Reactor)

3

 

 

                                                                             

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EXECUTION COPY

 

 

345 kV Switch

362kV, 3000A, Vertical Break, W/Ground Switch

4

 

382G, 352G, 383G, 353G

 

 

 

 

345 kV CCVT

1550KV BIL, 1800/3000:1, No Carrier Accessories

6

 

 

 

345 kV CCVT

1550KV BIL, 1800/3000:1, With Carrier Accessories

5

 

 

 

345 kV CT/VT

CT/VT Metering Units, 345kV

15

 

 

 

345 kV Capacitor

 

 

 

Bank

362kV, 220/F275 MVar

1

 

 

 

345 kV Series

 

 

 

Capacitor

347-262 kV, 1550 kV BIL

2

 

 

 

345 kV Reactors

362kV, 100MVA

2

 

 

 

Insulator

Station Post, 345kV

738

 

 

 

Insulator

Suspension, 345kV

48

 

 

 

Bus

Rigid and Wire Bus, Assemblies, and Connectors

1

 

 

 

Bus

Rigid & Wire Bus, Ass. & Connectors – 345kV Series Capacitor

2

 

 

 

Security

Security System, Conduit Installation

1

 

 

 

Communications

Power Line Carrier, With All Additional Equipment

5

 

 

 

Line Traps

345kV, 3000A

5

 

 

 

Lightning Arresters

345 kV, 212kV MCOV

24

 

 

 

Oil Containment

System and Foundation

1

 

 

 

Foundations

Concrete - Drilled Piers

5685 Yds

 

 

 

Steel

Structural Steel Supports

2374881 lbs.

 

 

 

 

 

Section II. [Intentionally omitted.]

 

 

 

--------------------------------------------------------------------------------

 

 

 

EXECUTION COPY

 

Exhibit C

Hemingway Bill of Sale

THIS HEMINGWAY BILL OF SALE is made and entered into as of [__________], 2010
(this “Bill of Sale”) by Idaho Power Company, an Idaho corporation (“Idaho
Power”), for the benefit of PacifiCorp, an Oregon corporation (“PacifiCorp”). 
Capitalized terms used but not defined in this Bill of Sale shall have the
meanings assigned to such terms in the Agreement (as defined below).

RECITALS

WHEREAS, pursuant to that certain Joint Purchase and Sale Agreement, dated as of
[__________], 2010 (the “Agreement”), between Idaho Power and PacifiCorp, Idaho
Power has agreed, subject to the terms and conditions of the Agreement, to sell,
assign, convey, transfer and deliver to PacifiCorp, free and clear of all
Encumbrances (except for Idaho Power Permitted Encumbrances), an undivided
ownership interest, as tenant in common, equal to PacifiCorp’s Hemingway
Ownership Interest in all of Idaho Power’s right, title and interest in, to, and
under the Purchased Assets (as more fully described below); and

WHEREAS, pursuant to the Agreement, Idaho Power has agreed to enter into this
Bill of Sale pursuant to which PacifiCorp’s Hemingway Ownership Interest in the
Purchased Assets will be sold, transferred, assigned, conveyed, set over and
delivered to PacifiCorp (as more fully described below).

NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Idaho Power hereby agrees as follows:

1.         Sale.  Subject to the terms and conditions of the Agreement,
including delivery of the consideration specified therein, Idaho Power does
hereby sell, assign, convey, transfer and deliver to PacifiCorp, free and clear
of all Encumbrances (except for Idaho Power Permitted Encumbrances), an
undivided ownership interest, as tenant in common, equal to PacifiCorp’s
Hemingway Ownership Interest in all of Idaho Power’s right, title, and interest
in and to the Hemingway Substation Facilities (the “Purchased Assets”).

2.         Excluded Assets Not Assigned.  Notwithstanding anything expressed
herein to the contrary, the Excluded Assets are specifically excluded from the
Purchased Assets as provided in the Agreement and shall be retained by Idaho
Power at and following the Closing.

3.         Further Assurances.  Idaho Power shall, from time to time after the
delivery of this Bill of Sale, at PacifiCorp’s request and expense, prepare,
execute and deliver to PacifiCorp such other instruments of conveyance and
transfer and take such other action as PacifiCorp may reasonably request in
order to sell, transfer, convey, assign and deliver and vest in PacifiCorp, its
successors and assigns, title to and possession of PacifiCorp’s Hemingway
Ownership Interest in the Hemingway Substation Facilities free and clear of all
Encumbrances (except for Idaho Power

            C-1

 

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EXECUTION COPY

 

Permitted Encumbrances) as provided in the Agreement and to further effect the
purposes of this Bill of Sale.

4.         Relationship to Agreement; Construction.  This Bill of Sale is
delivered pursuant to the Agreement.  This Bill of Sale and the provisions
hereof are subject, in all respects, to the terms and conditions of the
Agreement, including all of the covenants, representations and warranties
contained therein, all of which shall survive the execution and delivery of this
Bill of Sale to the extent indicated in the Agreement.  To the extent that any
of the Purchased Assets described herein are real property and not personal
property, it is the intention of the Parties that such assets be transferred
pursuant to the Hemingway Deed.  In the event of any conflict between the terms
of the Agreement and the terms of this Bill of Sale, the terms of the Agreement
shall prevail.

5.         No Waiver.  It is understood and agreed that nothing in this Bill of
Sale shall constitute a waiver or release of any claims arising out of the
contractual relationships between Idaho Power and PacifiCorp.

6.         No Third Party Beneficiary.  Nothing in this Bill of Sale, express or
implied, is intended or shall be construed to confer upon, or give to, any
person other than PacifiCorp, Idaho Power and their successors and permitted
assigns any remedy or claim under or by reason of this Bill of Sale or any
agreements, terms, covenants or conditions hereof and all the agreements, terms,
covenants and conditions contained in this Bill of Sale shall be for the sole
and exclusive benefit of PacifiCorp, Idaho Power and their successors and
permitted assigns.

7.         Binding Effect.  This Bill of Sale and all of the provisions hereof
shall be binding upon and shall inure to the benefit of Idaho Power, PacifiCorp
and their respective successors and permitted assigns.

8.         Governing Law.  This Bill of Sale shall be governed by and construed
in accordance with the laws of the State of Idaho (regardless of the laws that
might otherwise govern under applicable principles of conflicts of law) as to
all matters, including matters of validity, construction, effect, performance
and remedies.

9.         Severability.  Any term or provision of this Bill of Sale that is
invalid or unenforceable in any situation will not affect the validity or
enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other situation or in
any other jurisdiction.

10.       Counterparts.  This Bill of Sale may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this Bill
of Sale and all of which, when taken together, will be deemed to constitute one
and the same agreement.

11.       Notices.  All notice, requests, demands and other communications under
this Bill of Sale shall be given in accordance with Section 7.3 of the Agreement
and at the addresses set forth therein.

[Signature page follows]

 C-2

 

--------------------------------------------------------------------------------

 

 

 

EXECUTION COPY

 

IN WITNESS WHEREOF, Idaho Power has caused its duly authorized representative to
execute this Hemingway Bill of Sale as of the date first above written.

 

IDAHO POWER COMPANY

 

By: ________________________
Name:
Title:

 

--------------------------------------------------------------------------------

 

 

 

EXECUTION COPY

 

 

Exhibit D

 

Populus Bill of Sale

THIS POPULUS BILL OF SALE is made and entered into as of [__________], 2010
(this “Bill of Sale”) by PacifiCorp, an Oregon corporation (“PacifiCorp”), for
the benefit of Idaho Power Company, an Idaho corporation (“Idaho Power”). 
Capitalized terms used but not defined in this Bill of Sale shall have the
meanings assigned to such terms in the Agreement (as defined below).

RECITALS

WHEREAS, pursuant to that certain Joint Purchase and Sale Agreement, dated as of
[__________], 2010 (the “Agreement”), between PacifiCorp and Idaho Power,
PacifiCorp has agreed, subject to the terms and conditions of the Agreement, to
sell, assign, convey, transfer and deliver to Idaho Power, free and clear of all
Encumbrances (except for PacifiCorp Permitted Encumbrances), an undivided
ownership interest, as tenant in common, equal to Idaho Power’s Populus
Ownership Interest in all of PacifiCorp’s right, title and interest in, to, and
under the Purchased Assets (as more fully described below); and

WHEREAS, pursuant to the Agreement, PacifiCorp has agreed to enter into this
Bill of Sale pursuant to which Idaho Power’s Populus Ownership Interest in the
Purchased Assets will be sold, transferred, assigned, conveyed, set over and
delivered to Idaho Power (as more fully described below).

NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, PacifiCorp hereby agrees as follows:

1.         Sale.  Subject to the terms and conditions of the Agreement,
including delivery of the consideration specified therein, PacifiCorp does
hereby sell, assign, convey, transfer and deliver to Idaho Power, free and clear
of all Encumbrances (except for PacifiCorp Permitted Encumbrances), an undivided
ownership interest, as tenant in common, equal to Idaho Power’s Populus
Ownership Interest in all of PacifiCorp’s right, title, and interest in and to
the Populus Substation Facilities (the “Purchased Assets”).

2.         Excluded Assets Not Assigned.  Notwithstanding anything expressed
herein to the contrary, the Excluded Assets are specifically excluded from the
Purchased Assets as provided in the Agreement and shall be retained by
PacifiCorp at and following the Closing.

3.         Further Assurances.  PacifiCorp shall, from time to time after the
date hereof, at Idaho Power’s request and expense, prepare, execute and deliver
to Idaho Power such other instruments of conveyance and transfer and take such
other action as Idaho Power may reasonably request in order to sell, transfer,
convey, assign and deliver and vest in Idaho Power, its successors and assigns,
title to and possession of Idaho Power’s Populus Ownership Interest in the
Populus Substation Facilities free and clear of all Encumbrances (except for
PacifiCorp

            D-1

 

--------------------------------------------------------------------------------

 

EXECUTION COPY

Permitted Encumbrances) as provided in the Agreement and to further effect the
purposes of this Bill of Sale.

4.         Relationship to Agreement; Construction.  This Bill of Sale is
delivered pursuant to the Agreement.  This Bill of Sale and the provisions
hereof are subject, in all respects, to the terms and conditions of the
Agreement, including all of the covenants, representations and warranties
contained therein, all of which shall survive the execution and delivery of this
Bill of Sale to the extent indicated in the Agreement.  To the extent that any
of the Purchased Assets described herein are real property and not personal
property, it is the intention of the Parties that such assets be transferred
pursuant to the Populus Deed.  In the event of any conflict between the terms of
the Agreement and the terms of this Bill of Sale, the terms of the Agreement
shall prevail.

5.         No Waiver.  It is understood and agreed that nothing in this Bill of
Sale shall constitute a waiver or release of any claims arising out of the
contractual relationships between PacifiCorp and Idaho Power.

6.         No Third Party Beneficiary.  Nothing in this Bill of Sale, express or
implied, is intended or shall be construed to confer upon, or give to, any
person other than Idaho Power, PacifiCorp and their successors and permitted
assigns any remedy or claim under or by reason of this Bill of Sale or any
agreements, terms, covenants or conditions hereof and all the agreements, terms,
covenants and conditions contained in this Bill of Sale shall be for the sole
and exclusive benefit of Idaho Power, PacifiCorp and their successors and
permitted assigns.

7.         Binding Effect.  This Bill of Sale and all of the provisions hereof
shall be binding upon and shall inure to the benefit of PacifiCorp, Idaho Power
and their respective successors and permitted assigns.

8.         Governing Law.  This Bill of Sale shall be governed by and construed
in accordance with the laws of the State of Idaho (regardless of the laws that
might otherwise govern under applicable principles of conflicts of law) as to
all matters, including matters of validity, construction, effect, performance
and remedies.

9.         Severability.  Any term or provision of this Bill of Sale that is
invalid or unenforceable in any situation will not affect the validity or
enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other situation or in
any other jurisdiction.

10.       Counterparts.  This Bill of Sale may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this Bill
of Sale and all of which, when taken together, will be deemed to constitute one
and the same agreement.

11.       Notices.  All notice, requests, demands and other communications under
this Bill of Sale shall be given in accordance with Section 7.3 of the Agreement
and at the addresses set forth therein.

[Signature page follows]  

D-2

--------------------------------------------------------------------------------

 

 

 

EXECUTION COPY

 

IN WITNESS WHEREOF, PacifiCorp has caused its duly authorized representative to
execute this Populus Bill of Sale as of the date first above written.

 

 

PACIFICORP

 

By: ________________________
Name:
Title:

 

                                                                               

--------------------------------------------------------------------------------

 

 

 

EXECUTION COPY

 

Exhibit E

Hemingway Assignment and Assumption Agreement

This HEMINGWAY ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment
Agreement”), dated as of this ___ day of ________, 2010, is entered into by and
between Idaho Power Company, an Idaho corporation (“Idaho Power”), and
PacifiCorp, an Oregon corporation (“PacifiCorp”).  Capitalized terms used but
not defined in this Assignment Agreement shall have the meanings assigned to
such terms in the Agreement (as defined below).

WHEREAS, pursuant to that certain Joint Purchase and Sale Agreement, dated as of
[__________], 2010 (the “Agreement”), between Idaho Power and PacifiCorp, (a)
Idaho Power has agreed, subject to the terms and conditions of the Agreement, to
sell, assign, convey, transfer and deliver to PacifiCorp, free and clear of all
Encumbrances (except for Idaho Power Permitted Encumbrances), an undivided
ownership interest, as tenant in common, equal to PacifiCorp’s Hemingway
Ownership Interest in all of Idaho Power’s right, title and interest in, to, and
under the Hemingway Transferable Permits, but excluding the Idaho Power Excluded
Assets and (b) PacifiCorp has agreed to purchase and accept the same from Idaho
Power.

NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, PacifiCorp and Idaho Power hereby agrees as follows:

1.         Assignment of Hemingway Transferable Permits.  Subject to the terms
and conditions of the Agreement, Idaho Power hereby assigns, transfers, sets
over, delivers and otherwise conveys to PacifiCorp and its successors and
assigns forever, free and clear of all Encumbrances (other than Idaho Power
Permitted Encumbrances), an undivided ownership interest equal to PacifiCorp’s
Hemingway Ownership Interest in all of Idaho Power’s right, title, and interest
in, to, and under the Hemingway Transferable Permits, to have and to hold with
each and every one of the rights, privileges and appurtenances thereto belonging
or in any wise appertaining thereto.  For the avoidance of doubt, Idaho Power is
not assigning to PacifiCorp any interest in assets other than the Hemingway
Transferable Permits.  Without limiting the generality of the foregoing
sentence, Idaho Power is not assigning or otherwise transferring to PacifiCorp
any portion of the Idaho Power Excluded Assets.

2.         Acceptance and Assumption of Hemingway Transferable Permits.  Subject
to the terms and conditions of the Agreement, PacifiCorp hereby accepts and
assumes and agrees to perform and observe, to the extent of PacifiCorp’s
Hemingway Ownership Interest, Idaho Power’s rights, obligations, duties and
liabilities under the Hemingway Transferable Permits, to the extent allocable to
any period on or after the Closing.  From and after the Closing Date, PacifiCorp
is and shall be bound by, and shall enjoy, to the extent of PacifiCorp’s
Hemingway Ownership Interest, the benefits of, the Hemingway Transferable
Permits, pursuant to the terms and conditions of thereof.

3.         Reliance.  Any individual, partnership, corporation or other entity
may rely, without further inquiry, upon the powers and rights herein granted to
PacifiCorp and upon any notarization, certification, verification or affidavit
by any notary public of any State relating to

            E-1

 

--------------------------------------------------------------------------------

 

 

 

EXECUTION COPY

the authorization, execution and delivery of this Assignment Agreement or to the
authenticity of any copy, conformed or otherwise, hereof.

4.         Relationship to Agreement.  This Assignment Agreement is delivered
pursuant to the Agreement.  This Assignment Agreement and the provisions hereof
are subject, in all respects, to the terms and conditions of the Agreement,
including all of the covenants, representations and warranties contained
therein, all of which shall survive the execution and delivery of this
Assignment Agreement to the extent indicated in the Agreement.  In the event of
any conflict between the terms of the Agreement and the terms of this Assignment
Agreement, the terms of the Agreement shall prevail.

5.         No Waiver.  It is understood and agreed that nothing in this
Assignment Agreement shall constitute a waiver or release of any claims arising
out of the contractual relationships between Idaho Power and PacifiCorp.

6.         No Third Party Beneficiary.  Nothing in this Assignment Agreement,
express or implied, is intended or shall be construed to confer upon, or give
to, any person other than PacifiCorp, Idaho Power and their successors and
permitted assigns any remedy or claim under or by reason of this Assignment
Agreement or any agreements, terms, covenants or conditions hereof and all the
agreements, terms, covenants and conditions contained in this Assignment
Agreement shall be for the sole and exclusive benefit of PacifiCorp, Idaho Power
and their successors and permitted assigns.

7.         Binding Effect.  This Assignment Agreement and all of the provisions
hereof shall be binding upon and shall inure to the benefit of Idaho Power,
PacifiCorp and their respective successors and permitted assigns.

8.         Governing Law.  This Assignment Agreement shall be governed by and
construed in accordance with the laws of the State of Idaho (regardless of the
laws that might otherwise govern under applicable principles of conflicts of
law) as to all matters, including matters of validity, construction, effect,
performance and remedies.

9.         Severability.  Any term or provision of this Assignment Agreement
that is invalid or unenforceable in any situation will not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.

10.       Counterparts.  This Assignment Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original copy of this
Assignment Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.

11.       Notices.  All notice, requests, demands and other communications under
this Assignment Agreement shall be given in accordance with Section 7.3 of the
Agreement and at the addresses set forth therein.

 

            E-2

 

--------------------------------------------------------------------------------

 

 

 

EXECUTION COPY

 

12.       No Amendment.  No amendment to the terms and conditions of this
Assignment Agreement shall be valid and binding on PacifiCorp or Idaho Power
unless made in writing and signed by an authorized representative of each of
them.

[Signature page follows]  

 E-3

 

--------------------------------------------------------------------------------

 

 

 

EXECUTION COPY

 

IN WITNESS WHEREOF, each of PacifiCorp and Idaho Power has caused its duly
authorized representative to execute this Hemingway Assignment and Assumption
Agreement as of the date first above written.

 

 

IDAHO POWER COMPANY

 

By: ________________________
Name:
Title:

PACIFICORP

 

By: ________________________
Name:
Title:

                                                                               

--------------------------------------------------------------------------------

 

 

 

EXECUTION COPY

 

Exhibit F

Populus Assignment and Assumption Agreement

This POPULUS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment Agreement”),
dated as of this ___ day of ________, 2010, is entered into by and between Idaho
Power Company, an Idaho corporation (“Idaho Power”), and PacifiCorp, an Oregon
corporation (“PacifiCorp”).  Capitalized terms used but not defined in this
Assignment Agreement shall have the meanings assigned to such terms in the
Agreement (as defined below).

WHEREAS, pursuant to that certain Joint Purchase and Sale Agreement, dated as of
[__________], 2010 (the “Agreement”), between PacifiCorp and Idaho Power, (a)
PacifiCorp has agreed, subject to the terms and conditions of the Agreement, to
sell, assign, convey, transfer and deliver to Idaho Power, free and clear of all
Encumbrances (except for PacifiCorp Permitted Encumbrances), an undivided
ownership interest equal to Idaho Power’s Populus Ownership Interest in all of
PacifiCorp’s right, title and interest in, to, and under the Populus
Transferable Permits, but excluding the PacifiCorp Excluded Assets and (b) Idaho
Power has agreed to purchase and accept the same from PacifiCorp.

NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Idaho Power and PacifiCorp hereby agrees as follows:

1.         Assignment of Populus Transferable Permits.  Subject to the terms and
conditions of the Agreement, PacifiCorp hereby assigns, transfers, sets over,
delivers and otherwise conveys to Idaho Power and its successors and assigns
forever, free and clear of all Encumbrances (other than PacifiCorp Permitted
Encumbrances), an undivided ownership interest equal to Idaho Power’s Populus
Ownership Interest in all of PacifiCorp’s right, title, and interest in, to, and
under the Populus Transferable Permits  For the avoidance of doubt, PacifiCorp
is not assigning to Idaho Power any interest in assets other than the Populus
Transferable Permits.  Without limiting the generality of the foregoing
sentence, PacifiCorp is not assigning or otherwise transferring to Idaho Power
any portion of the PacifiCorp Excluded Assets.

2.         Acceptance and Assumption of Populus Transferable Permits.  Subject
to the terms and conditions of the Agreement, Idaho Power hereby accepts and
assumes and agrees to perform and observe, to the extent of Idaho Power’s
Populus Ownership Interest, PacifiCorp’s rights, obligations, duties and
liabilities under the Populus Transferable Permits, to the extent allocable to
any period on or after the Closing.  From and after the Closing Date, Idaho
Power is and shall be bound by, and shall enjoy, to the extent of Idaho Power’s
Populus Ownership Interest, the benefits of, the Populus Transferable Permits,
pursuant to the terms and conditions of thereof.

3.         Reliance.  Any individual, partnership, corporation or other entity
may rely, without further inquiry, upon the powers and rights herein granted to
Idaho Power and upon any notarization, certification, verification or affidavit
by any notary public of any State relating to the authorization, execution and
delivery of this Assignment Agreement or to the authenticity of any copy,
conformed or otherwise, hereof.

                                                                             

--------------------------------------------------------------------------------

 

 

 

EXECUTION COPY

 

4.         Relationship to Agreement.  This Assignment Agreement is delivered
pursuant to the Agreement.  This Assignment Agreement and the provisions hereof
are subject, in all respects, to the terms and conditions of the Agreement,
including all of the covenants, representations and warranties contained
therein, all of which shall survive the execution and delivery of this
Assignment Agreement to the extent indicated in the Agreement.  In the event of
any conflict between the terms of the Agreement and the terms of this Assignment
Agreement, the terms of the Agreement shall prevail.

5.         No Waiver.  It is understood and agreed that nothing in this
Assignment Agreement shall constitute a waiver or release of any claims arising
out of the contractual relationships between PacifiCorp and Idaho Power.

6.         No Third Party Beneficiary.  Nothing in this Assignment Agreement,
express or implied, is intended or shall be construed to confer upon, or give
to, any person other than Idaho Power, PacifiCorp and their successors and
permitted assigns any remedy or claim under or by reason of this Assignment
Agreement or any agreements, terms, covenants or conditions hereof and all the
agreements, terms, covenants and conditions contained in this Assignment
Agreement shall be for the sole and exclusive benefit of Idaho Power, PacifiCorp
and their successors and permitted assigns.

7.         Binding Effect.  This Assignment Agreement and all of the provisions
hereof shall be binding upon and shall inure to the benefit of PacifiCorp, Idaho
Power and their respective successors and permitted assigns.

8.         Governing Law.  This Assignment Agreement shall be governed by and
construed in accordance with the laws of the State of Idaho (regardless of the
laws that might otherwise govern under applicable principles of conflicts of
law) as to all matters, including matters of validity, construction, effect,
performance and remedies.

9.         Severability.  Any term or provision of this Assignment Agreement
that is invalid or unenforceable in any situation will not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.

10.       Counterparts.  This Assignment Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original copy of this
Assignment Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.

11.       Notices.  All notice, requests, demands and other communications under
this Assignment Agreement shall be given in accordance with Section 7.3 of the
Agreement and at the addresses set forth therein.

12.       No Amendment.  No amendment to the terms and conditions of this
Assignment Agreement shall be valid and binding on Idaho Power or PacifiCorp
unless made in writing and signed by an authorized representative of each of
them.

[Signature page follows]                           

         

--------------------------------------------------------------------------------

 

 

 

EXECUTION COPY

 

IN WITNESS WHEREOF, each of Idaho Power and PacifiCorp has caused its duly
authorized representative to execute this Populus Assignment and Assumption
Agreement as of the date first above written.

 

PACIFICORP

 

By: ________________________
Name:
Title:

 

IDAHO POWER COMPANY

 

By: ________________________
Name:
Title:

           

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

Exhibit G

Form of Hemingway Joint Ownership and Operating Agreement

 

This Hemingway Joint Ownership and Operating Agreement, dated this __ day of
____, 2010 (the “Execution Date”), is between Idaho Power Company, an Idaho
corporation, acting in its regulated transmission provider function (“Idaho
Power”), and PacifiCorp, an Oregon corporation, acting in its regulated
transmission provider function (“PacifiCorp”).  Each of Idaho Power and
PacifiCorp are sometimes hereinafter referred to individually as “Owner” and
collectively as “Owners”.

RECITALS:

WHEREAS, Idaho Power owns and operates certain facilities for the transmission
of electric power and energy in interstate commerce, including the Hemingway
substation (the “Hemingway Substation”) which Idaho Power is currently
constructing approximately 10 miles southwest of Melba, Idaho to provide
additional transfer capability for power to serve Idaho Power’s retail and
wholesale customers, including power to serve Idaho Power’s Treasure Valley
electric load, and to provide line terminal connections for additional
transmission lines including the Gateway West Transmission Project and
Boardman-Hemingway Project;

WHEREAS, PacifiCorp owns and operates certain facilities for the transmission of
electric power and energy in interstate commerce, including the Midpoint-Summer
Lake Line (as defined below) which is located near the Hemingway Substation;

WHEREAS, Idaho Power and PacifiCorp believe that interconnecting the Idaho Power
Transmission System at the Hemingway Substation with the PacifiCorp Transmission
System on the Midpoint-Summer Lake Line will benefit both of the Owners and
their customers;

WHEREAS, Idaho Power and PacifiCorp are parties to that certain Joint Purchase
and Sale Agreement, dated as of April 30, 2010 (the “JPSA”), pursuant to which
Idaho Power has sold to PacifiCorp and PacifiCorp has purchased from Idaho Power
an undivided ownership interest in certain transmission and interconnection
equipment and facilities at the Hemingway Substation used in connection with the
transmission of electric power and energy (consisting of the equipment and
facilities described in Section I of Exhibit A that were installed at the
Hemingway Substation on or before the Closing Date, the “Transferred
Transmission Facilities”);

WHEREAS, Idaho Power individually owns additional equipment and facilities at
the Hemingway Substation that serve the Idaho Power Transmission System and will
not be part of the Transmission Facilities (as defined below), but that Idaho
Power will make available to support the operation of the Transmission
Facilities (as further described in Section II of Exhibit A, the “Common
Facilities”);

WHEREAS, Idaho Power individually owns additional equipment and facilities at
the Hemingway Substation that will not be part of the Transmission Facilities,
jointly owned by the

 

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 Parties, or part of the Common Facilities used to support the operation of the
Transmission Facilities (the “Idaho Power Individually-Owned Hemingway
Facilities”); and

WHEREAS, PacifiCorp and Idaho Power desire to memorialize the terms and
conditions by which they will: (i) construct and commission additional
transmission and interconnection equipment and facilities at the Hemingway
Substation used in connection with the transmission of electric power and energy
(consisting of the equipment and facilities described in Section I of Exhibit A
that had not been installed at the Hemingway Substation on or before the Closing
Date, the “Jointly-Developed Transmission Facilities”); (ii) jointly own and
develop the Transferred Transmission Facilities and the Jointly-Developed
Transmission Facilities (collectively, the “Transmission Facilities”), (iii)
operate and maintain the Transmission Facilities; (iv) interconnect the Idaho
Power Transmission System and the PacifiCorp Transmission System at the
Hemingway Substation; and (v) establish the obligations of the Operator (as
defined below) with respect to compliance with Reliability Standards (as defined
below) applicable to the Transmission Facilities.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, PacifiCorp and Idaho Power agree as follows:

ARTICLE I
DEFINITIONS; RULES OF INTERPRETATION

1.01     Definitions.  Unless the context otherwise requires, the following
capitalized terms have the meanings given to them below:

“Affected Party” has the meaning given to such term in Section 11.01.

“Affected System” has the meaning given to such term in the applicable Owner’s
OATT.

“Affected System Operator” has the meaning given to such term in the applicable
Owner’s OATT.

“Affiliate” means, with respect to a Person, each other Person that, directly or
indirectly, controls, is controlled by or is under common control with, such
designated Person; provided, however, that in the case of PacifiCorp,
“Affiliate” means MidAmerican Energy Holdings Company and its direct and
indirect subsidiaries.  For the purposes of this definition, “control”
(including with correlative meanings, the terms “controlled by” and “under
common control with”), as used with respect to any Person, shall mean (i) the
direct or indirect right to cast at least fifty percent (50%) of the votes
exercisable at an annual general meeting (or its equivalent) of such Person or,
if there are no such rights, ownership of at least fifty percent (50%) of the
equity or other ownership interest in such Person, or (ii) the right to direct
the policies or operations of such Person.

“Agreement” means this Joint Ownership and Operating Agreement (including all
Exhibits attached hereto), as the same may be amended and supplemented from time
to time in accordance with the terms hereof.

 

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“Amendment” has the meaning given to such term in Section 7.01(a).

“Approved Courts” has the meaning given to such term in Section 18.04.

“Bankrupt” means, with respect to any Person, that such Person:   (i) files a
petition or otherwise commences, authorizes or acquiesces in the commencement of
a proceeding or cause of action under any bankruptcy, insolvency, reorganization
or similar law, or has any such petition filed or commenced against it, (ii)
makes an assignment or any general arrangement for the benefit of creditors,
(iii) otherwise becomes insolvent (however evidenced), (iv) has a liquidator,
administrator, receiver, trustee, conservator or similar official appointed with
respect to it or any substantial portion of its property or assets, or (v) is
generally unable to pay its debts as they fall due.

“Business Days” means any day except a Saturday, Sunday and any day which is a
legal holiday or a day on which banking institutions in New York, New York are
authorized or obligated by Governmental Requirements to close.

“Capacity Share” has the meaning given to such term in Section 4.02.

“Capital Upgrade Notice” has the meaning given to such term in Section 7.01.

 “Claims” has the meaning given to such term in Section 14.01(a).

“Closing Date” has the meaning given to such term in the JPSA.

“Code” has the meaning given to such term in Section 17.02.

“Commercially Reasonable Efforts” means the level of effort that a reasonable
electric utility would take in light of the then known facts and circumstances
to accomplish the required action at a then commercially reasonable cost (taking
into account the benefits to be gained thereby).

“Common Facilities” has the meaning given to such term in the recitals.

“Construction Budget” has the meaning given to such term in Section 3.05(b).

“Construction Costs” has the meaning given to such term in Section 3.05(a).

“Construction Costs Cap” has the meaning given to such term in Section 3.05(b).

“Construction Project” has the meaning given to such term in Section 3.01(a).

“Continuing Owner” has the meaning given to such term in Section 8.03.

 

 

“Costs” means, with respect to the Operator’s construction of facilities
pursuant to this Agreement, including the Transmission Facilities and capital
upgrades and improvements thereto, or such construction on behalf of the
Operator, the Operator’s actual cost of (i) preliminary surveys and
investigations and property acquisitions in connection with such

 

 

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facilities and (ii) the development, design, engineering, procurement and
construction of such facilities, including an allowance for funds used during
construction and applicable overheads determined in accordance with the
Operator’s customary practices, as calculated in accordance with FERC’s Uniform
System of Accounts.

“Damaged Facilities” has the meaning given to such term in Section 8.01.

“Damage Notice” has the meaning given to such term in Section 8.01.

“Decommissioning Notice” has the meaning given to such term in Section 9.03.

“Defaulting Owner” has the meaning given to such term in Section 12.01.

“Delegate” has the meaning given to such term in Section 5.04.

“Dispute” has the meaning given to such term in Section 18.01.

“Dispute Notice” has the meaning given to such term in Section 18.02.

“Disputing Party” has the meaning given to such term in Section 18.02.

“Electing Owner” has the meaning given to such term in Section 7.01(a).

“Event of Default” has the meaning given to such term in Section 12.01.

“Execution Date” has the meaning given to such term in the preamble.

“Executive(s)” has the meaning given to such term in Section 18.03(a).

“FERC” means the Federal Energy Regulatory Commission.

“FERC Methodology” has the meaning given to such term in Section 5.08(b).

“FERC Uniform System of Accounts” means the Uniform System of Accounts
Prescribed for Public Utilities and Licensees Subject to the Jurisdiction of the
Federal Power Act prescribed by FERC, and codified as of the Execution Date at
18 C.F.R. Part 101, as the same may be amended from time to time.

“Force Majeure” has the meaning given to such term in Section 11.01.

“Good Utility Practice” means any of the practices, methods and acts engaged in
or approved by a significant portion of the electric utility industry during the
relevant time period, or any of the practices, methods and acts which, in the
exercise of reasonable judgment in light of the facts known at the time the
decision was made, would have been expected to accomplish the desired result at
a reasonable cost consistent with good business practices, reliability, safety
and expedition.  Good Utility Practice is not intended to be limited to the
optimum practice, method, or act to the exclusion of all others, but rather to
be acceptable practices, methods, or

 

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acts generally accepted in the region, including those practices required by
Federal Power Act section 215(a)(4), 16 U.S.C. § 824o(a)(4)(2006).

“Governmental Authority” means any federal, state, local or municipal
governmental body; any governmental, quasi-governmental, regulatory or
administrative agency, commission, body or other authority exercising or
entitled to exercise any administrative, executive, judicial, legislative,
policy, regulatory or taxing authority or power, including FERC, NERC or any
regional reliability council; or any court or governmental tribunal, in each
case, having jurisdiction over either Owner (including Idaho Power in its
capacity as Operator) or any of its Affiliates or the ownership, use, operation
and maintenance, repair and reconstruction, or retirement and decommissioning of
all or a portion of the Transmission Facilities.

“Governmental Authorizations” means any license, permit, order, approval,
filing, waiver, exemption, variance, clearance, entitlement, allowance,
franchise, or other authorization from or by a Governmental Authority.

“Governmental Requirements” means all laws, statutes, ordinances, rules,
regulations, codes, and similar acts or promulgations or other legally
enforceable requirements of any Governmental Authority.

“Hemingway Access Easement Agreement” means the Hemingway Access Easement
Agreement, dated as of approximately even date herewith, entered into by Idaho
Power and PacifiCorp.

“Hemingway Substation” has the meaning given to such term in the recitals.

“Hemingway-Summer Lake Line” means, beginning on the date the Interconnection is
energized, the 500 kV transmission line extending from the Hemingway Substation
to its terminus at the Summer Lake Substation.

“Idaho Power” has the meaning given to such term in the preamble.

“Idaho Power Transmission System” means the transmission facilities owned,
controlled or operated by Idaho Power that are used to transmit electricity to
Idaho Power’s retail and wholesale electric service customers.

“Idaho Power Individually-Owned Hemingway Facilities” has the meaning given to
such term in the recitals.

“Indemnified Party” has the meaning given to such term in Section 14.01(a).

“Indemnifying Party” has the meaning given to such term in Section 14.01(a).

“Interconnection” means the interconnection of the Hemingway Substation with (i)
the Midpoint-Hemingway Line, (ii) the Hemingway-Summer Lake Line, and (iii) the
Hemingway 500/230 kV transformer at the Point of Interconnection, in each case,
as more specifically described in the diagrams set forth in Exhibit G.

 

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“Interconnection Customer” has the meaning given to such term in the applicable
Owner’s OATT.

“Interconnection Owner” has the meaning given to such term in Section 6.03.

“Interrupting Owner” has the meaning given to such term in Section 10.05(c).

“Jointly-Developed Transmission Facilities” has the meaning given to such term
in the recitals.

“JPSA” has the meaning given to such term in the recitals.

“Losses” mean any and all damages and losses, deficiencies, liabilities, taxes,
obligations, penalties, judgments, settlements, claims, payments, fines,
interest, costs and expenses, whether or not resulting from third party claims,
including the costs and expenses of any and all actions and demands,
assessments, judgments, settlements and compromises relating thereto and the
costs and expenses of attorneys’, accountants’, consultants’ and other
professionals’ fees and expenses incurred in the investigation or defense
thereof or the enforcement of rights hereunder and costs and expenses of
remediation (including, in the case of remediation, all expenses and costs
associated with financial assurance); provided, however, that in no event shall
Losses include lost profits or damages and losses excluded under Section 14.08.

 

“Manager” has the meaning given to such term in Section 18.03(a).

“Metering Equipment” means all metering facilities and equipment to be
constructed and installed as part of the Transmission Facilities, as further
described in Exhibit A.

“Midpoint Substation” means the existing substation near Jerome, Idaho owned by
PacifiCorp.

“Midpoint-Hemingway Line” means, beginning on the date the Interconnection is
energized, the 500 kV transmission line extending from the Midpoint Substation
to its terminus at the Hemingway Substation.

“Midpoint-Summer Lake Line” means (i) with respect to the period beginning on
the Execution Date and continuing up to but not including the date the
Interconnection is energized, the existing 500 kV transmission line extending
from the Midpoint Substation to the Summer Lake Substation, and (ii) with
respect to the period beginning on the date the Interconnection is energized
through the Term, the Midpoint-Hemingway Line and the Hemingway-Summer Lake
Line.

“Monthly Common Facilities Charge” has the meaning set forth in Exhibit F.

“Monthly Transmission Facilities O&M Charge” has the meaning set forth in
Exhibit F.

“NERC” means the North American Electric Reliability Council.

“Non-Defaulting Owner” means an Owner that is not a Defaulting Owner.

 

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“Non-Operating Owner” means PacifiCorp.

“OATT” means, with respect to each Owner, the Owner’s Open Access Transmission
Tariff on file with FERC.

“Operator” means Idaho Power Company, in its capacity as Operator under this
Agreement.

“Other Costs” has the meaning given to such term in Section 5.08(a).

“Other Costs Records” has the meaning given to such term in Section 5.06(b).

“Owner” and “Owners” has the meaning given to such term in the preamble.

“Ownership Interest” means the tenant-in-common undivided ownership interest of
an Owner in the Transmission Facilities which is set forth on Exhibit C, as the
same may be adjusted from time to time pursuant to Exhibit C.

“PacifiCorp” has the meaning given to such term in the preamble.

“PacifiCorp Transmission System” means the transmission facilities owned,
controlled or operated by PacifiCorp that are used to transmit electricity to
PacifiCorp’s retail and wholesale electric service customers.

“Party” means Idaho Power or PacifiCorp individually, and “Parties” means Idaho
Power and PacifiCorp collectively.

“Person” means an individual, partnership, corporation, limited liability
company, joint venture, association, trust, unincorporated organization,
Governmental Authority, or other form of entity.

“Point of Interconnection” means the points of interconnection between the
Transmission Facilities and each of the Owners’ Transmission Systems, as
described in the diagrams set forth in Exhibit G.

“Proprietary Information” has the meaning given to such term in Section 15.06.

“Qualified Owner” means an Owner that has an OATT on file with FERC under which
it is authorized to provide transmission service on its transmission system.

“Reduction Event” has the meaning given to such term in Section 6.02.

“Regulations” has the meaning given to such term in Section 17.02.

“Reliability Standards” means all reliability criteria for system users
established by WECC or such other regional or national standard setting body
with authority to promulgate or set such criteria (including NERC’s reliability
standards), as such criteria may be adopted or modified from time to time.

 

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“Remaining Owner” has the meaning given to such term in Section 9.03.

“Representatives” means, in respect of an Owner or Operator, the directors,
officers, shareholders, partners, members, employees, agents, consultants,
contractors or other representatives of such Owner or Operator.

“Rights-of-Way” means all rights-of-way, easements and other interests
(including fee interests) in real property on which the Transmission Facilities
are or will be constructed that are owned by Idaho Power or its Affiliates.

“Summer Lake Substation” means the existing substation near Summer Lake, Oregon
owned by PacifiCorp.

“Tap Line Upgrades” has the meaning given to such term in Section 7.01(f).

“Tax Indemnifying Party” has the meaning given to such term in Section 17.04.

“Tax Indemnitee Party” has the meaning given to such term in Section 17.04.

“Taxes” has the meaning given to such term in Section 17.03.

“Term” has the meaning given to such term in Section 2.03.

“Transferee” has the meaning given to such term in Section 15.01.

“Transferor” has the meaning given to such term in Section 15.01.

“Transferred Transmission Facilities” has the meaning given to such term in the
recitals.

“Transmission Facilities” has the meaning given to such term in the recitals.

“Transmission Facilities Contracts” means (i) the “Hemingway Substation
Facilities Contracts” as defined in the JSPA, (ii) the Right-of-Way Grant
IDI-36034 from the United States Department of Interior, Bureau of Land
Management to Idaho Power, dated as of June 4, 2009, with respect to portions of
the Hemingway Substation site, and (iii) each agreement, instrument or other
contract relating to or in connection with the Transmission Facilities that the
Operator enters into pursuant to this Agreement.

 

“Transmission System” means, in the case of Idaho Power, the Idaho Power
Transmission System, and, in the case of PacifiCorp, the PacifiCorp Transmission
System.

“Unauthorized Use” means the unauthorized use of the generation or transmission
facilities of any other Person.

“WECC” means the Western Electricity Coordinating Council or any successor
thereto.

“WIS Agreement” has the meaning given to such term in Section 14.08(b).

 

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1.02     Rules of Construction.    The following rules of interpretation shall
apply in this Agreement:

(a)                The masculine shall include the feminine and neuter.

(b)               References to “Articles,” “Sections” and “Exhibits” shall be
to articles, sections and exhibits of this Agreement.

(c)                The Exhibits attached hereto are incorporated in and are
intended to be a part of this Agreement.

(d)               This Agreement was negotiated and prepared by both Parties
with the advice and participation of counsel.  The Parties have agreed to the
wording of this Agreement and none of the provisions hereof shall be construed
against one Party on the ground that such Party is the author of this Agreement
or any part hereof.

(e)                Each reference in this Agreement to any agreement or document
or a portion or provision thereof shall be construed as a reference to the
relevant agreement or document as amended, supplemented or otherwise modified
from time to time with the written approval of both the Parties.

(f)                Each reference in this Agreement to Governmental Requirements
and to terms defined in, and other provisions of, Governmental Requirements
shall be references to the same (or a successor to the same) as amended,
supplemented or otherwise modified from time to time.

(g)               The term “day” shall mean a calendar day, the term “month”
shall mean a calendar month, and the term “year” shall mean a calendar year. 
Whenever an event is to be performed, a period commences or ends, or a payment
is to be made on or by a particular date and the date in question falls on a day
which is not a Business Day, the event shall be performed, or the payment shall
be made, on the next succeeding Business Day; provided, however, that all
calculations shall be made regardless of whether any given day is a Business Day
and whether or not any given period ends on a Business Day.

(h)               Each reference in this Agreement to a Person includes its
successors and permitted assigns; and each reference to a Governmental Authority
includes any Governmental Authority succeeding to its functions and capacities.

(i)         In this Agreement, the words “include,” “includes” and “including”
are to be construed as being at all times followed by the words “without
limitation.”

(j)         The words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall, unless otherwise specified, refer to
this Agreement as a whole and not to any particular provision of this Agreement.

ARTICLE II
TERM

2.01     Effectiveness of this Agreement.  This Agreement shall become effective
upon the Execution Date.

 

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2.02     FERC Filing.  Within five (5) Business Days after the Execution Date,
the Operator, on behalf of the Owners, shall file this Agreement with FERC as a
“Rate Schedule” within the meaning of Part 35 of FERC’s regulations.  Each of
the Owners shall support this Agreement in its current form at FERC when filed. 
Each Owner shall reasonably cooperate with the Operator with respect to
obtaining FERC approval of such FERC filing and provide any information,
including testimony, reasonably required by the Operator to comply with the
applicable FERC filing requirements.

2.03     Term.  The term of this Agreement (“Term”) shall commence upon the
Execution Date and shall continue in full force and effect until terminated in
accordance with the provisions hereof.

2.04     Termination.  Subject to Section 2.05, this Agreement shall terminate
if one or more of the following events occur:

(a)        the Transmission Facilities are damaged and destroyed and the Owners
decide not to repair or rebuild (or cannot reach agreement to repair or rebuild)
the Damaged Facilities in accordance with Article VIII;

(b)        the Transmission Facilities are retired and decommissioned in
accordance with Article IX;

(c)        all of the Ownership Interests in the Transmission Facilities are
owned by only one Owner;

(d)       by mutual written agreement of the Owners; or

(e)        this Agreement is terminated by exercise of remedies pursuant to
Section 12.03.

2.05     Effect of Termination.

(a)        If this Agreement is terminated pursuant to Section 2.04, then,
except as for those provisions that are expressly intended to survive
termination and, subject to Section 2.05(b) and receipt of any necessary
Governmental Authorizations required by applicable Governmental Requirements,
this Agreement shall terminate and become void and of no further force and
effect, without further action by either Party, provided that neither Party
shall be relieved from any of its obligations or liabilities hereunder accruing
prior thereto.

(b)        In the event that this Agreement is terminated pursuant to Section
2.04 and the Non-Operating Owner continues to own all or a portion of the
Ownership Interests in the Transmission Facilities, then:  (i) the Operator
shall, upon written notice from the Non-Operating Owner delivered to the
Operator no later than fifteen (15) Business Days after termination of this
Agreement pursuant to Section 2.04, continue to perform such of its obligations
and covenants in Articles VI, VII, VIII, X and XVI as are set forth in the
notice; (ii) such obligations and covenants, together with Articles V, VI, VII,
VIII, XI, X, XII, XIV, XV, XVIII, XIX and XX (to the extent applicable to the
surviving covenants and obligations), shall continue in full force and

 

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effect notwithstanding the termination of this Agreement; and (iii) the Parties
shall amend this Agreement to reflect such changes to this Agreement as shall be
necessary and mutually acceptable to the Parties to conform this Agreement to
the surviving provisions of this Agreement in accordance with this Section
2.05(b).

 

ARTICLE III
CONSTRUCTION

3.01     Engineering, Design and Construction of the Jointly-Developed
Transmission Facilities.

(a)        The Operator shall design, engineer, procure, construct, install,
manage and perform all other activities necessary for the development,
construction and commissioning  of the Jointly-Developed Transmission Facilities
in accordance with Good Utility Practice and applicable Governmental
Requirements and Governmental Authorizations (the “Construction Project”).

(b)        The Operator shall use Commercially Reasonable Efforts to achieve
each of the milestones by its respective milestone date as set forth in Exhibit
H.  The Operator shall provide the Owners with prompt written notice of the date
upon which it has achieved each milestone.

3.02     Interconnection.  PacifiCorp shall take the Midpoint-Summer Lake Line
out of service for approximately three consecutive weeks during May, 2010 to
enable the Operator to interconnect the Transmission Facilities with the
Midpoint-Summer Lake Line.  The Operator shall submit a request to PacifiCorp
for the specific dates of the outage, the approval of which shall not be
unreasonably withheld by PacifiCorp.  The Owners and the Operator recognize the
need to use Commercially Reasonable Efforts to expedite all work with all due
diligence, consistent with Good Utility Practice, so as to minimize outage
times.

3.03     Rights-of-Way.  The Operator shall maintain the Rights-of-Way in
accordance with Good Utility Practice and applicable Governmental Requirements
and Governmental Authorizations and without adverse distinction between the
Owners.

3.04     Monthly Reports.  Each month prior to the final completion and
commissioning of the Transmission Facilities, the Operator shall prepare and
deliver to the Owners reasonably detailed status reports, in form and substance
reasonably acceptable to the Owners, regarding the implementation of the
Construction Project, including (i) any expected delays (and their duration) in
achieving any milestone by the respective milestone date as set forth on Exhibit
H and (ii) the aggregate amount of Construction Costs incurred to date compared
to the budgeted amount of Construction Costs set forth in the Construction
Budget.

3.05     Development and Construction Costs.

(a)        Each Owner shall be responsible for, and shall pay, in accordance
with this Section 3.05, its pro rata share (based on its Ownership Interest) of
all Costs (up to the Construction Costs Cap) actually incurred by or on behalf
of the Operator in the performance of

 

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the Construction Project pursuant to Article III or otherwise incurred by or on
behalf of Idaho Power in the construction of the Transmission Facilities
(collectively, the “Construction Costs”).

(b)        The Operator shall promptly notify the Owners in writing if it
reasonably believes that the total Construction Costs to be incurred by or on
behalf of the Operator or otherwise incurred by or on behalf of Idaho Power in
the construction of the Transmission Facilities will exceed the greater of (i)
five percent (5%) of the aggregate amount of Construction Costs provided for in
the budget attached hereto as Exhibit E (the “Construction Budget”), as the same
may be revised from time to time pursuant to this Section 3.05(b), and (ii) One
Million Four Hundred Thousand Dollars ($1,400,000) (the “Construction Costs
Cap”).  Thereafter, the Operator shall submit to the Owners for their approval,
such approval not to be unreasonably withheld or delayed, a revised Construction
Budget which shows the aggregate amount of Construction Costs that the Operator
reasonably believes will be incurred by or on behalf of the Operator to complete
the Construction Project in accordance with Article III or otherwise incurred by
or on behalf of Idaho Power in the construction of the Transmission Facilities. 
The notice and approval rights set forth above in this Section 3.05(b) shall
apply to the revised Construction Budget as well.  Notwithstanding anything to
the contrary contained in this Agreement, in no event shall the Operator be
obligated to incur Construction Costs in excess of the Construction Costs Cap.

(c)        The Operator shall provide the Owners with invoices showing each
Owner’s pro rata share (based on its Ownership Interest) of the Construction
Costs, and the Non-Operating Owner shall pay the Operator its pro rata share
(based on its Ownership Interests) of the Construction Costs, in accordance with
Section 5.08 and Section 5.09.

ARTICLE IV
OWNERSHIP INTERESTS

4.01     Ownership Interests.

(a)        Pursuant to the JPSA, as of the Closing Date, each Owner owns an
undivided ownership interest, equal to its Ownership Interest, in the
Transmission Facilities.

(b)        The Owners agree that they shall enter into such additional
documentation as shall reasonably be required to document any change in the
Ownership Interests of the Owners contemplated hereby, provided that in no event
shall an Owner be responsible for paying any amount to the other Owner as a
result of any change in any Ownership Interest or the Transmission Facilities
except as expressly provided for in this Agreement or as otherwise agreed to by
the Parties in writing.

4.02     Owner’s Capacity Share.  Each of the Owners shall be entitled to a pro
rata share (based on its Ownership Interest) of the bi-directional transmission
capacity of the Transmission Facilities (“Capacity Share”).  Subject to Section
6.02, each Owner’s Capacity Share entitles the Owner to provide and schedule
transmission service over the Transmission Facilities to the extent of the
Owner’s Capacity Share and to schedule and transmit an amount of energy
commensurate with the Owner’s Capacity Share over the Transmission Facilities on
its own behalf or on behalf of the Owner’s transmission customers; provided,
however, that at no time

 

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shall an Owner be entitled to post, sell, schedule or transmit more than its
Capacity Share of transmission capacity (and a commensurate amount of energy) on
the Transmission Facilities, unless otherwise mutually agreed to in writing by
the Owners.  Any use of the Transmission Facilities, other than as provided for
in this Section 4.02, shall be subject to the prior written approval of both
Owners.

4.03     Qualified Owner.  Each Owner shall take all actions required to
continue to be a Qualified Owner during the Term.  If at any time during the
Term an Owner ceases to be a Qualified Owner, then such Owner shall immediately
provide notice thereof to the other Owner and take all actions required to
resume being a Qualified Owner.

4.04     No Right to Use.  For the avoidance of doubt, the provisions of this
Agreement shall not confer upon either Owner the right to use or transmit energy
over any transmission facilities owned by the other Owner (other than the
Transmission Facilities as provided for herein).

4.05     Payments.  All payments required to be made by or on behalf of the
Owners under the terms of this Agreement, including payments to the Operator of
the Monthly Transmission Facilities O&M Charge, the Monthly Common Facilities
Charge and Other Costs, shall be made to the account or accounts designated by
the Owner or Operator to which the payment is owed, by wire transfer (in
immediately available funds in the lawful currency of the United States).

4.06     Waiver of Partition Rights.    The Owners shall own their undivided
Ownership Interests in the Transmission Facilities as tenants-in-common.  The
Owners acknowledge that any exercise of the remedy of partition (whether at law
or in equity) of the Transmission Facilities or any portion thereof would be
impracticable in view of the purposes and requirements of this Agreement, would
violate the spirit and intent of this Agreement, and would defeat the Owners’
intentions and reasonable expectations as well as the consideration upon which
each Owner entered into this Agreement.  Accordingly, each Owner agrees that
during the Term it (a) will not, directly or indirectly, commence, maintain,
support or join in any action or proceedings of any kind to partition the
Transmission Facilities or any portion thereof, and (b) waives, after
consultation with its qualified legal counsel, any and all rights that it may
have under this Agreement or applicable Governmental Requirements (whether at
law or in equity) or otherwise to commence, maintain, support or join in any
such action or proceeding.  Each Owner acknowledges that the other Owner has
entered into and will perform the terms of this Agreement in reliance upon the
other Owner’s agreement and adherence to the terms of this Section 4.06, and
would not have entered into this Agreement but for such reliance; and that it
would be unjust and inequitable for any Owner to violate or to seek relief from
any provision of this Section 4.06.

ARTICLE V
OPERATOR

5.01     Appointment of Operator.

(a)        The Owners hereby appoint Idaho Power, and Idaho Power hereby accepts
appointment, to serve as Operator of the Transmission Facilities and the Common
Facilities for

 

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the Owners and to perform the other covenants and obligations of the Operator
expressly set forth in this Agreement, in accordance with the terms and
conditions of this Agreement.

(b)        Notwithstanding anything to the contrary contained in this Agreement
or Governmental Requirements, the Owners agree that the Operator shall have no
obligations, responsibilities or duties to the Owners other than as are
expressly provided for in this Agreement.

5.02     Authority of Operator.

(a)        The Operator shall be responsible in all respects for the
construction of the Jointly-Developed Transmission Facilities and the operation
and maintenance of the Transmission Facilities and the Common Facilities in
accordance with Article III and Articles V-X.  Without limiting the foregoing,
the Operator shall supervise and perform, or cause to be supervised and
performed:  (i) the construction of the Jointly-Developed Transmission
Facilities in accordance with Article III and this Article V, (ii) the physical
operation and maintenance of, interconnection to, design of, capital upgrades
and improvements to, repair and reconstruction of, and retirement and
decommissioning of, the Transmission Facilities in accordance with this Article
V and Articles VI-X, and (iii) the physical operation and maintenance of the
Common Facilities in accordance with Section 6.04.  In the performance of its
obligations under this Agreement, the Operator shall have authority, subject to
the other terms of this Article V and Article III and Articles VI-X, to take any
or all of the actions it reasonably determines are necessary to perform its
obligations under this Agreement, including to make decisions on all matters
relating to and to contract for, select and purchase on behalf of the Owners all
materials, equipment and services (including from third-party consultants and
advisors) necessary for:  (A) the engineering, design and construction of the
Jointly-Developed Transmission Facilities pursuant to Article III, (B) the
physical operation and maintenance of the Transmission Facilities pursuant to
Article VI; (C) the interconnection of Interconnection Customers to the
Transmission Facilities pursuant to Section 6.03; (D) the development, design,
engineering, procurement, construction, permitting, completion, testing and
commissioning of capital upgrades or improvements to the Transmission Facilities
pursuant to Article VII; (E) the development, design, engineering, procurement,
construction, permitting, completion, testing and commissioning of repairs to
and reconstruction of the Transmission Facilities pursuant to Article VIII; and
(F) the retirement and decommissioning of the Transmission Facilities pursuant
to Article IX.

(b)        The Owners and the Operator agree that title to all Jointly-Developed
Transmission Facilities and capital upgrades and improvements constructed by or
on behalf of the Operator pursuant to Section 6.01 shall vest with the Owners
and shall be jointly owned by the Owners as tenants-in-common in accordance with
their respective Ownership Interests.  Title to all capital upgrades and
improvements constructed by or on behalf of the Operator pursuant to Section
7.01 shall vest with and be owned by the Owners in accordance with Section 7.01.

 

(c)        The Operator will exercise or enforce all of Idaho Power's benefits,
rights and remedies under the Transmission Facilities Contracts for the benefit
of the Owners pro rata (in accordance with their respective Ownership Interests)
and without adverse distinction between the Owners.  In furtherance and not in
limitation of the immediately preceding sentence,

 

 

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the Operator agrees to transfer, assign, distribute, pay over or otherwise make
available to the Non-Operating Owner, the Non-Operating Owner’s pro rata share
(based on its Ownership Interest) in any payments or proceeds obtained pursuant
to any Transmission Facilities Contract.  Notwithstanding anything to the
contrary contained in this Agreement, the Owners agree that only the Operator
shall be entitled to exercise or enforce Idaho Power’s benefits, rights and
remedies under the Transmission Facilities Contracts.

5.03     Standard of Work.  The Operator shall perform all of its obligations
under this Agreement as an independent contractor and in accordance with Good
Utility Practice and applicable Governmental Requirements and Governmental
Authorizations and without adverse distinction between the Owners.

5.04     Delegation of Responsibilities.  The Operator may, in its sole and
absolute discretion, delegate all or a portion of its obligations under this
Agreement to one or more Persons (each, a “Delegate”).  Notwithstanding any such
delegation, the Operator shall remain responsible and liable for all such
delegated obligations in accordance with the terms of this Agreement.

5.05     Governmental Authorizations.

 

(a)                The Operator is authorized to prepare and submit to all
appropriate Governmental Authorities the necessary reports, applications, plans,
specifications and other documents to procure all Governmental Authorizations
required to perform its obligations under this Agreement with respect to the
Transmission Facilities or to comply with Governmental Requirements, provided
that the Operator shall consult with the Owners prior to the submission of any
such reports, application, plans, specification and other documents.  To the
extent permitted by Governmental Requirements, the Operator shall use
Commercially Reasonable Efforts to obtain and structure all Government
Authorizations for which it applies after the Execution Date in such a way as to
recognize each Owner’s applicable Ownership Interests and Capacity Share as
contemplated by this Agreement.  Notwithstanding anything to the contrary in
this Agreement, nothing in Section 5.05 shall obligate the Operator to prepare
and submit to appropriate Governmental Authorities any reports, applications,
plans, specifications and other documents to procure any Governmental
Authorizations required by the Owners in connection with their ownership of an
Ownership Interest in the Transmission Facilities or the recovery of any costs
and expenses in connection therewith.

(b)               To the extent that the Operator cannot obtain a Governmental
Authorization pursuant to Section 5.05(a) on behalf of one or both of the
Owners, each such Owner shall:  (i) be responsible for preparing and submitting
to the appropriate Governmental Authority the necessary reports, applications,
plans, specifications and other documents to procure such Governmental
Authorization; and (ii) exercise all Commercially Reasonable Efforts to obtain
such Governmental Authorization.  Unless and until the Owner or Owners are able
to obtain such Governmental Authorizations, the Operator shall not perform or
continue to perform any of the Construction Project if to do so would result in
the Owner or Owners being in violation of applicable Governmental Requirements
or Governmental Authorizations.

 

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(c)                Each Owner shall, at its own cost: (i) reasonably cooperate
and support the Operator in obtaining any Governmental Authorizations required
pursuant to Section 5.05(a); and (ii) reasonably respond to inquiries or
requests issued to it by any Governmental Authority in respect of such
Governmental Authorization; provided, however, that an Owner shall not be
obligated pursuant to this Section 5.05(c) to disclose Proprietary Information
except to the extent that it is otherwise required to disclose such Proprietary
Information:  (A) by applicable Governmental Requirements; (B) by any
Governmental Authority; or (C) pursuant to the express terms of this Agreement.

5.06     Access.

(a)        The Operator shall, to the extent possible under any Rights-of-Ways,
provide each Owner and its designees reasonable access to the Transmission
Facilities site to permit the Owners and their designees to inspect the
construction, commissioning, operation and maintenance, capital upgrades and
improvements to, repair and reconstruction of, and retirement and
decommissioning of the Transmission Facilities, provided that (i) the Owners and
their designees do not interfere with the construction, commissioning, operation
and maintenance, capital upgrades and improvements to, repair and reconstruction
of, and retirement and decommissioning of the Transmission Facilities or any
portion thereof or pose a safety hazard; (ii) the Owners and their designees
comply with any requirements of any rights-of-ways, license, easement or other
real property interest agreement applicable to the Transmission Facilities; and
(iii) the Owners and their designees performing the inspection comply with the
Operator’s or any other contractor’s safety and security rules, as more
specifically set out in the Hemingway Access Easement Agreement.

 

(b)        Each Owner may, at its cost, at any time during normal business hours
and with reasonable prior notice of not less than ten (10) Business Days, but
not more often than once in any twelve (12) month period, inspect and audit the
books and records of the Operator and any of its Affiliates and any Delegate
(and the Operator shall secure such rights for the Owners from its Affiliates
and any Delegate) involved in the provision of services pursuant to this
Agreement (“Other Costs Records”), to the extent reasonably relating to the
determination of the Other Costs for which the Owners are liable under this
Agreement as shown on an invoice provided to the Owners pursuant to Section 5.08
within twelve (12) months prior to the date of the audit notice.  The Operator
shall, and shall cause any of its relevant Affiliates and any Delegate, to keep
and maintain all such Other Costs Records to the extent reasonably relating to
the determination of the Other Costs for which the Owners are liable under this
Agreement and make such Other Costs Records available to the Owners in
accordance with the terms of this Agreement.  If any audit discloses that,
during such twelve (12)-month period, an overpayment or underpayment of Other
Costs has been made by the Non-Operating Owner or the amount of any Other Costs
allocated to the Owners on an invoice is incorrect, then such overpayment,
underpayment or incorrect amount shall be resolved pursuant to Section 5.09. 
The Owner requesting the audit shall reimburse one hundred percent (100%) of all
reasonable costs and expenses (including internal costs and expenses) incurred
by or on behalf of the Operator and any of its Affiliates and any Delegate in
complying with the provisions of this Section 5.06(b), provided that the Owner
shall not be required to reimburse any such costs if the audit determines that
the Owner has made more than Twenty-Five Thousand Dollars ($25,000) in
overpayments

 

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of Other Costs or more than Twenty-Five Thousand Dollars ($25,000) in Other
Costs have been incorrectly allocated to the Owner.

5.07     Insurance.

 

 

(a)        Owner Insurance.  Each of the Owners shall be responsible for
obtaining and maintaining during the Term insurance covering their respective
legal liabilities related to their Ownership Interest in the Transmission
Facilities.  Insurance required by this Section 5.07(a) will be placed with
appropriate carriers and in amounts in accordance with Good Utility Practice and
any applicable Governmental Requirements.

 

(b)        Property Insurance.

 

(i)         The Operator, on behalf of the Owners and any other named insureds
or loss payees, will:  (A) determine the appropriate property insurance
coverages, minimum amounts, self-insured amounts, deductibles and other
insurance policy terms; (B) obtain and maintain such property insurance during
the Term; and (C) be solely responsible for pursuing claims and/or negotiating
settlements in respect of claims under such insurance coverages.  The Operator
shall be compensated for the costs of obtaining and maintaining such insurance
(including any premiums, taxes, and fees, deductibles, self-insurance or
non-insured costs) through the Monthly Transmission Facilities O&M Charge.

 

(ii)        Physical damage to substations and equipment therein that is
included as part of the Transmission Facilities in types and amounts that are
reasonable and customary for similarly situated utilities.  Coverage may be
insured or self-insured, or any combination of insured and self-insured.

 

(iii)       Insurance for physical damage to the transmission line and any
related equipment outside the boundaries of any substation and included as part
of the Transmission Facilities shall be fully self-insured.

 

5.08     Invoices.

(a)        The Non-Operating Owner shall pay the Operator the Monthly
Transmission Facilities O&M Charge and the Monthly Common Facilities Charge
calculated in accordance with Exhibit F as compensation for the Operator’s
services under this Agreement.  Each Owner shall be responsible for its pro rata
share (based on its Ownership Interest, unless the Owners have agreed in writing
otherwise or this Agreement specifies otherwise) of costs incurred by or on
behalf of the Operator under Sections 3.05(a), 6.01(c), 7.01(b), 7.01(f), 8.01,
8.05(b), 9.02 and 17.03 (the “Other Costs”).  In the event that the Operator
incurs, or reasonably expects to incur, significant Other Costs (other than
Construction Costs) in excess of One Hundred Thousand Dollars ($100,000), it
shall immediately notify the Owners in writing of such Other Costs.

(b)        Not later than thirty (30) days after the end of each month during
the Term, the Operator will deliver to the Owners an invoice which will show the
Monthly

 

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Transmission Facilities O&M Charge and Monthly Common Facilities Charge payable
by the Non-Operating Owner and each Owner’s pro rata share (based on its
Ownership Interest, unless the Owners have agreed in writing otherwise) of Other
Costs.  The Non-Operating Owner shall pay the Monthly Transmission Facilities
O&M Charge, the Monthly Common Facilities Charge, and its pro rata share (based
on its Ownership Interest, unless the Owners have agreed in writing otherwise)
of Other Costs shown on the invoice no later than thirty (30) days after the
date of the invoice.  Any payment past due will accrue interest, per annum,
calculated in accordance with the methodology specified for interest in the FERC
regulations at 18 C.F.R. § 35.19a(a)(2)(iii) (the “FERC Methodology”).  The
failure by the Operator to timely deliver an invoice shall not relieve
PacifiCorp of its payment obligation in respect of the Monthly Transmission
Facilities O&M Charge, Monthly Common Facilities Charge and Other Costs as shown
on such invoice, or release Idaho Power of its responsibility for its share of
the Other Costs in such invoice.
 

5.09     Disputed Amounts.  If the Non-Operating Owner disputes any portion of
any amount specified in an invoice delivered by the Operator pursuant to Section
5.08, the Non-Operating Owner shall pay its total amount of the invoice when
due, and, if actually known at the time by the Non-Operating Owner, identify the
disputed amount and state that the disputed amount is being paid under protest. 
Any disputed amount shall be resolved pursuant to the provisions of Article
XVIII.  If it is determined pursuant to Article XVIII that an overpayment or
underpayment has been made by the Non-Operating Owner or the amount of any Other
Costs allocated to the Owners on an invoice is incorrect, then (i) in the case
of any overpayment by the Non-Operating Owner, the Operator shall promptly
return the amount of the overpayment (or credit the amount of the overpayment on
the next invoice) to the Non-Operating Owner, (ii) in the case of an
underpayment by the Non-Operating Owner, the Non-Operating Owner shall promptly
pay the amount of the underpayment to the Operator (for the benefit of the other
Owner), and (iii) in the case of an incorrect allocation of Other Costs to an
Owner, the allocations of Other Costs on the next invoice shall be adjusted to
correct for such incorrect allocation, in each case, together with interest for
the period from the date of overpayment, underpayment, or incorrect allocation,
until such amount has been paid or credited against a future invoice calculated
in the manner prescribed for calculating interest on refunds under the FERC
Methodology.

5.10     Assistance.  Each Owner shall cooperate with the Operator promptly, as
and when reasonably requested by the Operator, to assist the Operator in the
performance of its duties, responsibilities and obligations under this
Agreement, including executing and delivering from time to time such additional
documents, certificates or instruments, and taking such additional actions, as
may be reasonably requested by the Operator.  Each Owner shall bear its own
costs for providing such cooperation and assistance as requested by the Operator
unless the Owners agree otherwise in writing.  Nothing in this Agreement shall
preclude an Owner from exercising any rights expressly granted it under this
Agreement or taking any action (or having its Affiliates take any action) with
respect to any other transmission project, including any such project that may
compete with the Transmission Facilities.

 

 

 

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5.11     Remedies.

(a)        Notwithstanding any provision to the contrary contained in this
Agreement, the Operator shall have no liability to the Non-Operating Owner in
connection with the performance of its covenants and obligations under this
Agreement, except as provided in this Section 5.11 and Section 14.01(c).  The
Non-Operating Owner agrees that it has a duty to mitigate any damages and shall
use Commercially Reasonable Efforts to minimize any damages it may incur as a
result of the Operator’s failure to perform or breach of any of its covenants or
obligations under this Agreement.

(b)        The Owners and Operator acknowledge that the obligations and
covenants performed by the Operator hereunder are unique and that the
Non-Operating Owner will be irreparably injured should such obligations and
covenants not be performed in accordance with the terms and conditions of this
Agreement.  Consequently, the Non-Operating Owner will not have an adequate
remedy at law if the Operator shall fail to perform its obligations and
covenants hereunder.  The Non-Operating Owner shall have the right, in addition
to any other remedy available under this Agreement, to specific performance of
the Operator’s obligations and covenants hereunder, and the Owners and Operator
agree not to take a position in any proceeding arising out of this Agreement to
the effect that the Non-Operating Party has an adequate remedy at law.

ARTICLE VI
OPERATION AND MAINTENANCE; CURTAILMENT;
INTERCONNECTION WITH THIRD PARTIES; COMMON FACILITIES

6.01     Operation and Maintenance; Capital Upgrades and Improvements.

(a)        The Operator shall supervise and perform, or cause to be supervised
and performed, the physical operation and maintenance of the Transmission
Facilities in accordance with Good Utility Practice and applicable Governmental
Requirements and Governmental Authorizations and without adverse distinction
between the Owners.  Subject to Section 5.04, the Operator may utilize its
employees and supervisory personnel, and any independent technical advisors,
consultants, contractors and agents which it may select, as may be required to
perform the Operator’s obligations under this Section 6.01.

(b)        The Operator shall make maintenance renewals and replacements to the
Transmission Facilities (i) the costs of which are recordable as an operation
and maintenance expense under the FERC Uniform System of Accounts; and (ii) that
(A) are necessary for the operation of the Transmission Facilities in accordance
with Good Utility Practice, and/or (B) are required by applicable Governmental
Requirements and Governmental Authorizations.  Such maintenance renewals and
replacements to the Transmission Facilities are included in the services for
which the Operator is compensated by the Monthly Transmission Facilities O&M
Charge.  The Operator shall not separately invoice the Owners for the costs of
such maintenance renewals and replacements to the Transmission Facilities. 
Notwithstanding anything to the contrary contained in this Agreement, any
maintenance renewals and replacements made pursuant to this Section 6.01(b)
shall be Transmission Facilities for purposes of this Agreement.

 

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(c)        The Operator shall make capital upgrades and improvements to the
Transmission Facilities (i) the costs of which are recordable as capital
expenditures under the FERC Uniform System of Accounts, and (ii) which (A) are
necessary for the operation of the Transmission Facilities in accordance with
Good Utility Practice and/or (B) are required by applicable Governmental
Requirements and Governmental Authorizations.  The Operator shall consult with
the Owners and receive their prior approval, such approval not to be
unreasonably withheld, delayed or conditioned, with respect to any capital
upgrade or improvement for which the Operator reasonably expects to incur total
project costs that exceed Two Hundred Fifty Thousand Dollars ($250,000).  The
Owners shall be responsible for their pro rata share (based on their Ownership
Interests) of any Costs incurred by or on behalf of the Operator in making such
capital upgrades or improvements.  Notwithstanding anything to the contrary
contained in this Agreement, any capital upgrades and improvements made pursuant
to this Section 6.01(c) shall be Transmission Facilities for purposes of this
Agreement.

6.02     Curtailment.  The Operator shall notify the Owners as soon as
reasonably practicable upon becoming aware of any planned or unplanned event or
circumstance, including an emergency condition or a rating study to comply with
applicable Governmental Requirements or Reliability Standards, which physically
or otherwise reduces or may reduce the amount of transmission capacity on all or
a portion of the Transmission Facilities (“Reduction Event”), including the
aggregate amount of reduction in the transmission capacity of the Transmission
Facilities to the extent known by the Operator.  In the event of a Reduction
Event, the Operator shall take such actions as the Operator may reasonably deem
prudent and necessary to terminate the Reduction Event and to preserve and
maintain the reliability, safety, integrity and operability of the applicable
Transmission Facilities and to protect the health and safety of the public. 
Each of the Owners shall provide notice of each Reduction Event in accordance
with its respective OATT.

6.03     Interconnection with Third Parties.  The Owners acknowledge and agree
that all third-party Interconnection Customer requests for interconnection to
any of the Transmission Facilities must be coordinated with the Operator and
processed in a manner consistent with the Owner’s OATT to which the
Interconnection Customer’s request was made (“Interconnection Owner”).  An
Interconnection Owner in receipt of a third-party Interconnection Customer
request for interconnection with the Transmission Facilities will promptly
notify the Operator and thereafter the Owners and the Operator will coordinate
and cooperate to process the interconnection request.  The Operator will
coordinate the conduct of any studies required to determine the impact of the
interconnection request on the Transmission Facilities and the Affected Systems
with Affected System Operators, including the Owners, in accordance with the
Interconnection Owner’s OATT.  The Operator will include the Owners and such
Affected System Operators in all meetings held with Interconnection Customers as
required by the Interconnection Owner’s OATT.

6.04     Common Facilities.  The Operator shall make the Common Facilities
available to the Owners to support the operation of the Transmission Facilities
in accordance with the terms of this Agreement and without adverse distinction
between the Owners.  The Operator shall supervise and perform, or cause to be
supervised and performed, the physical operation and maintenance of the Common
Facilities in accordance with Good Utility Practice and applicable Governmental
Requirements and Governmental Authorizations and without adverse distinction

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between the Owners.  Subject to Section 5.04, the Operator may utilize its
employees and supervisory personnel, and any independent technical advisors,
consultants, contractors and agents which it may select, as may be required to
perform the Operator’s obligations under this Section 6.04.  The obligations
performed by the Operator pursuant to this Section 6.04 are included in the
services for which the Operator is compensated by the Monthly Common Facilities
Charge, and the Operator shall not separately invoice the Owners and the Owners
shall not be liable for any of the costs or expenses incurred by or on behalf of
the Operator pursuant to this Section 6.04.
 

ARTICLE VII
CAPITAL UPGRADES PROPOSED BY AN OWNER

7.01     Capital Upgrades.

(a)        At any time during the Term, an Owner (“Electing Owner”) may elect to
make a capital upgrade or improvement to the Transmission Facilities, provided
that in no event shall an Electing Owner be entitled to make a capital upgrade
or improvement to the Transmission Facilities that reasonably would be expected
to have a material adverse effect on the other Owner’s ownership, use or
enjoyment of its Ownership Interest of the Transmission Facilities (and
associated Capacity Share) as contemplated in this Agreement.  An Electing Owner
shall provide the other Owner no less than sixty (60) days’ prior written notice
of its election, together with reasonable details about the proposed upgrade or
improvement (each, a “Capital Upgrade Notice”).  Within sixty (60) days of
receipt of the Capital Upgrade Notice, the other Owner may notify the Electing
Owner in writing that it elects to participate in the capital upgrade or
improvement to the Transmission Facilities.

(i)         If the other Owner delivers notice to the Electing Owner within the
sixty (60) day period that it elects to participate in the capital upgrade or
improvement to the Transmission Facilities, then the Owners shall meet and agree
on: (A) the final scope of the capital upgrade or improvement; (B) the
allocation of increased transmission capacity, if any, associated with such
capital upgrade and improvement between the Owners, including any change in the
Owners’ Capacity Shares; (C) any change in each Owner’s Ownership Interest; (D)
each Owner’s share of the costs of such upgrade or improvement; (E) any change
in the Monthly Transmission Facilities O&M Charge; and (F) such other matters as
the Owners may agree upon, all of which shall be memorialized in an amendment to
this Agreement executed by the Owners, including any amendments to the Exhibits
hereto (the “Amendment”); provided, however, that any failure of the Owners to
agree on any of the matters specified in subparts (A) through (F) above shall be
resolved pursuant to the provisions of Article XVIII.  Notwithstanding any
provisions to the contrary in this Agreement, an Owner shall not be prohibited
from making a capital upgrade or improvement to the Transmission Facilities
pursuant to this Section 7.01(a) because the Owners fail to agree on any of the
matters specified in subparts (A) through (F) of the immediately preceding
sentence, and any such disagreement shall be resolved pursuant to Article XVIII.

(ii)        If the other Owner elects not to participate in the capital upgrade
or improvement to the Transmission Facilities (or fails to deliver a notice to
the Electing Owner within the sixty (60) day period), then the Electing Owner
may proceed with the capital upgrade

 

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or improvement, provided that the Electing Owner shall coordinate with the
Operator on the final scope of the capital upgrade or improvement.
 

(b)        The Operator shall design, permit, construct, install and commission
any upgrades or improvements to the Transmission Facilities provided for in
Section 7.01(a)(i) in accordance with the Amendment or, if applicable, any
resolution pursuant to Article XVIII, and otherwise in accordance with Good
Utility Practice and applicable Governmental Requirements and Governmental
Authorizations.  The Owners shall be responsible, based on the Amendment or, if
applicable, any resolution pursuant to Article XVIII, for all of the Costs
incurred by or on behalf of the Operator in connection with such capital upgrade
or improvement to the Transmission Facilities.  Effective as of the date of
successful commissioning of such capital upgrade or improvement, written notice
of which the Operator shall provide to the Owners, the Owners’ Ownership
Interests and Capacity Shares shall be adjusted, if at all, in accordance with
the Amendment or, if applicable, any resolution pursuant to Article XVIII, and
the Owners shall memorialize any revised Ownership Interests in a revised
Exhibit C which shall be effective as of the date of successful commissioning of
such upgrade or improvement.  Notwithstanding anything to the contrary contained
in this Agreement, any capital upgrades or improvements provided for in this
Section 7.01(b) shall be Transmission Facilities for purposes of this Agreement.

(c)        The Operator shall design, permit, construct, install and commission
any upgrades or improvements to the Transmission Facilities provided for in
Section 7.01(a)(ii) in accordance with the final scope of the capital upgrade or
improvement established by the Electing Owner pursuant to Section 7.01(a)(ii),
and otherwise in accordance with Good Utility Practice and applicable
Governmental Requirements and Governmental Authorizations.  The Electing Owner
shall be responsible for all of the Costs incurred by or on behalf of the
Operator in connection with such capital upgrade or improvement to the
Transmission Facilities and title to such capital upgrades or improvement shall
vest solely with the Electing Owner.  Effective as of the date of successful
commissioning of such capital upgrade or improvement, written notice of which
the Operator shall provide to the Owners, (i) the Owners’ Ownership Interests
shall be adjusted, if at all, in accordance with Exhibit C, (ii) the Owners
shall memorialize any revised Ownership Interests in a revised Exhibit C which
shall be effective as of the date of successful commissioning of such upgrade or
improvement, and (iii) the Operator shall operate and maintain such capital
upgrade or improvement in accordance with Section 6.01(a).  In addition, the
Owners shall meet and agree on: (A) the allocation of increased transmission
capacity, if any, associated with such capital upgrade and improvement between
the Owners, including any change in the Owners’ Capacity Shares; (B) any change
in the Monthly Transmission Facilities O&M Charge; and (C) such other matters as
the Owners may agree upon, all of which shall be memorialized in an amendment to
this Agreement executed by the Owners, including any amendments to the Exhibits
hereto; provided, however, that any failure of the Owners to agree on any of the
matters specified in subparts (A) through (C) above shall be resolved pursuant
to the provisions of Article XVIII.  Notwithstanding anything to the contrary
contained in this Agreement, any capital upgrades or improvements provided for
in this Section 7.01(c) shall not be Transmission Facilities for purposes of
this Agreement.

 

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(d)       Notwithstanding anything to the contrary contained herein, the
provisions of this Section 7.01 shall not apply to capital upgrades or
improvements made by the Operator pursuant to Section 6.01(c) which are
necessary for the operation of the Transmission Facilities in accordance with
Good Utility Practice or required by applicable Governmental Requirements or
Governmental Authorizations, which shall be governed by the provisions of
Section 6.01.

(e)        Each Owner shall provide the Operator prompt written notice of any
request pursuant to its OATT from a third-party customer to provide additional
transmission capacity that will require one or more capital upgrades or
improvements to the Transmission Facilities.  If capital upgrades or
improvements are required in accordance with such Owner’s OATT, then such
capital upgrades and improvements shall be made by the Operator in accordance
with the provisions of Section 7.01(a) and Section 7.01(b).

(f)        The Owners agree that the Tap Line Upgrades to the Transmission
Facilities shall be permitted, constructed, installed and commissioned by the
Operator, provided that the Operator shall delegate such responsibilities to
PacifiCorp pursuant to Section 5.04.  The Operator shall use Commercially
Reasonable Efforts to construct, install and commission the Tap Line Upgrades
during the outage for the Jim Bridger power plant currently scheduled for April,
2011.  The Owners shall each be responsible for fifty percent (50%) of all Costs
incurred by or on behalf of the Operator in connection with the permitting,
construction, installation and commissioning of the Tap Line Upgrades pursuant
to this Section 7.01(f).  The Owners agree that the Tap Line Upgrades shall not
result in a change to the Owners’ Ownership Interests or associated Capacity
Shares or the Monthly Transmission Facilities O&M Charge.  For purposes of this
Section 7.01(f), “Tap Line Upgrades” means the redesign and upgrade of the
interconnection structures connecting the existing 500 kV Midpoint-Summer Lake
Line to the Hemingway Substation, including the two tangent and two dead end
monopole structures, so as to facilitate hot work off the structures as a means
to minimize outages.

ARTICLE VIII
PHYSICAL DAMAGE TO TRANSMISSION FACILITIES; CONDEMNATION

8.01     Rebuilding Damaged Facilities.  If any of the Transmission Facilities
are materially damaged or destroyed (the “Damaged Facilities”), then within
thirty (30) days of the date the damage or destruction occurred, the Operator
shall deliver to the Owners a written notice (the “Damage Notice”) of the
Operator’s good faith reasonable estimate of the cost to repair or rebuild the
Damaged Facilities.  If the Damage Notice indicates that the total project cost
to repair or rebuild the Damaged Facilities is estimated to be Five Million
Dollars ($5,000,000) or more, inclusive of insurance proceeds, then the Owners
will determine whether the Damaged Facilities will be repaired or rebuilt within
thirty (30) days of the date of the Damage Notice.  If the Damage Notice
indicates that the total project cost to repair or rebuild the Damaged
Facilities is estimated to be less than Five Million Dollars ($5,000,000),
inclusive of insurance proceeds, then the Operator will determine whether the
Damaged Facilities will be repaired or rebuilt and provide notice thereof to the
Owners within thirty (30) days of the date of the Damage Notice.  If the Owners
or the Operator determines pursuant to this Section 8.01 to repair or rebuild
the Damaged Facilities, then the Owners will, upon receipt of any insurance
proceeds paid in connection with such Damaged Facilities, apply such proceeds
(up to its pro

 

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 rata share based on its Ownership Interest) to the repair and reconstruction of
the Damaged Facilities which will be carried out by the Operator, provided that
the Operator shall pay pro rata to the Owners (in accordance with their
Ownership Interests) any insurance proceeds received from any property insurance
obtained by the Operator pursuant to Section 5.07(b).  The Operator will be
responsible for obtaining any necessary Governmental Authorizations to repair or
rebuild the Damaged Facilities and determining the manner in which to repair and
reconstruct the Damaged Facilities (including the equipment to be used).  Each
Owner shall reasonably cooperate with and support the Operator in obtaining any
such Governmental Authorizations in accordance with Section 5.05(c).  The
Operator will cause such repairs or reconstruction to be made so that the
Damaged Facilities will be repaired and restored to substantially the same
general condition, character and use as existed prior to such damage or
destruction.  If the cost of such repairs or reconstruction exceeds the
insurance proceeds required to be applied to the repair or reconstruction
pursuant to this Section 8.01, then the Owners shall pay, in accordance with
their applicable Ownership Interests, the shortfall amount.
 

8.02     Decision not to Rebuild.

  If the Owners determine pursuant to Section 8.01 not to repair or rebuild the
Damaged Facilities (or cannot reach agreement to repair or rebuild the Damaged
Facilities) or the Operator determines pursuant to Section 8.01 not to repair or
rebuild the Damaged Facilities, then, in each case, (a) each Owner shall (i) be
entitled to retain any insurance proceeds received pursuant to insurance
maintained by it with respect to the Damaged Facilities, (ii) receive its share
of any revenues from the salvage or sale of the Damaged Facilities and (iii) pay
its pro rata share (based on its Ownership Interest) of any costs of removal of
parts and equipment from the Damaged Facilities, (b) the Operator shall pay pro
rata to the Owners (in accordance with their Ownership Interests) any insurance
proceeds received from any property insurance obtained by the Operator pursuant
to Section 5.07(b), and (c) subject to Section 8.03, this Agreement shall
terminate pursuant to Section 2.04(a).

8.03     Purchase of Ownership Interest.

  If pursuant to Section 8.01 the Owners determine not to repair or rebuild the
Damaged Facilities (or cannot reach agreement to repair or rebuild the Damaged
Facilities) or the Operator determines that the Damaged Facilities should not be
repaired and reconstructed and, in each case, one Owner desires to repair or
rebuild the Damaged Facilities (the “Continuing Owner”), then the Continuing
Owner shall have the option to purchase all of the Ownership Interest (and
Capacity Share) of the other Owner.  In order to exercise its option to purchase
all of the Ownership Interest (and Capacity Share) of the other Owner, the
Continuing Owner must give written notice thereof to the other Owner within
thirty (30) days of the Owners’ or Operator’s determination pursuant to Section
8.01 not to repair or rebuild the Damaged Facilities.  The Owners shall enter
into such documentation as the Continuing Owner shall reasonably request to
document the purchase and sale of all of the Ownership Interest (and Capacity
Share) of the other Owner in the Transmission Facilities, provided that the
purchase price of the Ownership Interest (and Capacity Share) of the other Owner
shall be equal to the other Owner’s pro rata share (based on its Ownership
Interest) of: (a) the salvage value of the Damaged Facilities, and (b) the
depreciated cost of the Transmission Facilities which are not part of the
Damaged Facilities.

8.04     Cooperation.  If the Continuing Owner seeks to repair or rebuild the
Transmission Facilities purchased from the other Owner pursuant to Section 8.03,
then, at the Continuing Owner's request and expense, the other Owner and the
Operator (if the Continuing Owner is not

 

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the Operator) will, for a reasonable period of time, cooperate with and use
Commercially Reasonable Efforts to assist the Continuing Owner in the repair or
rebuilding of the Damaged Facilities.  This Section 8.04 shall survive the
expiration or termination of this Agreement.
 

8.05     Condemnation.  If there occurs a loss of title to, or ownership of, or
use and possession of, all or any portion of any of the Transmission Facilities,
as the result of the exercise of the right of condemnation or eminent domain by
or on behalf of any Governmental Authority, then the Operator will promptly give
notice thereof to the Owners, which notice shall generally describe the nature
and extent of such condemnation or eminent domain proceedings (including any
negotiations in connection with such proceedings).  The Operator shall, in
consultation with the Owners, use Commercially Reasonable Efforts to resist the
loss of title to, or ownership of, or use and possession of, all or any portion
of any of the Transmission Facilities through condemnation or eminent domain. 
If, as a result of condemnation or eminent domain, the Owners shall lose title
to, or ownership of, or use and possession of, all or any portion of any of the
Transmission Facilities, the Owners shall determine, by mutual agreement,
whether:

(a)        the Transmission Facilities are no longer useful for the transmission
of electric power and should be retired and decommissioned, in which case the
provisions of Article IX shall control;

(b)        the Transmission Facilities should be replaced or modified, in which
case the Owners will, upon receipt of any awards paid in connection with such
condemnation or eminent domain, apply such awards to the replacement or
modification of the Transmission Facilities which will be carried out by the
Operator.  The Operator will, consistent with the mutual agreement of the
Owners, determine the manner in which to replace or modify the Transmission
Facilities (including the equipment to be used), and will cause such replacement
and modifications to be made so that the Transmission Facilities are replaced or
modified in accordance with the mutual agreement of the Owners.  If the cost of
replacement or modification of the Transmission Facilities exceeds the awards
received by the Owners in connection with such condemnation or eminent domain,
then the Owners shall pay their pro rata shares (based on their Ownership
Interests) of the shortfall amount; or

(c)        if the Owners do not reach mutual agreement on one of the actions
provided for in paragraphs (a) and (b) above, or on another course of action,
within sixty (60) days after the date of the notice provided by the Operator to
the Owners pursuant to the first sentence of this Section 8.05, then each Owner
shall receive its pro rata share (based on its Ownership Interest) of all awards
received by the Owners (or their Affiliates) in connection with any such
condemnation or eminent domain (less the actual cost, fees and expenses incurred
by the Operator in collection thereof).

ARTICLE IX
RETIREMENT AND DECOMMISSIONING

9.01     Decision to Retire Transmission Facilities.  The Owners will determine
in accordance with the terms of this Article IX when the Transmission Facilities
are no longer useful for the transmission of electric power and should be
retired and decommissioned.  If the

 

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Owners mutually agree to retire and decommission the Transmission Facilities,
then, subject to Section 9.02 and Section 9.03, this Agreement shall terminate
pursuant to Section 2.04(b).

9.02     Costs of Decommissioning.  Each of the Owners shall be responsible for
paying its pro rata share (based on its Ownership Interest) of the aggregate
amount of all costs incurred by or on behalf of the Operator to retire
permanently the Transmission Facilities from service, including decommissioning,
dismantling, demolishing and removal of equipment, facilities and structures,
security, maintenance, disposing of debris, abandonment and all other costs
incurred by or on behalf of the Operator to retire permanently the Transmission
Facilities from service, net of any amounts recovered in connection with the
sale of any retired equipment, facilities and structures.

9.03     Purchase of Ownership Interest.  Each Owner shall give written notice
to the other Owner when it believes the Transmission Facilities should be
retired and decommissioned (each, a “Decommissioning Notice”).  If the other
Owner desires to continue the operation of the Transmission Facilities (the
“Remaining Owner”), then the Remaining Owner shall have the option to purchase
all of the Ownership Interest (and Capacity Share) of the other Owner in the
Transmission Facilities.  In order to exercise its option to purchase all of the
Ownership Interest (and Capacity Share) of the other Owner in the Transmission
Facilities, the Remaining Owner must give written notice thereof to the other
Owner within ninety (90) days of receipt of the other Owner’s Decommissioning
Notice.  The Owners shall enter into such documentation as the Remaining Owner
shall reasonably request to document the purchase and sale of the Ownership
Interest (and Capacity Share) of the other Owner, provided that the purchase
price of the Ownership Interest (and Capacity Share) of the other Owner shall be
equal to the other Owner’s pro rata share (based on its Ownership Interest) of
the depreciated cost of the applicable Transmission Facilities.

9.04     Cooperation.  If the Remaining Owner seeks to purchase and continue the
operation of the Transmission Facilities, then, at the Remaining Owner’s request
and expense, the other Owner and the Operator (if the Remaining Owner is not the
Operator) will, for a reasonable period of time, cooperate with and use
Commercially Reasonable Efforts to assist the Remaining Owner in the continued
operation of the Transmission Facilities.  This Section 9.04 shall survive the
expiration or termination of this Agreement.

ARTICLE X
INTERCONNECTION

10.01   Grant of Interconnection.  Subject to the terms and conditions in this
Article X, the Idaho Power Transmission System and PacifiCorp Transmission
System shall be interconnected at the Point of Interconnection.

10.02   Interconnection Operating Procedures.  Prior to the energization of the
Interconnection, the Owners shall develop written operating procedures, in
accordance with WECC reliability requirements, governing operation of the
Interconnection by the Operator.  The Owners may, by mutual written agreement,
amend and supplement the operating procedures, in accordance with WECC
reliability requirements, governing operation of the Interconnection by the
Operator.

 

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10.03   Interconnection Energization.  The Owners shall energize, or cause to be
energized, the Interconnection upon successful completion of acceptance testing
of the Interconnection by the Operator, including installation of the Metering
Equipment specified in Section 10.04, and completion of the operating procedures
specified in Section 10.02.  The Parties recognize the need for the approval of
an expedited WECC ratings review for Path 14 (Idaho to Northwest ) and Path 75
(Midpoint-Summer Lake) both of which are affected by the Hemingway Substation
Interconnection.  Idaho Power agrees to intertie the planned Hemingway
Substation 230 kV transmission line to the Idaho Power 138 kV Treasure Valley
system only after the WECC ratings process is complete  The non-simultaneous and
simultaneous export ratings of the Midpoint-Summer Lake 500 kV line are
presently 1500 MW and 1187 MW respectively.  Idaho Power acknowledges the desire
to maintain the non-simultaneous export rating of the Midpoint-Summer Lake Line
and will mitigate any adverse impacts that the Hemingway Substation causes to
the non-simultaneous export rating of the Midpoint-Summer Lake Line which is
identified in the WECC rating process in connection with the initial
energization of the Hemingway Substation.  Such mitigation shall include changes
to operating procedures if necessary to achieve this desired rating.  The
simultaneous export rating of the Midpoint-Summer Lake Line is an allocation of
the capability of multiple lines in Path 14, and Idaho Power will support
PacifiCorp if a third party raises a challenge to the simultaneous rating of the
Midpoint-Summer Lake Line.

10.04   Metering.  The Operator shall operate and maintain the Metering
Equipment and meters (which are part of the Common Facilities) in accordance
with Good Utility Practice and applicable WECC operating guides, protocols and
metering guidelines.

(a)        The Operator shall test the Metering Equipment and meters (which are
part of the Common Facilities) no less frequently than once every two (2)
years.  The Owners shall be given reasonable advance notice of the Operator’s
testing of the Metering Equipment and meters (which are part of the Common
Facilities) and shall have the opportunity to observe such testing, and the
Operator shall provide the Owners a copy of meter results (including any early
results to the extent the Operator has access to the results) promptly upon the
results being available to the Operator.  Each Owner may request additional
tests of the Metering Equipment and meters (which are part of the Common
Facilities) beyond those required by the first sentence of this Section
10.04(a), provided such additional tests shall be conducted by the Operator at
the expense of the requesting Owner, unless such additional test reveals that
the Metering Equipment and meters (which are part of the Common Facilities) are
found to register outside the accepted accuracy range for watts and vars of full
load equals +/- 0.2%, light load equals +/-0.2%, and power factor equals
+/-0.3%, in which event the expense of the additional testing will borne by the
Owners equally.

(b)        If, as a result of any test, the Metering Equipment and meters (which
are part of the Common Facilities) are found to be registering outside the
applicable accuracy standard in effect at the time of the test, such Metering
Equipment and meters (which are part of the Common Facilities) shall be restored
to the accuracy standard or an accurate meter substituted by the Operator.

 

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(c)        The Operator shall provide each Owner with a real time remote signal
from the Metering Equipment and meters (which are part of the Common Facilities)
pursuant to established inter-control area communications protocols.

(d)       The Owners acknowledge that (i) the current meter point of Path 14
(Idaho to Northwest) and (ii) Path 75 (Summer Lake) is expected to shift from
the Midpoint Substation to the Hemingway Substation with no reduction to
existing ratings for either path.  Once the meter point is shifted to the
Hemingway Substation for both paths, the Owners will agree on appropriate
compensation for the line losses transferred to the Idaho Power balancing area.

10.05   Service Conditions.

(a)        Operation and Maintenance; Avoidance of Burdens and Control of System
Disturbances.  Each Owner shall operate and maintain its Transmission System in
a manner consistent with Good Utility Practice and the provisions of this
Section 10.05.  In addition, each Owner shall operate and maintain its
respective Transmission System so as to minimize, in accordance with Good
Utility Practice, the likelihood of a disturbance originated in either
Transmission System, which might cause impairment to the service of the other
Owner or of any transmission system interconnected with the Transmission System
of the other Owner.  Either Owner may install and operate on its Transmission
System such relays, disconnecting devices, and other equipment as it may deem
appropriate for the protection of its Transmission System, provided that any
such relays, disconnecting devices and other equipment on the Transmission
Facilities shall be handled pursuant to Article VII.

(b)        Additional Services.  This Article X is applicable only to the
physical interconnection of the Owners’ Transmission Systems at the Point of
Interconnection and does not obligate either Owner to receive or provide any
service.  Other services provided by one Owner to the other Owner shall be
governed by such other agreements as the Owners may enter into from time to
time.  Neither Owner shall be obligated to deliver reactive power for the
benefit of the other Owner, and neither Owner shall be obligated to receive
reactive power when to do so might introduce objectionable operating conditions
on its Transmission System.

(c)        Interruption of Service.  The Owners shall use Commercially
Reasonable Efforts, consistent with Good Utility Practice and any applicable
Reliability Standards and Governmental Requirements, to provide a physical
interconnection to be operated in continuous synchronization at the Point of
Interconnection, provided that an Owner (“Interrupting Owner”) may temporarily
interrupt or isolate the Interconnection under the following circumstances:  (i)
by operation of automatic equipment installed for power system protection; (ii)
after consultation with the other Owner, other than in an emergency situation
where consultation is not practicable, when an Owner deems it necessary for
installation, maintenance, inspection, repairs or replacements of equipment on
its Transmission System; (iii) at any time that, in the sole judgment of the
Interrupting Owner, such action is necessary to preserve the integrity of, or to
prevent or limit any instability on, or to avoid or mitigate an Unauthorized Use
on its Transmission System; (iv) where necessary to comply with documented
directives from a Governmental Authority; (v) as a result of one or more events
of Force Majeure; or (vi) where necessary to prevent (A) death or serious injury
to any person, (B) material damage or harm to any property or (C) any material
adverse effect to the security of, or damage to its Transmission

 

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System or the electric systems of others to which its Transmission System is
directly connected, including the other Owner’s Transmission System.  An
Interrupting Owner shall use Commercially Reasonable Efforts to provide the
other Owner (1) with reasonable advance notice of any planned interruption of
the Interconnection and (2) with notice of any other interruption of the
Interconnection as soon as practicable after the interruption.  If synchronous
operation is interrupted, the Owners shall cooperate so as to remove the cause
of such interruption as soon as commercially practicable consistent with Good
Utility Practice, applicable Reliability Standards and applicable Governmental
Requirements.
 

(d)       Physical and Cyber Security.  The Operator shall cooperate with each
Owner in complying with any physical and cyber security or other security
requirement established by Governmental Requirement, including Reliability
Standards, applicable to the Owner and the Transmission Facilities, written
notice of which the Owner provides to the Operator.

10.06   Survival of Interconnection Provision.  The provisions of this Article
X, together with Articles XI,  XII, XIV, XV, XVIII, XIX and XX (to the extent
applicable to the surviving provisions of this Article X), shall continue in
full force and effect notwithstanding the expiration or termination of this
Agreement, provided that in the event of expiration or termination of this
Agreement, the Parties shall amend this Agreement to reflect such changes to
this Agreement as shall be necessary and mutually acceptable to the Parties to
conform this Agreement to the surviving provisions of this Agreement in
accordance with this Section 10.06.

ARTICLE XI
FORCE MAJEURE

11.01   Force Majeure Defined.

  For purposes of this Agreement, “Force Majeure” means an event or circumstance
beyond the reasonable control of and without the fault or negligence of the
Owner or Operator claiming Force Majeure (“Affected Party”), which, despite the
exercise of reasonable diligence, cannot be or be caused to be prevented,
avoided or removed by such Affected Party including, to the extent satisfying
the above requirements, acts of God; earthquake; abnormal weather condition;
hurricane; flood; lightning; high winds; drought; peril of the sea; explosion;
fire; war (declared or undeclared); military action; sabotage; riot;
insurrection; civil unrest or disturbance; acts of terrorism; economic sanction
or embargo; civil strike, work stoppage, slow-down, or lock-out that are of an
industry or sector-wide nature and that are not directed solely or specifically
at the Affected Party; the binding order of any Governmental Authority, provided
that the Affected Party has in good faith reasonably contested such order; the
failure to act on the part of any Governmental Authority, provided that such
action has been timely requested and diligently pursued; unavailability of
equipment, supplies or products, but only to the extent caused by Force Majeure;
failure of equipment, provided that the equipment has been operated and
maintained in accordance with Good Utility Practice; and transportation delays
or accidents, but only to the extent otherwise caused by Force Majeure;
provided, however, that neither insufficiency of funds, financial inability to
perform nor changes in market conditions shall constitute Force Majeure.

 

 

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11.02   Effect of Force Majeure.

(a)        If an Affected Party is rendered wholly or partly unable to perform
its obligations under this Agreement or its performance is delayed because of
Force Majeure, such Affected Party shall be excused from, and shall not be
liable for, whatever performance it is unable to perform or delayed in
performing due to the Force Majeure to the extent so affected, provided that:

(i)         The Affected Party, as soon as reasonably practical after the
commencement of the Force Majeure, gives the other Owner(s) and the Operator
prompt written notice thereof, including a description of the particulars of the
Force Majeure;

(ii)        The suspension of performance is of no greater scope and of no
longer duration than is required by the Force Majeure; and

(iii)       The Affected Party uses Commercially Reasonable Efforts to overcome
and remedy its inability to perform as soon as reasonably practical after the
commencement of the Force Majeure.

(b)        Notwithstanding anything in this Article XI to the contrary, no
payment obligation arising under this Agreement prior to the date of an event of
Force Majeure shall be excused by such event of Force Majeure.

(c)        Whenever an Affected Party is required to commence or complete any
action within a specified period and is prevented or delayed by Force Majeure
from commencing or completing such action within the specified period, such
period shall be extended by an amount equal to the duration of such event of
Force Majeure occurring or continuing during such period.

ARTICLE XII
EVENTS OF DEFAULT

12.01   Event of Default.

  Each of the following events shall constitute an event of default (“Event of
Default”) by the defaulting Owner (a “Defaulting Owner”):

(a)        the failure to make, when due, any payment required pursuant to this
Agreement, if such failure is not remedied within thirty (30) days after written
notice thereof from the Non-Defaulting Owner;

(b)        any representation or warranty made by such Defaulting Owner herein
is false or misleading in any material respect when made, unless (i) the fact,
circumstance or condition that is the subject of such representation or warranty
is made true within thirty (30) days after notice thereof from the
Non-Defaulting Owner, provided that if the fact, circumstance or condition that
is the subject of such representation or warranty reasonably cannot be corrected
within such thirty (30) day period, then the Defaulting Owner shall have an
additional period of time (not to exceed sixty (60) days) in which to correct
the fact, circumstance or condition that is the subject of such representation
or warranty, and (ii) such cure removes any adverse effect on

 

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the Non-Defaulting Owner of such fact, circumstance or condition being otherwise
than as first represented, or such fact, circumstance or condition being
otherwise than as first represented does not materially adversely affect the
Non-Defaulting Owner;

(c)        a transfer, assignment or other disposition of its interest in this
Agreement or its Ownership Interest (or Capacity Share) in the Transmission
Facilities, in each case, in violation of Article XIX;

(d)       the failure to perform or breach of its covenants and obligations in
Section 4.06;

(e)        the failure to be a Qualified Owner, if such failure is not remedied
within thirty (30) days after written notice thereof from the Non-Defaulting
Owner;

(f)        the failure to perform or breach of any material covenant or
obligation set forth in this Agreement (other than provided for in Section
12.01(a), (b), (c), (d) or (e)), if such failure is not remedied within thirty
(30) days after written notice thereof from the Non-Defaulting Owner, provided
that if such failure or breach cannot reasonably be cured within thirty (30)
days, then the Defaulting Owner shall have an additional period of time (not to
exceed ninety (90) days) in which to cure such failure or breach so long as the
Defaulting Owner commences good faith activities to cure the failure or breach
during the initial 30-day cure period and continues to utilize its Commercially
Reasonable Efforts to effect a cure; or

(g)        the Defaulting Party becomes Bankrupt.

12.02   Cure by Non-Defaulting Owner.

  If a Defaulting Owner fails to cure an Event of Default, then the
Non-Defaulting Owner may, in its sole discretion, attempt to cure the Event of
Default, provided that the Defaulting Owner shall reimburse the Non-Defaulting
Owner for all costs and expenses incurred by or on behalf of the Non-Defaulting
Party pursuant to this Section 12.02.

12.03   Remedies.

(a)        If an Event of Default occurs and is continuing, then the
Non-Defaulting Owner shall be entitled to exercise any of it remedies at law or
in equity, including recovery from the Defaulting Owner of any damages suffered
as a result of the Event of Default, subject to Section 14.08.  The
Non-Defaulting Party shall use Commercially Reasonable Efforts to mitigate any
damages suffered as a result of the Event of Default.

 

 

(b)        The Owners acknowledge that the obligations and covenants performed
by each Owner hereunder are unique and that the Non-Defaulting Owner will be
irreparably injured should such obligations and covenants not be consummated in
accordance with the terms and conditions of this Agreement.  Consequently, the
Non-Defaulting Owner will not have an adequate remedy at law if the other Owner
shall fail to perform its obligations and covenants hereunder.  The
Non-Defaulting Owner shall have the right, in addition to any other remedy
available under this Agreement, to specific performance of the Defaulting
Owner's obligations

 

 

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and covenants hereunder, and the Owners agree not to take a position in any
proceeding arising out of this Agreement to the effect that the Non-Defaulting
Party has an adequate remedy at law.
 

ARTICLE XIII
REPRESENTATIONS AND WARRANTIES

13.01   Representations and Warranties of PacifiCorp.  PacifiCorp represents and
warrants to Idaho Power as of the Execution Date as follows:

 

(a)        It is duly formed, validly existing and in good standing under the
laws of the jurisdiction of its formation.

(b)        It has all requisite corporate power necessary to own its assets and
carry on its business as now being conducted or as proposed to be conducted
under this Agreement.

(c)        It has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations under this Agreement, and
the execution and delivery of this Agreement and the performance by it of this
Agreement have been duly authorized by all necessary corporate action on its
part.

(d)       The execution and delivery of this Agreement and the performance by it
of this Agreement do not: (i) violate its organizational documents; (ii) violate
any Governmental Requirements applicable to it; or (iii) result in a breach of
or constitute a default of any material agreement to which it is a party.

(e)        This Agreement has been duly and validly executed and delivered by it
and constitutes its legal, valid and binding obligation enforceable against it
in accordance with its terms, except as the same may be limited by bankruptcy,
insolvency or other similar laws affecting creditors’ rights generally and by
principles of equity regardless of whether such principles are considered in a
proceeding at law or in equity.

(f)        Except as disclosed in Schedule 13.01(f), all material Governmental
Authorizations required by Governmental Requirements to have been obtained by it
prior to the date hereof in connection with the due execution and delivery of,
and performance by it of its obligations under, this Agreement, have been duly
obtained or made and are in full force and effect.

(g)        It is a Qualified Owner.

13.02   Representations and Warranties of Idaho Power.

  Idaho Power represents and warrants to PacifiCorp as of the Execution Date as
follows:

(a)        It is duly formed, validly existing and in good standing under the
laws of the jurisdiction of its formation.

(b)        It has all requisite corporate power necessary to own its assets and
carry on its business as now being conducted or as proposed to be conducted
under this Agreement.

 

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(c)        It has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations under this Agreement, and
the execution and delivery of this Agreement and the performance by it of this
Agreement have been duly authorized by all necessary corporate action on its
part.

(d)       The execution and delivery of this Agreement and the performance by it
of this Agreement do not: (i) violate its organizational documents; (ii) violate
any Governmental Requirements applicable to it; or (iii) result in a breach of
or constitute a default of any material agreement to which it is a party.

(e)        This Agreement has been duly and validly executed and delivered by it
and constitutes its legal, valid and binding obligation enforceable against it
in accordance with its terms, except as the same may be limited by bankruptcy,
insolvency or other similar laws affecting creditors’ rights generally and by
principles of equity regardless of whether such principles are considered in a
proceeding at law or in equity.

(f)        Except as disclosed in Schedule 13.02(f), all material Governmental
Authorizations required by Governmental Requirements to have been obtained by it
prior to the date hereof in connection with the due execution and delivery of,
and performance by it of its obligations under, this Agreement, have been duly
obtained or made and are in full force and effect.

(g)        It is a Qualified Owner.

ARTICLE XIV
INDEMNIFICATION

14.01   Indemnities.

(a)        Subject to the provisions of Section 14.03 and Section 14.08, each
Owner (the “Indemnifying Party”) shall indemnify, defend and hold harmless the
other Owner (the “Indemnified Party”) and its Representatives, from and against
any and all suits, actions, liabilities, legal proceedings, claims, demands,
losses, costs and expenses of whatsoever kind or character, including reasonable
attorneys’ fees and expenses (collectively, “Claims”) of third parties, for
injury or death of persons or physical loss of or damage to property of Persons
(other than the Indemnified Party and its Representatives) arising from the
Indemnifying Party’s (including its Representatives’): (i) gross negligence or
willful misconduct in connection with the performance of this Agreement; or (ii)
failure to perform a material obligation under this Agreement.

(b)        In addition to and not in limitation of the indemnity provided in
Section 14.01(a), but subject to the provisions of Section 14.03 and Section
14.08, each Owner, as Indemnifying Party, shall severally and not jointly, in
accordance with its Ownership Interest, indemnify, defend and hold harmless the
Operator, as Indemnified Party, and its Representatives from and against any and
all third-party Claims for injury or death of persons or physical loss of or
damage to property of Persons (other than the Indemnified Party and its
Representatives), or fines or penalties levied or imposed by Governmental
Authorities, in each case, arising under or in connection with this Agreement,
including in connection with the performance by the

 

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Operator of its obligations under this Agreement, except for such Claims or
fines arising from the Operator’s or its Representatives’: (i) gross negligence
or willful misconduct in connection with the performance of this Agreement or
(ii) failure to perform a material obligation under this Agreement.
 

(c)        Subject to the provisions of Section 14.03 and Section 14.08, the
Operator, as Indemnifying Party, shall indemnify, defend and hold harmless each
Owner, as Indemnified Party, and its Representatives from and against any and
all Claims for injury or death of persons or physical loss of or damage to
property of Persons (including the Indemnified Party and its Representatives),
or fines or penalties levied or imposed by Governmental Authorities or Losses
incurred by the Indemnified Party and its Representatives, arising from the
Operator’s and its Representatives’ (i) gross negligence or willful misconduct
in connection with the performance of this Agreement or (ii) failure to perform
a material obligation under this Agreement; provided, however, in no event shall
the Operator be obligated to indemnify, defend or hold harmless an Owner and its
Representatives from and against any such Claims or fines or Losses to the
extent arising from such Owner’s or its Representatives’: (i) gross negligence
or willful misconduct in connection with the performance of this Agreement; or
(ii) failure to perform any material obligation under this Agreement.

14.02   Notice and Participation.

(a)        If an Indemnified Party intends to seek indemnification under this
Article XIV with respect to any Claims, the Indemnified Party shall give the
Indemnifying Party prompt written notice of such Claims upon the receipt of
actual knowledge or information by the Indemnified Party of any possible Claims
or of the commencement of such Claims.  The Indemnifying Party shall have no
liability under this Article XIV for any Claim for which such notice is not
provided, but only to the extent that the failure to give such notice materially
impairs the ability of the Indemnifying Party to respond to or to defend the
Claim.

(b)        The Indemnifying Party shall have the right to assume the defense of
any Claim, at its sole cost and expense, with counsel designated by the
Indemnifying Party and reasonably satisfactory to the Indemnified Party;
provided, however, that if the defendants in any such proceeding include both
the Indemnified Party and the Indemnifying Party, and the Indemnified Party
shall have reasonably concluded that there may be legal defenses available to it
which are in conflict with those available to the Indemnifying Party and that
such conflict materially prejudices the ability of the counsel selected by the
Indemnifying Party to represent both Parties, the Indemnified Party shall have
the right to select separate counsel reasonably satisfactory to the Indemnifying
Party, at the Indemnifying Party’s expense, to assert such legal defenses and to
otherwise participate in the defense of such Claim on behalf of such Indemnified
Party, and the Indemnifying Party shall be responsible for the reasonable fees
and expenses of such separate counsel.

(c)        Should any Indemnified Party be entitled to indemnification under
this Article XIV as a result of a Claim by a third party, and should the
Indemnifying Party fail to assume the defense of such Claim within a reasonable
period of time after the Indemnified Party has provided the Indemnifying Party
written notice of such Claim, the Indemnified Party may, at

 

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the expense of the Indemnifying Party, contest or, with or without the prior
consent of the Indemnifying Party, settle such Claim.

(d)       Except to the extent expressly provided herein, no Indemnified Party
shall settle any Claim with respect to which it has sought or is entitled to
seek indemnification pursuant to this Article XIV unless (i) it has obtained the
prior written consent of the Indemnifying Party, or (ii) the Indemnifying Party
has failed to assume the defense of such Claim within a reasonable period of
time after the Indemnified Party has provided the Indemnifying Party written
notice of such Claim.

(e)        Except to the extent expressly provided otherwise herein, no
Indemnifying Party shall settle any Claim with respect to which it may be liable
to provide indemnification pursuant to this Section without the prior written
consent of the Indemnified Party; provided, however, that if the Indemnifying
Party has reached a bona fide settlement agreement with the plaintiff(s) in any
such proceeding, which settlement includes a full release of the Indemnified
Party for any and all liability with respect to such Claim, and the Indemnified
Party does not consent to such settlement agreement, then the dollar amount
specified in the settlement agreement, plus the Indemnified Party’s reasonable
legal fees and other costs related to the defense of the Claim paid or incurred
prior to the date of such settlement agreement, shall act as an absolute maximum
limit on the indemnification obligation of the Indemnifying Party with respect
to the Claim, or portion thereof, that is the subject of such settlement
agreement.

14.03   Net Amount.

  Subject to the limitation in Section 14.02(e), if applicable, in the event
that an Indemnifying Party is obligated to indemnify and hold any Indemnified
Party harmless under this Article XIV, the amount owing to the Indemnified Party
shall be the amount of such Indemnified Party’s actual Claims, net of any
insurance or other recovery actually received by the Indemnified Party.

14.04   No Release of Insurers.

  The provisions of this Article XIV shall not be deemed or construed to release
any insurer from its obligation to pay any insurance proceeds in accordance with
the terms and conditions of valid and collectible insurance policies.

14.05   Mitigation.

  Each Indemnified Party entitled to indemnification hereunder shall take use
Commercially Reasonable Efforts to mitigate all Claims after becoming aware of
any event which could reasonably be expected to give rise to any Claims that are
indemnifiable or recoverable hereunder or in connection herewith.

14.06   Assertion of Claims.

  No Claim of any kind shall be asserted against any Owner or the Operator,
whether arising out of contract, tort (including negligence), strict liability,
or any other cause of or form of action, unless it is filed in a court of
competent jurisdiction, or a demand for arbitration is made, within the
applicable statute of limitations period for such Claim.

14.07   Survival of Obligation.  The duty to indemnify under this Article XIV
shall continue in full force and effect notwithstanding the expiration or
termination of this Agreement, with respect to any Claim arising out of an event
or condition which occurred or existed prior to such expiration or termination.

14.08   Limitation on Liability.

 

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(a)        Notwithstanding any provision in this Agreement to the contrary,
neither Owner nor the Operator shall be liable under this Agreement in any
action at law or in equity, whether based on contract, tort or strict liability
or otherwise, for any special, incidental, indirect, exemplary, punitive or
consequential damages or losses, including any loss of revenue, income, profits
or investment opportunities, loss of the use of equipment, or the cost of
temporary equipment or services, provided that any fines or penalties levied or
imposed by Governmental Authorities shall not be excluded under this Section
14.08(a) as special, incidental, indirect, exemplary, punitive or consequential
damages or losses.

(b)        Notwithstanding any provision in this Agreement to the contrary,
neither Owner nor the Operator shall be liable under this Agreement if and to
the extent that the Agreement Limiting Liability Among Western Interconnected
Systems executed by Idaho Power on August 5, 1985 and by PacifiCorp on August
22, 1973 (the “WIS Agreement”) is then in effect between the Parties and
expressly limits or precludes such liability.  Nothing in this Agreement shall
amend or otherwise affect in any way the terms and conditions of or liability of
the Parties under the WIS Agreement.

ARTICLE XV
PROPRIETARY INFORMATION

15.01   Disclosure of Proprietary Information Prohibited.  Any Proprietary
Information of a Party (whether in its capacity as Owner or Operator) (the
“Transferor”) which is disclosed to or otherwise received or obtained by the
other Party (whether in its capacity as Owner or Operator) (the “Transferee”)
incident to this Agreement shall be held in confidence and the Transferee shall
not (subject to Sections 15.02, 15.03 and 15.05) publish or otherwise disclose
any Proprietary Information of the Transferor to any Person for any reason or
purpose whatsoever, or use any Proprietary Information for any purpose other
than performance under this Agreement, without the prior written approval of the
Transferor, which approval may be granted or withheld by the Transferor in its
sole discretion.  Without limiting the generality of the foregoing, each
Transferee shall observe at a minimum the same safeguards and precautions with
regard to the Transferor’s Proprietary Information which the Transferee observes
with respect to its own information of the same or similar kind.

15.02   Disclosure by Representatives.  Each Transferee agrees that it will make
available Proprietary Information received from a Transferor to its own
representatives only on a need-to-know basis, and that all Persons to whom such
Proprietary Information is made available will be made aware of the confidential
nature of such Proprietary Information, and will be required to agree to hold
such Proprietary Information in confidence in accordance with the terms hereof.

15.03   Permitted Disclosures.  Notwithstanding anything to the contrary
contained in this Article XV:

(a)        A Transferee may provide any Proprietary Information to any
Governmental Authority having jurisdiction over or asserting a right to obtain
such information, provided that (i) such Governmental Authority orders that such
Proprietary Information be provided, and (ii) unless prohibited from so doing by
applicable Governmental Requirements, the Transferee promptly advises the
Transferor of any request for such information by such

 

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Governmental Authority and cooperates in giving the Transferor an opportunity to
present objections, requests for limitation, and/or requests for confidentiality
or other restrictions on disclosure or access, to such Governmental Authority.
 

(b)        A Transferee may, to the extent required, disclose Proprietary
Information to any Governmental Authority in connection with the application for
any Governmental Authorization; provided that unless prohibited from so doing by
applicable Governmental Requirements, the Transferee shall provide the
Transferor prior written advance notice of such disclosure and the Proprietary
Information that is to be disclosed.

(c)        A Transferee may disclose such Proprietary Information regarding the
existence and terms of this Agreement as such Transferee deems necessary to
enable it to comply with the Securities Exchange Act of 1934, or the rules,
regulations and forms of the Securities and Exchange Commission, issued
thereunder or the applicable rules of any stock exchange, or as otherwise
required by applicable Governmental Requirements.

15.04   Injunctive Relief.  In the event of a breach or threatened breach of the
provisions of this Article XV by any Transferee, the Transferor shall be
entitled to an injunction restraining the Transferee from such breach or
threatened breach.  Nothing contained herein shall be construed as prohibiting
the Transferor from pursuing any other remedies available at law or equity for
such breach or threatened breach of this Agreement.

15.05   Publicity.  Any public relations matters, including public announcements
and press releases or similar publicity, arising out of or in connection with
the terms of this Agreement or the transactions contemplated herein, shall be
coordinated and agreed to between the Owners prior to said announcement or
release.

15.06   Proprietary Information Defined.  For purposes of this Agreement,
“Proprietary Information” means all information, written or oral, which has been
or is disclosed by the Transferor, or by any Representative of the Transferor,
or which otherwise becomes known to the Transferee, or to any Representative of
such Transferee, or any other party in a confidential relationship with, the
Transferee, and which (a) relates to matters such as patents, trade secrets,
research and development activities, draft or final contracts or other business
arrangements, books and records, budgets, cost estimates, pro forma
calculations, engineering work product, environmental compliance, vendor lists,
suppliers, manufacturing processes, energy consumption, pricing information,
private processes, and other similar information, as they may exist from time to
time, (b) relates to the existence or the terms, including pricing and other
commercial terms, of this Agreement, or (c) the Transferor expressly designates
in writing to be confidential, provided that “Proprietary Information” shall
exclude information falling into any of the following categories:

(i)  Information that, at the time of disclosure hereunder, is in the public
domain, other than information that entered the public domain by breach of this
Agreement by Transferee;

 

 

 

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(ii)        Information that, after disclosure hereunder, enters the public
domain, other than information that enters the public domain by breach of this
Agreement by Transferee;

(iii)       Information, other than that obtained from third-parties, that prior
to disclosure hereunder, was already in Transferee’s possession, either without
limitation on disclosure to others or subsequently becoming free of such
limitation;

(iv)       Information obtained by Transferee from a third-party having an
independent right to disclose the information; or

(v)        Information that is available through independent research without
use of or access to the Proprietary Information.

15.07   Survival.

  The provisions of this Article XV shall continue in full force and effect
during the Term and for a period of two (2) years thereafter, notwithstanding
the expiration or termination of this Agreement, with respect to any Proprietary
Information obtained by any Transferee prior to such expiration or termination.

ARTICLE XVI
RELIABILITY

16.01   Reliability.   The Operator shall be responsible for compliance with all
Reliability Standards applicable to the Owners and the Operator with respect to
the Transmission Facilities.

ARTICLE XVII
TAXES

17.01   No Partnership.  Nothing in this Agreement shall be deemed to create or
constitute a partnership, joint venture or association among the Owners or any
of them, the sole purpose of this Agreement being limited to (a) the allocation
of the Ownership Interests (and Capacity Share) in the Transmission Facilities
and (b) provision for (i) the orderly and efficient construction, repair,
modification, rehabilitation, operation and maintenance of the Owners’
respective separate undivided Ownership Interests in the Transmission
Facilities, and (ii) the interconnection of the Owners’ respective Transmission
Systems.  Each Owner agrees and covenants that it shall not take or omit to take
any action or reporting position with any Governmental Authority contrary to
this Section 17.01.

17.02   761 Election.  The Owners intend that, as tenants in common and owners
of undivided Ownership Interests, for United States income tax purposes the
Owners shall elect in accordance with the provisions of section 761 of the
Internal Revenue Code of 1986, as amended (“Code”), and the applicable income
tax regulations thereunder (“Regulations”), to be excluded from all of the
provisions of Subchapter K of the Code upon the first occasion in which such
election may be filed under these Regulations and that, if such election is not
filed, this Agreement shall constitute an election under Regulations section
1.761-2(b)(2)(ii) to be excluded from all of the provisions of Subchapter K of
the Code and the applicable Regulations, beginning

 

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with the first year of the creation of the tenancy in common as contemplated by
this Agreement and that no Owner shall object to any such election.

17.03   Responsibility for Taxes.  It is the intent of the Owners that so far as
possible, each Owner shall separately report, promptly and timely file returns
with respect to, be responsible for and pay all property, income, franchise,
business, or other taxes or fees (“Taxes”), arising out of its Ownership
Interests and the matters contemplated by this Agreement, that such Taxes shall
be separately levied and assessed against each Owner severally and that each
Owner shall be solely responsible for and shall pay all such Taxes so levied and
assessed against it without any responsibility of the other Owner with respect
thereto and without the amounts thereof being paid and apportioned between the
Owners under this Agreement.  To the extent that Taxes (such as property,
payroll, sales and use Taxes) may be levied or assessed against the Transmission
Facilities, their operation or the Owners in such a manner as to make impossible
the carrying out of the foregoing provisions of this Section 17.03, the Operator
shall report, file returns with respect to and pay such Taxes and each other
Owner shall immediately reimburse the Operator for each such Owner’s Ownership
Interest percentage of such Taxes.  The Operator shall not have any obligation
to contest or to seek refund of such Taxes; provided, however, that the Operator
may, by its personnel or counsel of its selection, pursue such administrative or
court proceedings as the Operator may determine.  Each Owner shall on request
pay to the Operator such Owner’s Ownership Interest percentage of the costs of
such proceedings and shall share in any savings resulting from such proceedings
in the same proportion.  Each Owner agrees to cooperate with the other Owner
with respect to reasonable requests for information or other matters with
respect to Taxes.

17.04   Indemnification.  Each Owner (the “Tax Indemnifying Party”) shall
indemnify and hold harmless the other Owner (the “Tax Indemnitee Party”), on an
after-tax basis, from and against any Taxes (including any interest or
penalties) imposed on such Tax Indemnitee Party or the Transmission Facilities
or any part thereof, to the extent such Taxes are the responsibility of the Tax
Indemnifying Party pursuant to this Article XVII.

17.05   Determination of Depreciation and Other Matters.  Each Owner shall
determine the basis and method it will use for purposes of depreciation and
other matters where investment of the Transmission Facilities is relevant.

ARTICLE XVIII
DISPUTES

18.01   Exclusive Procedure.  Any dispute, controversy or claim arising out of
or relating to this Agreement or the breach, interpretation, termination,
performance or validity of this Agreement (each, a “Dispute”) shall be resolved
pursuant to the procedures of this Article XVIII.

18.02   Dispute Notices. If a Dispute arises between the Owners or between the
Operator and one or both of the Owners, then any Party to such Dispute (each, a
“Disputing Party”) may provide written notice thereof to the other Disputing
Party or Disputing Parties, including a detailed description of the subject
matter of the Dispute (the “Dispute Notice”).  Any Disputing Party may seek a
preliminary injunction or other provisional judicial remedy if such action is
necessary to prevent irreparable harm or preserve the status quo, in which case
the Disputing

 

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Parties nonetheless will continue to pursue resolution of the Dispute pursuant
to this Article XVIII.

18.03   Informal Dispute Resolution.

(a)        The Disputing Parties shall make a good faith effort to resolve the
Dispute by prompt negotiations between and/or among each Disputing Party’s
representative so designated in writing to the other Disputing Party or
Disputing Parties (each a “Manager”).  If the Managers are not able to resolve
the Dispute within thirty (30) days after the date of the Dispute Notice, they
shall refer the matter to the designated senior officers of their respective
companies (the “Executive(s)”), who shall have authority to settle the Dispute. 
If the Executives are not able to resolve the Dispute within sixty (60) days
after the date of the Dispute Notice, then the Dispute shall be resolved
pursuant to Section 18.04.

(b)        All communications and writings exchanged between and/or among the
Disputing Parties in connection with these negotiations shall be confidential
and shall not be used or referred to in any subsequent binding adjudicatory
process between and/or among the Disputing Parties, either with respect to the
current Dispute or any future Dispute between and/or among the Owners and/or the
Operator.

18.04  Submission of Dispute to FERC or Approved Courts.  If a Dispute cannot be
settled amicably between the Disputing Parties pursuant to Section 18.03, then
any Disputing Party may, in its sole discretion, within one (1) year after the
conclusion of the time period for informal dispute resolution specified in
Section 18.03, submit such Dispute (a) to FERC or (b) to the jurisdiction of the
state courts situated in Idaho or the United States District Court for the
District of Idaho (the “Approved Courts”).  Each of PacifiCorp and Idaho Power,
in its capacity as an Owner and as the Operator, consents to and accepts for
itself and in respect of its property, generally and unconditionally, the
exclusive jurisdiction of the Approved Courts and appellate courts from any
appeal thereof, and irrevocably waives any objection which it may now or
hereafter have to the jurisdiction of the Approved Courts.  Each of PacifiCorp
and Idaho Power, in its capacity as an Owner and as the Operator, further
irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of venue of any suit, proceeding or
other action brought pursuant to this Article XVIII in any of the Approved
Courts, and irrevocably waives, to the fullest extent permitted by law, and
agrees not to plead or claim in any such Approved Court that any suit,
proceeding or other action brought therein has been brought in an inconvenient
forum.

18.05   Continued Performance.  During the pendency of any Dispute, each Owner
and the Operator shall continue to perform all of its respective obligations
under this Agreement.

ARTICLE XIX
ASSIGNMENT

19.01   Prohibited Transfers and Assignments.  Neither Idaho Power nor
PacifiCorp shall have the right to transfer, assign or otherwise dispose of, in
whole or in part, its interest in this Agreement, including its rights, duties
and obligations hereunder, nor to transfer, assign or

 

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otherwise dispose of, in whole or in part, its Ownership Interest (or Capacity
Share) in the Transmission Facilities, except as permitted under this Article
XIX.

19.02   Permitted Assignments and Transfers.  The restrictions set forth in
Section 19.01 shall not restrict:

(a)        dispositions and sales by the Operator incident to renewals or
replacements of the Transmission Facilities;

(b)        the right of an Owner to subject any of its Ownership Interest (and
Capacity Share) to the lien of any mortgage upon all or a portion of its own
physical electric utility property or to otherwise collaterally assign its
rights and obligations in this Agreement to a lender or other person providing
financing to the Owner;

(c)        the right of an Owner to transfer voluntarily all of its Ownership
Interest (and Capacity Share) and all of its rights and obligations in this
Agreement (including as part of such transfer, in the case of Idaho Power, all
of its rights and obligations in this Agreement as the Operator) in connection
with any sale, merger or other transfer of substantially all of such Owner’s
electric transmission facilities as an operating entity; provided, however, that
the effectiveness of such assignment shall be conditioned upon the assignee (i)
agreeing in writing, in form and substance reasonably satisfactory to the other
Owner, to assume all of the rights and obligations of the assigning Owner as of
the assignment date and (ii) qualifying as a Qualified Owner on the assignment
date;

(d)       the right of an Owner to transfer voluntarily all of its Ownership
Interest (and Capacity Share) and all of its rights and obligations in this
Agreement (including as part of transfer, in the case of Idaho Power, all of its
rights and obligations in this Agreement as the Operator) to an Affiliate of the
Owner which owns all or substantially all of the transmission facilities of such
Owner; provided, however, that the effectiveness of such assignment shall be
conditioned upon the assignee (i) agreeing in writing, in form and substance
reasonably satisfactory to the other Owner, to assume all of the rights and
obligations of the assigning Owner as of the assignment date and (ii) qualifying
as a Qualified Owner on the assignment date;

(e)        the right of any Owner to transfer voluntarily all of its Ownership
Interest (and Capacity Share) and all of its rights and obligations in this
Agreement (including as part of such transfer, in the case of Idaho Power, all
of its rights and obligations in this Agreement as the Operator) to a third
party; provided that:  (i) the other Owner, in its sole discretion, approves
such transfer and approves the third-party purchaser as having demonstrated that
it is financially and technically capable of performing the transferring Owner’s
(and, in the case where Idaho Power is the transferring Owner, Operator’s)
obligations under this Agreement, and (ii) the other Owner is offered the right
of first refusal to purchase such Ownership Interest (and Capacity Share) and
all of the transferring Owner’s rights and obligations in this Agreement
(including as part of such transfer, in the case where Idaho Power is the
transferring Owner, all of its rights and obligations in this Agreement as the
Operator), on terms no less favorable than those offered to such proposed
third-party purchaser; provided, however, that the effectiveness of such
assignment shall be conditioned upon the third-party purchaser (A) agreeing in
writing, in form and substance reasonably satisfactory to the other Owner, to
assume all of the rights and

 

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obligations of the assigning Owner (including as part of such transfer, in the
case of Idaho Power, all of its rights and obligations in this Agreement as the
Operator) as of the assignment date and (B) qualifying as a Qualified Owner on
the assignment date; and
 

(f)        the right of an Owner to schedule and provide transmission service
(in the amount of its Capacity Share) over the Transmission Facilities under the
Owner’s OATT and to schedule and transmit an amount of energy commensurate with
the Owner’s Capacity Share over the Transmission Facilities on its own behalf or
on behalf of the Owner’s transmission customers; provided, however, that at no
time shall an Owner be entitled to post, sell, schedule or transmit transmission
service or an amount of energy over the Transmission Facilities greater than its
Capacity Share, unless otherwise mutually agreed to in writing in advance by the
other Owner.

ARTICLE XX
MISCELLANEOUS

20.01   Notices.

(a)        Any notice, demand, request or other communication required or
permitted to be given pursuant to this Agreement shall be in writing and signed
by the Owner or Operator giving such notice, demand, request or other
communication and shall be hand delivered or sent by certified mail, return
receipt requested, or overnight courier to the other Owner and/or Operator at
the address set forth below:

If to Idaho Power:

Idaho Power Company

 

1221 West Idaho Street

 

Boise, ID 83702

 

Attn:  Manager, Grid Operations

 

Telephone:  208-388-5669

 

 

With a copy to:

Idaho Power Company

 

1221 West Idaho Street

 

Boise, ID  83702

 

Attn:  Legal Department

 

Telephone:  208-388-2300

 

 

If to PacifiCorp:

PacifiCorp

 

825 NE Multnomah Street, Suite 1600

 

Portland, OR 97232

 

Attn:    Director, Transmission Service

 

Telephone:  503-813-6712

 

 

 

 

 

 

 

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With a copy to:

PacifiCorp

 

825 NE Multnomah Street, Suite 1600

 

Portland, OR 97232

 

Attn:  Legal Department

 

Telephone:  503-813-5854

 

 

If to Operator:

Idaho Power Company

 

1221 West Idaho Street

 

Boise, ID 83702

 

Attn:  Manager, Grid Operations

 

Telephone:  208-388-5669

 

 

With a copy to:

Idaho Power Company

 

1221 West Idaho Street

 

Boise, ID  83702

 

Attn:  Legal Department

 

Telephone:  208-388-2300

 

(b)        Each Owner and the Operator shall have the right to change the place
to which any notice, demand, request or other communication shall be sent or
delivered by similar notice sent in like manner to the other Owner(s) and the
Operator.  The effective date of any notice, demand, request or other
communication issued pursuant to this Agreement shall be when:  (i) delivered to
the address of the Owner or Operator personally, by messenger, by a nationally
or internationally recognized overnight delivery service or otherwise; or (ii)
received or rejected by the Owner or Operator, if sent by certified mail, return
receipt requested, in each case, addressed to the Owner or Operator at its
address and marked to the attention of the person designated above (or to such
other address or person as an Owner or Operator may designate by notice to the
Owners and/or Operator effective as of the date of receipt by such Owners and/or
Operator).

20.02   Entire Agreement.  This Agreement and the Exhibits attached hereto, and
the other documents between the Owners referenced herein constitute the entire
agreement between the Owners and the Operator and supersede all prior agreements
and understandings, whether oral and written, between the Owners and the
Operator with respect to the subject matter hereof.  There are no oral
understandings, terms or conditions and neither Owner nor the Operator has
relied upon any representation or warranty, expressed or implied, not contained
in this Agreement.

20.03   Parties Bound.  This Agreement shall be binding upon each of the Owners
and the Operator and their respective successors and permitted assigns.

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20.04   Amendments.

(a)        Except as otherwise provided in Section 20.04(c), this Agreement may
not be amended, supplemented or otherwise modified, other than pursuant to an
instrument in writing executed by the Owners.

(b)        Absent agreement of both Parties to the proposed change and except as
otherwise provided in Section 20.04(c), the standard of review for changes to
this Agreement proposed by a Party, or FERC acting sua sponte, shall be the
“public interest” standard of review set forth in United Gas Pipe Line Co. v.
Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v.
Sierra Pacific Power Co., 350 U.S. 348 (1956); provided that the standard of
review for any modification to this Agreement requested by non-contracting third
parties shall be the most stringent standard permissible under then-applicable
law.

(c)        Nothing contained in this Agreement shall be construed as affecting
in any way the right of either Party to unilaterally make application to FERC
under Section 205 or Section 206 of the Federal Power Act for a change in the
charges set forth in Exhibit F.  It is the intent of the Parties that the
standard of review that FERC will apply to any such unilateral application shall
be the just and reasonable standard of review rather than the “public interest”
standard of review.

20.05   Waivers.  No waiver by any Owner or the Operator of any one or more
defaults by any other Owner or the Operator in the performance of any of the
provisions of this Agreement shall be construed as a waiver of any other default
or defaults whether of a like kind or different nature.  Any delay, less than
any applicable statutory period of limitations, in asserting or enforcing any
rights under this Agreement shall not be deemed a waiver of such rights. 
Failure of any Owner or the Operator to enforce any provisions hereof shall not
be construed to waive such provision, or to affect the validity of this
Agreement or any part thereof, or the right of any Owner thereafter to enforce
each and every provision thereof.

20.06   Choice of Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Idaho, without giving effect to
conflicts of laws principles.

20.07   Headings.  Article and Section headings used in this Agreement
(including headings used in any Exhibits attached hereto) are for convenience of
reference only and shall not affect the construction of this Agreement.

20.08   Relationship of Parties.  The covenants, obligations, and liabilities of
the Owners are intended to be several and not joint or collective, and nothing
herein contained shall ever be construed to create an association, joint
venture, trust or partnership, or to impose a trust or partnership covenant,
obligation or liability on or with regard to any of the Owners.  Each Owner
shall be individually responsible for its own covenant, obligations and
liability as herein provided.  No Owner shall be under the control of, or shall
be deemed to control, the other Owner.  Neither Owner shall have a right nor
power to bind the other Owner without its express written consent.

--------------------------------------------------------------------------------

 

 

 

 

 

20.09   Severability.  In the event that any provision of this Agreement or the
application thereof becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the Owners and the Operator.  The Owners and the Operator further
agree to replace such illegal, void or unenforceable provision of this Agreement
with a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of such illegal, void or
unenforceable provision.

20.10   No Third Party Beneficiaries.  Nothing express or implied in this
Agreement is intended to nor shall be construed to confer upon or give to any
Person (other than the Owners and the Operator) any rights or remedies under or
by reason of this Agreement or any transaction contemplated herein.

20.11   Further Assurances.  Each Owner and the Operator agrees to execute and
deliver from time to time such additional documents, and take such additional
actions, as may be reasonably required by the other Owner or the Operator to
give effect to the purposes and intent hereof.

20.12   Conflict of Interest.  Nothing in this Agreement shall prohibit any
Owner or the Operator from engaging in or possessing any interest in other
projects or business ventures of any nature and description, independently or
with others.

20.13   Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be original, and all of which together shall
constitute one agreement.  Electronic transmission of any signed original
document, and retransmission of any signed electronic transmission, shall be the
same as delivery of an original.  At the request of either Owner or the
Operator, the other Owner or the Operator, as applicable, will confirm
electronically transmitted signatures by signing an original document.

[SIGNATURE PAGE FOLLOWS]

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

IN WITNESS WHEREOF, each of the Owners has caused its duly authorized
representative to execute this Hemingway Joint Ownership and Operating Agreement
as of the date first above written.

 

IDAHO POWER:

IDAHO POWER COMPANY,

 

AS OWNER AND OPERATOR

 

 

 

By:  _____________________________

 

Name:______________________________

 

Title:_______________________________

 

 

PACIFICORP:

PACIFICORP,

 

AS OWNER

 

 

 

By:  _____________________________

 

Name:______________________________

 

Title:_______________________________

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT A

 

Description of Transmission Facilities and Common Facilities

 

Section I.  Description of Transmission Facilities.1

 

The Transmission Facilities includes all above ground 500kV structures, bus, and
equipment and associated foundations starting at the 230kV side of the
transformer high-side air break, 501H, to the extents of the station yard where
the MPSN (Midpoint Substation) 1 and SMLK (Summer Lake) line terminals depart to
the tap line segments.  The major equipment included in the Transmission
Facilities consists of six 500kV breakers and one spare 500kV breaker (stored on
location), seventeen 500kV airbreaks, one SMLK line reactor bank (three 1-phase
units), and one shunt capacitor bank and associated barrier fence attached to
bus #2.  Also included in the Transmission Facilities are 13 control, protection
and line carrier panels, 3 intertie cabinets and their associated control cables
from the panels to the yard equipment.  The Transmission Facilities also
includes all components associated with both tap segments for the MPSN 1 and
SMLK line terminals extending and connecting to the existing Midpoint–Summer
Lake Line.

STATION

 

 

 

 

QTY

Equipment Description

Item

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 2000Amp

206

1

Power Circuit Breaker, 550kV 2000Amp

204

1

Power Circuit Breaker, 550kV 2000Amp

204

10

Local Equipment Annunciator Units for Reactors and Breakers

 

1

Shunt Reactor, 317.5/550kV, 44.33 MVA

201-1

1

Shunt Reactor, 317.5/550kV, 44.33 MVA

201-1

1

Shunt Reactor, 317.5/550kV, 44.33 MVA

201-1

                                               

1For asset accounting purposes, PacifiCorp may request unit of property
breakdown information with greater detail than shown in this Exhibit A at the
conclusion of construction.  Idaho Power will make reasonable and timely
accommodation to such a request, not to exceed the level of detail produced for
its own internal asset accounting purposes.

 

 

--------------------------------------------------------------------------------

 

 

1

Shunt Capacitor, 550kV 220MVAR Expandable to 330MVAR

203

13

Switch, Motor Operated Airbreak, 500kV 4000A

208

3

Switch, Motor Operated Airbreak, 500kV 2000A

209-1

1

Switch, Motor Operated Airbreak w/ GND Switch, 500kV 2000A

209-2

12

Capacitor Voltage Transformer, 500kV

211

6

Capacitor Voltage Transformer, 500kV w/ Carrier Accessories

212

6

Line Trap, 500kV 3000A

214-1

6

Line Tuner, Single Phase Units

214-2

12

Surge Arrestor, 318kV MCOV

215

6

Surge Arrestor, 144kV MCOV

238

138

Insulator, Station Post, 500kV 1800BIL

217

48

Insulator, Station Post, 500kV 1800BIL

218

153

Insulator, Suspension, Polymer 500kV Class

220

 

 

 

QTY

Structure Description

Item

2

Steel Structure, 500kV Line-Deadend A-Frame Structure

100-1

4

Steel Structure, 500kV Line-Deadend A-Frame Structure

100-2

51

Steel Structure, 500kV 3-ph Airbreak Support

106-1

12

Steel Structure, 500kV CCVT Structure

107-1

6

Steel Structure, 500kV Line Trap Structure

107-2

9

Steel Structure, 500kV Surge Arrestor Structure

108

10

Steel Structure, 500kV Strain Bus A-Frame Structure

101

2

Steel Structure, 500kV Transfer Bus Structure, Reactor

103

2

Steel Structure, 500kV Transfer Bus Structure, Spare for Reactor

103

6

Steel Structure, 500kV 3-ph Bus Support, Future Airbreak Support

106-2

117

Steel Structure, Lally, 500kV 1-ph Low

110

--------------------------------------------------------------------------------

 

 

Bus Support

 

3

Steel Structure, Lally, 500kV 1-ph Low Bus Support

110

16

Steel Structure, Lally, 500kV 1-ph Low Bus Support

111

 

 

 

QTY

Conductor Description

Item

3,500 ft

Conductor, 6” Aluminum Pipe, Schedule 80, 6063-T6

300

3,500 ft

Conductor, 1590 ACSR (Dampening for 6” Bus)

303

20,000 ft

Conductor, Strain Bus, 1780 ACSS “CHUKAR” 1.601 Diameter

304

6,750 ft

Conductor, 3/8” EHS Shield Wire

306

75,615 ft

Control Cable

 

 

 

 

QTY

Panel Description

P Number

1

Panel E9: SMLK 11-1 (Pri. #1 Relay)

5933

1

Panel E10: SMLK 11-2 (Pri. #2 Relay & 535A/536A Control)

5934

1

Panel E11: SMLK 11-3 (Pri. #3 Relay)

5935

1

Panel E12: SMLK L511 Protection & 511Z Control

5936

1

Panel E13: SMLK 511Z BF & Lockout

5937

1

Panel F14: RAS A & B (MPSN-HMWY-SMLK Remedial Action)

5947

1

Panel G13: MPSN#1 Power Line Carriers (RFL-9780-1, RFL-9780-2)

5953

1

Panel G14: SMLK Power Line Carriers (RFL-9780-1, RFL-9780-2)

5954

1

Panel H9: MPSN#1 11-1 (Pri. #1 Relay)

5955

1

Panel H10: MPSN#1 11-2 (Pri. #2 Relay & 538A/539A Control)

5956

1

Panel H11: MPSN#1 11-3 (Pri. #3 Relay)

5957

1

Panel L13: C513 11-1 (Pri. #1 Relay & 513W Control)

5966

1

Panel L14: C513 11-2 (Pri. #2 Relay)

5967

13

Panel Rack and Frames

 

1

Intertie Cabinet EF2: SUMMER LAKE 500kV LINE (535A/536A/511Z/L511/CCVT’s)

5985

 

 

--------------------------------------------------------------------------------

 

 

1

Intertie Cabinet GH@: MPSN #1 500kV LINE (538A/539A/CCVT’s)

5987

1

Intertie Cabinet KL2: MPSN #2 500kV LINE(FUTURE) / C513

5991

 

 

 

QTY

Foundation Description

 

156

Other structures (for Items 101, 103, 106-2, 100, 111)

 

6

Deadend Structures (for Items 100-1 and 100-2)

 

78

Equipment Structures

 

3

Reactor oil containment

 

370 ft

Fence, Capacitor Bank Barrier

 

6

Key Interlock for Capacitor Bank Barrier Fence

 

 

 

 

TAP

 

 

 

 

 

QTY

Line Material Description

 

8

Dead-end, Single Pole Tubular Steel w/ Foundation

 

2

Tangent, Single Pole Tubular Steel w/ Foundation

 

2406

Insulator, 10” 52-5 b&s 30k

 

6

Insulator, Horizontal Post 500kV

 

40,500 ft

Conductor,  1272 ACSR 45/7 Bitten

 

8,500 ft

Overhead Ground Wire, 3/8 EHS Steel

 

 

 

 

Section II.  Description of Common Facilities.

 

Description

 

 

Land

 

 

Site Prep and Improvements

 

 

Fencing

 

 

Grounding

 

 

Cable Trench

 

 

Control Building

 

 

DC Batteries and Chargers

 

 

Local Service

 

 

Cabling and Controls not directly associated with Transmission Facilities above
or 230 kV equipment

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

EXHIBIT B

 

[Intentionally omitted.]

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT C

 

Ownership Interests

 

Owner

Ownership Interest

 

 

Idaho Power

41.0%

PacifiCorp

59.0%

 

Each Owner’s percentage Ownership Interest in the Transmission Facilities shall
be determined based on the average of the percentage of Transmission Line
Capacity of each 500 kV transmission line or transformer that has a connection
to the Transmission Facilities at the Hemingway Substation that such Owner owns
or controls.  For purposes of this Exhibit C, “Transmission Line Capacity”
means, in respect of each 500 kV transmission line or transformer that has a
connection to the Transmission Facilities at the Hemingway Substation, the total
amount of rated transmission capacity of such transmission line or transformer,
provided that the Owners agree that (i) neither the Transmission Line Capacity
nor either Owner’s Ownership Interest shall change as a result of a temporary or
permanent change in the rated transmission capacity of any such transmission
lines or transformers that are connected to the Transmission Facilities at the
Hemingway Substation and that were installed during 2010 and (ii) the
Transmission Line Capacity and the Owners’ Ownership Interests shall only
change, if at all, when an additional 500 kV transmission line or transformer is
interconnected to the Hemingway Substation after 2010.

 

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT D

 

[Intentionally omitted.]

 

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT E

 

Construction Budget

$375,920.00

 

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT F

 

Monthly Transmission Facilities O& M Charge and
Monthly Common Facilities Charge

 

The Monthly Transmission Facilities O&M Charge each month during the Term shall
be equal to the product of (1) the Installed Cost of the Transmission
Facilities, (2) PacifiCorp’s Ownership Interest, and (3) the O&M Expense Factor.

For purposes of this Exhibit F:

 

(i)         “Installed Cost of the Transmission Facilities” means the original
and actual aggregate Cost of the Transmission Facilities incurred by or on
behalf of Idaho Power as of the date construction of the Transmission Facilities
is completed pursuant to Article III, trued-up to final Cost after all work
orders for the construction of the Transmission Facilities are closed to
account; and

 

(ii)        the “O&M Expense Factor” means 0.2036% per month.

 

The Monthly Common Facilities Charge each month during the Term shall be equal
to the product of (1) the Installed Cost of the Common Facilities, (2)
PacifiCorp’s Ownership Interest, and (3) the Common Facilities Factor. 

For purposes of this Exhibit F:

 

(i)         “Installed Cost of the Common Facilities” means the original and
actual aggregate Cost of the Common Facilities incurred by or on behalf of Idaho
Power as of the date construction of the Transmission Facilities is completed
pursuant to Article III, trued-up to final Cost after all work orders for the
construction of the Common Facilities are closed to account; and

(ii)        the “Common Facilities Factor” means 0.9653% per month.

 

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT G

 

Point of Interconnection

 

See attached.

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT H

Milestones

 

 

Milestone

Milestone Date

Filing of this Agreement at FERC for approval

5 Business Days after the Execution Date

500 kV yard energized

May 28, 2010

WECC ratings approved

June 15, 2010

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

SCHEDULE 13.01(f)

 

PacifiCorp’s Outstanding Governmental Authorizations

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

SCHEDULE 13.02(f)

 

Idaho Power’s Outstanding Governmental Authorizations

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

Exhibit H

Form of Populus Joint Ownership and Operating Agreement

 

This Populus Joint Ownership and Operating Agreement, dated this __ day of ____,
2010 (the “Execution Date”), is between PacifiCorp, an Oregon corporation,
acting in its regulated transmission provider function (“PacifiCorp”), and Idaho
Power, an Idaho corporation, acting in its regulated transmission provider
function (“Idaho Power”).  Each of PacifiCorp and Idaho Power are sometimes
hereinafter referred to individually as “Owner” and collectively as “Owners”.

RECITALS:

WHEREAS, PacifiCorp owns and operates certain facilities for the transmission of
electric power and energy in interstate commerce, including the 345 kV Populus
substation (the “Populus Substation”) which PacifiCorp is currently constructing
near Downey, Idaho to provide additional transfer capability for power to serve
PacifiCorp’s retail and wholesale customers and to provide line terminal
connections for existing transmission lines located near the Populus Substation
including the Kinport-Bridger Line, the Borah-Bridger Line and the Borah-Ben
Lomond Line (each as defined below);

WHEREAS, Idaho Power has contractual rights to a portion of the transmission
capacity of the Kinport-Bridger Line and the Borah-Bridger Line, both of which
are located near the Populus Substation;

WHEREAS, PacifiCorp and Idaho Power believe that interconnecting the PacifiCorp
Transmission System at the Populus Substation with the Kinport-Bridger Line and
the Borah-Bridger Line will benefit both of the Owners and their customers;

WHEREAS, PacifiCorp and Idaho Power are parties to that certain Joint Purchase
and Sale Agreement, dated as of April 30, 2010 (the “JPSA”), pursuant to which
PacifiCorp has sold to Idaho Power and Idaho Power has purchased from PacifiCorp
an undivided ownership interest in certain transmission and interconnection
equipment and facilities at the Populus Substation used in connection with the
transmission of electric power and energy (consisting of the equipment and
facilities described in Section I of Exhibit A that were installed at the
Hemingway Substation on or before the Closing Date, the “Transferred
Transmission Facilities”);

WHEREAS, PacifiCorp individually owns additional equipment and facilities at the
Populus Substation that serve the PacifiCorp Transmission System and will not be
part of the Transmission Facilities (as defined below), but that PacifiCorp will
make available to support the operation of the Transmission Facilities (as
further described in Section II of Exhibit A, the “Common Facilities”);

WHEREAS, PacifiCorp individually owns additional equipment and facilities at the
Populus Substation that will not be part of the Transmission Facilities, jointly
owned by the Parties, or part of the Common Facilities used to support the
operation of the Transmission Facilities (the “PacifiCorp Individually-Owned
Populus Facilities”); and

                                                                             

--------------------------------------------------------------------------------

 

 

 

 

 

WHEREAS, Idaho Power and  PacifiCorp desire to memorialize the terms and
conditions by which they will: (i) construct and commission additional
transmission and interconnection equipment and facilities at the Populus
Substation used in connection with the transmission of electric power and energy
(consisting of the equipment and facilities described in Section I of Exhibit A
that had not been installed at the Hemingway Substation on or before the Closing
Date, the “Jointly-Developed Transmission Facilities”); (ii) jointly own and
develop the Transferred Transmission Facilities and the Jointly-Developed
Transmission Facilities (collectively, the “Transmission Facilities”), (iii)
operate and maintain the Transmission Facilities; (iv) interconnect the
PacifiCorp Transmission System and the Transmission Facilities at the Populus
Substation; and (v) establish the obligations of the Operator (as defined below)
with respect to compliance with Reliability Standards (as defined below)
applicable to the Transmission Facilities.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Idaho Power and PacifiCorp agree as follows:

ARTICLE I
DEFINITIONS; RULES OF INTERPRETATION

1.01     Definitions.  Unless the context otherwise requires, the following
capitalized terms have the meanings given to them below:

“Affected Party” has the meaning given to such term in Section 11.01.

“Affected System” has the meaning given to such term in the applicable Owner’s
OATT.

“Affected System Operator” has the meaning given to such term in the applicable
Owner’s OATT.

“Affiliate” means, with respect to a Person, each other Person that, directly or
indirectly, controls, is controlled by or is under common control with, such
designated Person; provided, however, that in the case of PacifiCorp,
“Affiliate” means MidAmerican Energy Holdings Company and its direct and
indirect subsidiaries.  For the purposes of this definition, “control”
(including with correlative meanings, the terms “controlled by” and “under
common control with”), as used with respect to any Person, shall mean (i) the
direct or indirect right to cast at least fifty percent (50%) of the votes
exercisable at an annual general meeting (or its equivalent) of such Person or,
if there are no such rights, ownership of at least fifty percent (50%) of the
equity or other ownership interest in such Person, or (ii) the right to direct
the policies or operations of such Person.

“Agreement” means this Joint Ownership and Operating Agreement (including all
Exhibits attached hereto), as the same may be amended and supplemented from time
to time in accordance with the terms hereof.

“Amendment” has the meaning given to such term in Section 7.01(a).

“Approved Courts” has the meaning given to such term in Section 18.04.

                                                                             

--------------------------------------------------------------------------------

 

 

 

 

 

“Bankrupt” means, with respect to any Person, that such Person:   (i) files a
petition or otherwise commences, authorizes or acquiesces in the commencement of
a proceeding or cause of action under any bankruptcy, insolvency, reorganization
or similar law, or has any such petition filed or commenced against it, (ii)
makes an assignment or any general arrangement for the benefit of creditors,
(iii) otherwise becomes insolvent (however evidenced), (iv) has a liquidator,
administrator, receiver, trustee, conservator or similar official appointed with
respect to it or any substantial portion of its property or assets, or (v) is
generally unable to pay its debts as they fall due.

“Ben Lomond-Populus Lines” means the three (3) 345 kV transmission lines
extending from the Ben Lomond Substation to the Populus Substation.

“Ben Lomond Substation” means the existing substation located near Ogden, Utah,
which is owned by PacifiCorp.

 “Borah Substation” means the existing substation located near Idaho Falls,
Idaho, which is owned by Idaho Power.

“Borah-Bridger Line” means the 345 kV transmission line extending from the Borah
Substation to the Bridger Substation.

“Borah-Ben Lomond Line” means the 345 kV transmission line extending from the
Borah Substation to the Ben Lomond Substation.

“Borah-Populus Lines” means the two (2) 345 kV transmission lines extending from
the Borah Substation to the Populus Substation.

“Bridger Substation” means the existing substation located near Rock Springs,
Wyoming, which is jointly owned by Idaho Power and PacifiCorp.

“Business Days” means any day except a Saturday, Sunday and any day which is a
legal holiday or a day on which banking institutions in New York, New York are
authorized or obligated by Governmental Requirements to close.

“Capacity Share” has the meaning given to such term in Section 4.02.

“Capital Upgrade Notice” has the meaning given to such term in Section 7.01.

“Claims” has the meaning given to such term in Section 14.01(a).

“Closing Date” has the meaning given to such term in the JPSA.

“Code” has the meaning given to such term in Section 17.02.

“Commercially Reasonable Efforts” means the level of effort that a reasonable
electric utility would take in light of the then known facts and circumstances
to accomplish the required action at a then commercially reasonable cost (taking
into account the benefits to be gained thereby).

                                                                             

--------------------------------------------------------------------------------

 

 

 

 

 

“Common Facilities” has the meaning given to such term in the recitals.

“Construction Budget” has the meaning given to such term in Section 3.05(b).

“Construction Costs” has the meaning given to such term in Section 3.05(a).

“Construction Costs Cap” has the meaning given to such term in Section 3.05(b).

“Construction Project” has the meaning given to such term in Section 3.01(a).

“Continuing Owner” has the meaning given to such term in Section 8.03.

“Costs” means, with respect to the Operator’s construction of facilities
pursuant to this Agreement, including the Transmission Facilities and capital
upgrades and improvements thereto, or such construction on behalf of the
Operator, the Operator’s actual cost of (i) preliminary surveys and
investigations and property acquisitions in connection with such facilities and
(ii) the development, design, engineering, procurement and construction of such
facilities, including an allowance for funds used during construction and
applicable overheads determined in accordance with the Operator’s customary
practices, as calculated in accordance with FERC’s Uniform System of Accounts.

“Damaged Facilities” has the meaning given to such term in Section 8.01.

“Damage Notice” has the meaning given to such term in Section 8.01.

“Decommissioning Notice” has the meaning given to such term in Section 9.03.

“Defaulting Owner” has the meaning given to such term in Section 12.01.

“Delegate” has the meaning given to such term in Section 5.04.

“Dispute” has the meaning given to such term in Section 18.01.

“Dispute Notice” has the meaning given to such term in Section 18.02.

“Disputing Party” has the meaning given to such term in Section 18.02.

“Electing Owner” has the meaning given to such term in Section 7.01(a).

“Event of Default” has the meaning given to such term in Section 12.01.

“Execution Date” has the meaning given to such term in the preamble.

“Executive(s)” has the meaning given to such term in Section 18.03(a).

 “FERC” means the Federal Energy Regulatory Commission.

“FERC Methodology” has the meaning given to such term in Section 5.08(b).

                                                                             

--------------------------------------------------------------------------------

 

 

 

 

 

“FERC Uniform System of Accounts” means the Uniform System of Accounts
Prescribed for Public Utilities and Licensees Subject to the Jurisdiction of the
Federal Power Act prescribed by FERC, and codified as of the Execution Date at
18 C.F.R. Part 101, as the same may be amended from time to time.

“Force Majeure” has the meaning given to such term in Section 11.01.

“Good Utility Practice” means any of the practices, methods and acts engaged in
or approved by a significant portion of the electric utility industry during the
relevant time period, or any of the practices, methods and acts which, in the
exercise of reasonable judgment in light of the facts known at the time the
decision was made, would have been expected to accomplish the desired result at
a reasonable cost consistent with good business practices, reliability, safety
and expedition.  Good Utility Practice is not intended to be limited to the
optimum practice, method, or act to the exclusion of all others, but rather to
be acceptable practices, methods, or acts generally accepted in the region,
including those practices required by Federal Power Act section 215(a)(4), 16
U.S.C. § 824o(a)(4)(2006).

“Governmental Authority” means any federal, state, local or municipal
governmental body; any governmental, quasi-governmental, regulatory or
administrative agency, commission, body or other authority exercising or
entitled to exercise any administrative, executive, judicial, legislative,
policy, regulatory or taxing authority or power, including FERC, NERC or any
regional reliability council; or any court or governmental tribunal, in each
case, having jurisdiction over either Owner (including PacifiCorp in its
capacity as Operator) or any of its Affiliates or the ownership, use, operation
and maintenance, repair and reconstruction, or retirement and decommissioning of
all or a portion of the Transmission Facilities.

“Governmental Authorizations” means any license, permit, order, approval,
filing, waiver, exemption, variance, clearance, entitlement, allowance,
franchise, or other authorization from or by a Governmental Authority.

“Governmental Requirements” means all laws, statutes, ordinances, rules,
regulations, codes, and similar acts or promulgations or other legally
enforceable requirements of any Governmental Authority.

“Idaho Power” has the meaning given to such term in the preamble.

“Idaho Power Transmission System” means the transmission facilities owned,
controlled or operated by Idaho Power that are used to transmit electricity to
Idaho Power’s retail and wholesale electric service customers.

“Indemnified Party” has the meaning given to such term in Section 14.01(a).

“Indemnifying Party” has the meaning given to such term in Section 14.01(a).

“Interconnection” means the interconnection of the Populus Substation with (i)
the Borah-Populus Lines, (ii) the Ben Lomond-Populus Lines, (iii) the
Kinport-Populus Line, and

                                                                             

--------------------------------------------------------------------------------

 

 

 

 

 

(iv) the Populus-Bridger Lines at the Point of Interconnection, in each case, as
more specifically described in the one-line diagram set forth in Exhibit G.

 “Interconnection Customer” has the meaning given to such term in the applicable
Owner’s OATT.

“Interconnection Owner” has the meaning given to such term in Section 6.03.

 “Interrupting Owner” has the meaning given to such term in Section 10.05(c).

“Jointly-Developed Transmission Facilities” has the meaning given to such term
in the recitals.

“JPSA” has the meaning given to such term in the recitals.

“Kinport-Bridger Line” means the 345 kV transmission line extending from the
Kinport Substation to the Bridger Substation.

“Kinport-Populus Line” means the 345 kV transmission line extending from the
Kinport Substation to the Populus Substation.

“Kinport Substation” means the existing substation located near Pocatello,
Idaho, which is owned by Idaho Power.

“Losses” mean any and all damages and losses, deficiencies, liabilities, taxes,
obligations, penalties, judgments, settlements, claims, payments, fines,
interest, costs and expenses, whether or not resulting from third party claims,
including the costs and expenses of any and all actions and demands,
assessments, judgments, settlements and compromises relating thereto and the
costs and expenses of attorneys’, accountants’, consultants’ and other
professionals’ fees and expenses incurred in the investigation or defense
thereof or the enforcement of rights hereunder and costs and expenses of
remediation (including, in the case of remediation, all expenses and costs
associated with financial assurance); provided, however, that in no event shall
Losses include lost profits or damages and losses excluded under Section 14.08.

 

“Manager” has the meaning given to such term in Section 18.03(a).

“Metering Equipment” means all metering facilities and equipment, including
meters, to be constructed and installed as part of the Transmission Facilities,
as further described in Exhibit A.

“Monthly Common Facilities Charge” has the meaning set forth in Exhibit F.

“Monthly Transmission Facilities O&M Charge” has the meaning set forth in
Exhibit F.

“NERC” means the North American Electric Reliability Council.

“Non-Defaulting Owner” means an Owner that is not a Defaulting Owner.

                                                                             

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“Non-Operating Owner” means Idaho Power.

“OATT” means, with respect to each Owner, the Owner’s Open Access Transmission
Tariff on file with FERC.

“Operator” means PacifiCorp, in its capacity as Operator under this Agreement.

“Other Costs” has the meaning given to such term in Section 5.08(a).

“Other Costs Records” has the meaning given to such term in Section 5.06(b).

“Owner” and “Owners” has the meaning given to such term in the preamble.

“Ownership Interest” means the tenant-in-common undivided ownership interest of
an Owner in the Transmission Facilities which is set forth on Exhibit C, as the
same may be adjusted from time to time pursuant to Exhibit C.

“PacifiCorp” has the meaning given to such term in the preamble.

“PacifiCorp Individually-Owned Populus Facilities” has the meaning given to such
term in the recitals.

“PacifiCorp Transmission System” means the transmission facilities owned,
controlled or operated by PacifiCorp that are used to transmit electricity to
PacifiCorp’s retail and wholesale electric service customers.

“Party” means PacifiCorp or Idaho Power individually, and “Parties” means
PacifiCorp and Idaho Power collectively.

“Person” means an individual, partnership, corporation, limited liability
company, joint venture, association, trust, unincorporated organization,
Governmental Authority, or other form of entity.

“Point of Interconnection” means the points of interconnection between the
Transmission Facilities and PacifiCorp’s Transmission System, as described in
the one-line diagram set forth in Exhibit G.

“Populus Access Easement Agreement” means the Populus Access Easement Agreement,
dated as of approximately even date herewith, entered into by Idaho Power and
PacifiCorp.

“Populus-Bridger Lines” means the two (2) 345 kV transmission lines extending
from the Populus Substation to the Bridger Substation.

“Populus Substation” has the meaning given to such term in the recitals.

“Proprietary Information” has the meaning given to such term in Section 15.06.

 

                                                                             

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“Qualified Owner” means an Owner that has an OATT on file with FERC under which
it is authorized to provide transmission service on its transmission system.

“Reduction Event” has the meaning given to such term in Section 6.02.

“Regulations” has the meaning given to such term in Section 17.02.

“Reliability Standards” means all reliability criteria for system users
established by WECC or such other regional or national standard setting body
with authority to promulgate or set such criteria (including NERC’s reliability
standards), as such criteria may be adopted or modified from time to time.

“Remaining Owner” has the meaning given to such term in Section 9.03.

“Representatives” means, in respect of an Owner or Operator, the directors,
officers, shareholders, partners, members, employees, agents, consultants,
contractors or other representatives of such Owner or Operator.

“Rights-of-Way” means all rights-of-way, easements and other interests
(including fee interests) in real property on which the Transmission Facilities
are or will be constructed that are owned by PacifiCorp or its Affiliates.

“Tax Indemnifying Party” has the meaning given to such term in Section 17.04.

“Tax Indemnitee Party” has the meaning given to such term in Section 17.04.

“Taxes” has the meaning given to such term in Section 17.03.

“Term” has the meaning given to such term in Section 2.03.

“Transferee” has the meaning given to such term in Section 15.01.

“Transferor” has the meaning given to such term in Section 15.01.

“Transferred Transmission Facilities” has the meaning given to such term in the
recitals.

“Transmission Facilities” has the meaning given to such term in the recitals.

“Transmission Facilities Contracts” means (i) the “Populus Substation Facilities
Contracts” as defined in the JSPA and (ii) each agreement, instrument or other
contract relating to or in connection with the Transmission Facilities that the
Operator enters into pursuant to this Agreement.

 

“Transmission System” means, in the case of PacifiCorp, the PacifiCorp
Transmission System, and, in the case of Idaho Power, the Idaho Power
Transmission System.

“Unauthorized Use” means the unauthorized use of the generation or transmission
facilities of any other Person.

                                                                             

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“WECC” means the Western Electricity Coordinating Council or any successor
thereto.

“WIS Agreement” has the meaning given to such term in Section 14.08(b).

1.02          Rules of Construction.

  The following rules of interpretation shall apply in this Agreement:

(a)        The masculine shall include the feminine and neuter.

(b)        References to “Articles,” “Sections” and “Exhibits” shall be to
articles, sections and exhibits of this Agreement.

(c)        The Exhibits attached hereto are incorporated in and are intended to
be a part of this Agreement.

(d)       This Agreement was negotiated and prepared by both Parties with the
advice and participation of counsel.  The Parties have agreed to the wording of
this Agreement and none of the provisions hereof shall be construed against one
Party on the ground that such Party is the author of this Agreement or any part
hereof.

(e)        Each reference in this Agreement to any agreement or document or a
portion or provision thereof shall be construed as a reference to the relevant
agreement or document as amended, supplemented or otherwise modified from time
to time with the written approval of both the Parties.

(f)        Each reference in this Agreement to Governmental Requirements and to
terms defined in, and other provisions of, Governmental Requirements shall be
references to the same (or a successor to the same) as amended, supplemented or
otherwise modified from time to time.

(g)        The term “day” shall mean a calendar day, the term “month” shall mean
a calendar month, and the term “year” shall mean a calendar year.  Whenever an
event is to be performed, a period commences or ends, or a payment is to be made
on or by a particular date and the date in question falls on a day which is not
a Business Day, the event shall be performed, or the payment shall be made, on
the next succeeding Business Day; provided, however, that all calculations shall
be made regardless of whether any given day is a Business Day and whether or not
any given period ends on a Business Day.

(h)        Each reference in this Agreement to a Person includes its successors
and permitted assigns; and each reference to a Governmental Authority includes
any Governmental Authority succeeding to its functions and capacities.

(i)         In this Agreement, the words “include,” “includes” and “including”
are to be construed as being at all times followed by the words “without
limitation.”

(j)         The words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall, unless otherwise specified, refer to
this Agreement as a whole and not to any particular provision of this Agreement.

                                                                             

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ARTICLE II
TERM

2.01     Effectiveness of this Agreement.  This Agreement shall become effective
upon the Execution Date.

2.02     FERC Filing.  Within five (5) Business Days after the Execution Date,
the Operator, on behalf of the Owners, shall file this Agreement with FERC as a
“Rate Schedule” within the meaning of Part 35 of FERC’s regulations.  Each of
the Owners shall support this Agreement in its current form at FERC when filed. 
Each Owner shall reasonably cooperate with the Operator with respect to
obtaining FERC approval of such FERC filing and provide any information,
including testimony, reasonably required by the Operator to comply with the
applicable FERC filing requirements.

2.03     Term.  The term of this Agreement (“Term”) shall commence upon the
Execution Date and shall continue in full force and effect until terminated in
accordance with the provisions hereof.

2.04          Termination.

  Subject to Section 2.05, this Agreement shall terminate if one or more of the
following events occur:

(a)        the Transmission Facilities are damaged and destroyed and the Owners
decide not to repair or rebuild (or cannot reach agreement to repair or rebuild)
the Damaged Facilities in accordance with Article VIII;

(B)        THE TRANSMISSION FACILITIES ARE RETIRED AND DECOMMISSIONED IN
ACCORDANCE WITH ARTICLE IX;

(C)        ALL OF THE OWNERSHIP INTERESTS IN THE TRANSMISSION FACILITIES ARE
OWNED BY ONLY ONE OWNER;

(D)       BY MUTUAL WRITTEN AGREEMENT OF THE OWNERS; OR

(E)        THIS AGREEMENT IS TERMINATED BY EXERCISE OF REMEDIES PURSUANT TO
SECTION 12.03.

2.05     Effect of Termination.

(a)        If this Agreement is terminated pursuant to Section 2.04, then,
except as for those provisions that are expressly intended to survive
termination and, subject to Section 2.05(b) and receipt of any necessary
Governmental Authorizations required by applicable Governmental Requirements,
this Agreement shall terminate and become void and of no further force and
effect, without further action by either Party, provided that neither Party
shall be relieved from any of its obligations or liabilities hereunder accruing
prior thereto.

(b)        In the event that this Agreement is terminated pursuant to Section
2.04 and the Non-Operating Owner continues to own all or a portion of the
Ownership Interests in the Transmission Facilities, then:  (i) the Operator
shall, upon written notice from the Non-Operating

 

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Owner delivered to the Operator no later than fifteen (15) Business Days after
termination of this Agreement pursuant to Section 2.04, continue to perform such
of its obligations and covenants in Articles VI, VII, VIII, X and XVI as are set
forth in the notice; (ii) such obligations and covenants, together with Articles
V, VI, VII, VIII, XI, X, XII, XIV, XV, XVIII, XIX and XX (to the extent
applicable to the surviving covenants and obligations), shall continue in full
force and effect notwithstanding the termination of this Agreement; and (iii)
the Parties shall amend this Agreement to reflect such changes to this Agreement
as shall be necessary and mutually acceptable to the Parties to conform this
Agreement to the surviving provisions of this Agreement in accordance with this
Section 2.05(b).
 

ARTICLE III
CONSTRUCTION

3.01     Engineering, Design and Construction of the Jointly-Developed
Transmission Facilities.

(a)        The Operator shall design, engineer, procure, construct, install,
manage and perform all other activities necessary for the development,
construction and commissioning of the Jointly-Developed Transmission Facilities
in accordance with Good Utility Practice and applicable Governmental
Requirements and Governmental Authorizations (the “Construction Project”).

(b)        The Operator shall use Commercially Reasonable Efforts to achieve
each of the milestones by its respective milestone date as set forth in Exhibit
H.  The Operator shall provide the Owners with prompt written notice of the date
upon which it has achieved each milestone.

3.02     Interconnection.  PacifiCorp shall grant the Operator such access to
the Kinport-Bridger Line and Borah-Bridger Line during the requested outage
period to enable the Operator to interconnect the Transmission Facilities with
the Populus Substation.  The Owners and the Operator recognize the need to use
Commercially Reasonable Efforts to expedite all work with all due diligence,
consistent with Good Utility Practice, so as to minimize outage times.

3.03     Rights-of-Way.  The Operator shall maintain the Rights-of-Way in
accordance with Good Utility Practice and applicable Governmental Requirements
and Governmental Authorizations and without adverse distinction between the
Owners.

3.04     Monthly Reports.  Each month prior to the final completion and
commissioning of the Transmission Facilities, the Operator shall prepare and
deliver to the Owners reasonably detailed status reports, in form and substance
reasonably acceptable to the Owners, regarding the implementation of the
Construction Project, including (i) any expected delays (and their duration) in
achieving any milestone by the respective milestone date as set forth on Exhibit
H and (ii) the aggregate amount of Construction Costs incurred to date compared
to the budgeted amount of Construction Costs set forth in the Construction
Budget.

                                                                             

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3.05     Development and Construction Costs.

(a)        Each Owner shall be responsible for, and shall pay, in accordance
with this Section 3.05, its pro rata share (based on its Ownership Interest) of
all Costs (up to the Construction Costs Cap) actually incurred by or on behalf
of the Operator in the performance of the Construction Project pursuant to
Article III or otherwise incurred by or on behalf of PacifiCorp in the
construction of the Transmission Facilities (collectively, the “Construction
Costs”).

(b)        The Operator shall promptly notify the Owners in writing if it
reasonably believes that the total Construction Costs to be incurred by or on
behalf of the Operator or otherwise incurred by or on behalf of PacifiCorp in
the construction of the Transmission Facilities will exceed the greater of (i)
five percent (5%) of the aggregate amount of Construction Costs provided for in
the budget attached hereto as Exhibit E (the “Construction Budget”), as the same
may be revised from time to time pursuant to this Section 3.05(b), and (ii) One
Million Four Hundred Thousand Dollars ($1,400,000) (the “Construction Costs
Cap”).  Thereafter, the Operator shall submit to the Owners for their approval,
such approval not to be unreasonably withheld or delayed, a revised Construction
Budget which shows the aggregate amount of Construction Costs that the Operator
reasonably believes will be incurred by or on behalf of the Operator to complete
the Construction Project in accordance with Article III or otherwise incurred by
or on behalf of PacifiCorp in the construction of the Transmission Facilities. 
The notice and approval rights set forth above in this Section 3.05(b) shall
apply to the revised Construction Budget as well.  Notwithstanding anything to
the contrary contained in this Agreement, in no event shall the Operator be
obligated to incur Construction Costs in excess of the Construction Costs Cap.

(c)        The Operator shall provide the Owners with invoices showing each
Owner’s pro rata share (based on its Ownership Interest) of the Construction
Costs, and the Non-Operating Owner shall pay the Operator its pro rata share
(based on its Ownership Interests) of the Construction Costs, in accordance with
Section 5.08 and Section 5.09.

ARTICLE IV
OWNERSHIP INTERESTS

4.01     Ownership Interests.

(a)        Pursuant to the JPSA, as of the Closing Date, each Owner owns an
undivided ownership interest, equal to its Ownership Interest, in the
Transmission Facilities.

(b)        The Owners agree that they shall enter into such additional
documentation as shall reasonably be required to document any change in the
Ownership Interests of the Owners contemplated hereby, provided that in no event
shall an Owner be responsible for paying any amount to the other Owner as a
result of any change in any Ownership Interest or the Transmission Facilities
except as expressly provided for in this Agreement or as otherwise agreed to by
the Parties in writing.

 

 

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4.02     Owner’s Capacity Share.

  Each of the Owners shall be entitled to a pro rata share (based on its
Ownership Interest) of the bi-directional transmission capacity of the
Transmission Facilities (“Capacity Share”).  Subject to Section 6.02, each
Owner’s Capacity Share entitles the Owner to provide and schedule transmission
service over the Transmission Facilities to the extent of the Owner’s Capacity
Share and to schedule and transmit an amount of energy commensurate with the
Owner’s Capacity Share over the Transmission Facilities on its own behalf or on
behalf of the Owner’s transmission customers; provided, however, that at no time
shall an Owner be entitled to post, sell, schedule or transmit more than its
Capacity Share of transmission capacity (and a commensurate amount of energy) on
the Transmission Facilities, unless otherwise mutually agreed to in writing by
the Owners.  Any use of the Transmission Facilities, other than as provided for
in this Section 4.02, shall be subject to the prior written approval of both
Owners.

4.03     Qualified Owner.

 Each Owner shall take all actions required to continue to be a Qualified Owner
during the Term.  If at any time during the Term an Owner ceases to be a
Qualified Owner, then such Owner shall immediately provide notice thereof to the
other Owner and take all actions required to resume being a Qualified Owner.

4.04     No Right to Use.

  For the avoidance of doubt, the provisions of this Agreement shall not confer
upon either Owner the right to use or transmit energy over any transmission
facilities owned by the other Owner (other than the Transmission Facilities as
provided for herein).

4.05     Payments.

  All payments required to be made by or on behalf of the Owners under the terms
of this Agreement, including payments to the Operator of the Monthly
Transmission Facilities O&M Charge, the Monthly Common Facilities Charge and
Other Costs, shall be made to the account or accounts designated by the Owner or
Operator to which the payment is owed, by wire transfer (in immediately
available funds in the lawful currency of the United States).

4.06     Waiver of Partition Rights.

  The Owners shall own their undivided Ownership Interests in the Transmission
Facilities as tenants-in common.  The Owners acknowledge that any exercise of
the remedy of partition (whether at law or in equity) of the Transmission
Facilities or any portion thereof would be impracticable in view of the purposes
and requirements of this Agreement, would violate the spirit and intent of this
Agreement, and would defeat the Owners’ intentions and reasonable expectations
as well as the consideration upon which each Owner entered into this Agreement. 
Accordingly, each Owner agrees that during the Term it (a) will not, directly or
indirectly, commence, maintain, support or join in any action or proceedings of
any kind to partition the Transmission Facilities or any portion thereof, and
(b) waives, after consultation with its qualified legal counsel, any and all
rights that it may have under this Agreement or applicable Governmental
Requirements (whether at law or in equity) or otherwise to commence, maintain,
support or join in any such action or proceeding.  Each Owner acknowledges that
the other Owner has entered into and will perform the terms of this Agreement in
reliance upon the other Owner’s agreement and adherence to the terms of this
Section 4.06, and would not have entered into this Agreement but for such
reliance; and that it would be unjust and inequitable for any Owner to violate
or to seek relief from any provision of this Section 4.06.

                                                                             

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ARTICLE V
OPERATOR

5.01     Appointment of Operator.

(a)        The Owners hereby appoint PacifiCorp, and PacifiCorp hereby accepts
appointment, to serve as Operator of the Transmission Facilities and the Common
Facilities for the Owners and to perform the other covenants and obligations of
the Operator expressly set forth in this Agreement, in accordance with the terms
and conditions of this Agreement.

(b)        Notwithstanding anything to the contrary contained in this Agreement
or Governmental Requirements, the Owners agree that the Operator shall have no
obligations, responsibilities or duties to the Owners other than as are
expressly provided for in this Agreement.

5.02     Authority of Operator.

(a)        The Operator shall be responsible in all respects for the
construction of the Jointly-Developed Transmission Facilities and the operation
and maintenance of the Transmission Facilities and the Common Facilities in
accordance with Article III and Articles V-X.  Without limiting the foregoing,
the Operator shall supervise and perform, or cause to be supervised and
performed:  (i) the construction of the Jointly-Developed Transmission
Facilities in accordance with Article III and this Article V, (ii) the physical
operation and maintenance of, interconnection to, design of, capital upgrades
and improvements to, repair and reconstruction of, and retirement and
decommissioning of, the Transmission Facilities in accordance with this Article
V and Articles VI-X, and (iii) the physical operation and maintenance of the
Common Facilities in accordance with Section 6.04.  In the performance of its
obligations under this Agreement, the Operator shall have authority, subject to
the other terms of this Article V and Article III and Articles VI-X, to take any
or all of the actions it reasonably determines are necessary to perform its
obligations under this Agreement, including to make decisions on all matters
relating to and to contract for, select and purchase on behalf of the Owners all
materials, equipment and services (including from third-party consultants and
advisors) necessary for:  (A) the engineering, design and construction of the
Jointly-Developed Transmission Facilities pursuant to Article III, (B) the
physical operation and maintenance of the Transmission Facilities pursuant to
Article VI; (C) the interconnection of Interconnection Customers to the
Transmission Facilities pursuant to Section 6.03; (D) the development, design,
engineering, procurement, construction, permitting, completion, testing and
commissioning of capital upgrades or improvements to the Transmission Facilities
pursuant to Article VII; (E) the development, design, engineering, procurement,
construction, permitting, completion, testing and commissioning of repairs to
and reconstruction of the Transmission Facilities pursuant to Article VIII; and
(F) the retirement and decommissioning of the Transmission Facilities pursuant
to Article IX.

(b)        The Owners and the Operator agree that title to all Jointly-Developed
Transmission Facilities and capital upgrades and improvements constructed by or
on behalf of the Operator pursuant to Section 6.01 shall vest with the Owners
and shall be jointly owned by the Owners as tenants-in-common in accordance with
their respective Ownership Interests.  Title

                                                                             

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to all capital upgrades and improvements constructed by or on behalf of the
Operator pursuant to Section 7.01 shall vest with and be owned by the Owners in
accordance with Section 7.01.

(c)        The Operator will exercise or enforce all of PacifiCorp’s benefits,
rights and remedies under the Transmission Facilities Contracts for the benefit
of the Owners pro rata (in accordance with their respective Ownership Interests)
and without adverse distinction between the Owners.  In furtherance and not in
limitation of the immediately preceding sentence, the Operator agrees to
transfer, assign, distribute, pay over or otherwise make available to the
Non-Operating Owner, the Non-Operating Owner’s pro rata share (based on its
Ownership Interest) in any payments or proceeds obtained pursuant to any
Transmission Facilities Contract.  Notwithstanding anything to the contrary
contained in this Agreement, the Owners agree that only the Operator shall be
entitled to exercise or enforce PacifiCorp’ benefits, rights and remedies under
the Transmission Facilities Contracts.

5.03     Standard of Work.  The Operator shall perform all of its obligations
under this Agreement as an independent contractor and in accordance with Good
Utility Practice and applicable Governmental Requirements and Governmental
Authorizations and without adverse distinction between the Owners.

5.04     Delegation of Responsibilities.  The Operator may, in its sole and
absolute discretion, delegate all or a portion of its obligations under this
Agreement to one or more Persons (each, a “Delegate”).  Notwithstanding any such
delegation, the Operator shall remain responsible and liable for all such
delegated obligations in accordance with the terms of this Agreement.

5.05     Governmental Authorizations.

(a)                The Operator is authorized to prepare and submit to all
appropriate Governmental Authorities the necessary reports, applications, plans,
specifications and other documents to procure all Governmental Authorizations
required to perform its obligations under this Agreement with respect to the
Transmission Facilities or to comply with Governmental Requirements, provided
that the Operator shall consult with the Owners prior to the submission of any
such reports, application, plans, specification and other documents.  To the
extent permitted by Governmental Requirements, the Operator shall use
Commercially Reasonable Efforts to obtain and structure all Government
Authorizations for which it applies after the Execution Date in such a way as to
recognize each Owner’s applicable Ownership Interests and Capacity Share as
contemplated by this Agreement.  Notwithstanding anything to the contrary in
this Agreement, nothing in Section 5.05 shall obligate the Operator to prepare
and submit to appropriate Governmental Authorities any reports, applications,
plans, specifications and other documents to procure any Governmental
Authorizations required by the Owners in connection with their ownership of an
Ownership Interest in the Transmission Facilities or the recovery of any costs
and expenses in connection therewith.

(b)               To the extent that the Operator cannot obtain a Governmental
Authorization pursuant to Section 5.05(a) on behalf of one or both of the
Owners, each such Owner shall:  (i) be responsible for preparing and submitting
to the appropriate Governmental Authority the necessary reports, applications,
plans, specifications and other documents to

                                                                             

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procure such Governmental Authorization; and (ii) exercise all Commercially
Reasonable Efforts to obtain such Governmental Authorization.  Unless and until
the Owner or Owners are able to obtain such Governmental Authorizations, the
Operator shall not perform or continue to perform any of the Construction
Project if to do so would result in the Owner or Owners being in violation of
applicable Governmental Requirements or Governmental Authorizations.
 

(c)                Each Owner shall, at its own cost: (i) reasonably cooperate
and support the Operator in obtaining any Governmental Authorizations required
pursuant to Section 5.05(a); and (ii) reasonably respond to inquiries or
requests issued to it by any Governmental Authority in respect of such
Governmental Authorization; provided, however, that an Owner shall not be
obligated pursuant to this Section 5.05(c) to disclose Proprietary Information
except to the extent that it is otherwise required to disclose such Proprietary
Information:  (A) by applicable Governmental Requirements; (B) by any
Governmental Authority; or (C) pursuant to the express terms of this Agreement.

5.06     Access.

(a)        The Operator shall, to the extent possible under any Rights-of-Ways,
provide each Owner and its designees reasonable access to the Transmission
Facilities site to permit the Owners and their designees to inspect the
construction, commissioning, operation and maintenance, capital upgrades and
improvements to, repair and reconstruction of, and retirement and
decommissioning of the Transmission Facilities, provided that (i) the Owners and
their designees do not interfere with the construction, commissioning, operation
and maintenance, capital upgrades and improvements to, repair and reconstruction
of, and retirement and decommissioning of the Transmission Facilities or any
portion thereof or pose a safety hazard; (ii) the Owners and their designees
comply with any requirements of any rights-of-ways, license, easement or other
real property interest agreement applicable to the Transmission Facilities; and
(iii) the Owners and their designees performing the inspection comply with the
Operator’s or any other contractor’s safety and security rules, as more
specifically set out in the Populus Access Easement Agreement.

(b)        Each Owner may, at its cost, at any time during normal business hours
and with reasonable prior notice of not less than ten (10) Business Days, but
not more often than once in any twelve (12) month period, inspect and audit the
books and records of the Operator and any of its Affiliates and any Delegate
(and the Operator shall secure such rights for the Owners from its Affiliates
and any Delegate) involved in the provision of services pursuant to this
Agreement (“Other Costs Records”), to the extent reasonably relating to the
determination of the Other Costs for which the Owners are liable under this
Agreement as shown on an invoice provided to the Owners pursuant to Section 5.08
within twelve (12) months prior to the date of the audit notice.  The Operator
shall, and shall cause any of its relevant Affiliates and any Delegate, to keep
and maintain all such Other Costs Records to the extent reasonably relating to
the determination of the Other Costs for which the Owners are liable under this
Agreement and make such Other Costs Records available to the Owners in
accordance with the terms of this Agreement.  If any audit discloses that,
during such twelve (12)-month period, an overpayment or underpayment of Other
Costs has been made by the Non-Operating Owner or the amount of any Other Costs
allocated to the Owners on an invoice is incorrect, then such overpayment,
underpayment or incorrect amount shall be resolved pursuant to Section 5.09. 
The Owner

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requesting the audit shall reimburse one hundred percent (100%) of all
reasonable costs and expenses (including internal costs and expenses) incurred
by or on behalf of the Operator and any of its Affiliates and any Delegate in
complying with the provisions of this Section 5.06(b), provided that the Owner
shall not be required to reimburse any such costs if the audit determines that
the Owner has made more than Twenty-Five Thousand Dollars ($25,000) in
overpayments of Other Costs or more than Twenty-Five Thousand Dollars ($25,000)
in Other Costs have been incorrectly allocated to the Owner.

5.07     Insurance.

(a)        Owner Insurance.  Each of the Owners shall be responsible for
obtaining and maintaining during the Term insurance covering their respective
legal liabilities related to their Ownership Interest in the Transmission
Facilities.  Insurance required by this Section 5.07(a) will be placed with
appropriate carriers and in amounts in accordance with Good Utility Practice and
any applicable Governmental Requirements.

(b)        Property Insurance.

(i)         The Operator, on behalf of the Owners and any other named insureds
or loss payees, will:  (A) determine the appropriate property insurance
coverages, minimum amounts, self-insured amounts, deductibles and other
insurance policy terms; (B) obtain and maintain such property insurance during
the Term; and (C) be solely responsible for pursuing claims and/or negotiating
settlements in respect of claims under such insurance coverages.  The Operator
shall be compensated for the costs of obtaining and maintaining such insurance
(including any premiums, taxes, and fees, deductibles, self-insurance or
non-insured costs) through the Monthly Transmission Facilities O&M Charge.

(ii)        Physical damage to substations and equipment therein that is
included as part of the Transmission Facilities in types and amounts that are
reasonable and customary for similarly situated utilities.  Coverage may be
insured or self-insured, or any combination of insured and self-insured.

(iii)       Insurance for physical damage to the transmission line and any
related equipment outside the boundaries of any substation and included as part
of the Transmission Facilities shall be fully self-insured.

5.08     Invoices.

(a)        The Non-Operating Owner shall pay the Operator the Monthly
Transmission Facilities O&M Charge and the Monthly Common Facilities Charge
calculated in accordance with Exhibit F as compensation for the Operator’s
services under this Agreement.  Each Owner shall be responsible for its pro rata
share (based on its Ownership Interest, unless the Owners have agreed in writing
otherwise) of costs incurred by or on behalf of the Operator under Sections
3.05(a), 6.01(c), 7.01(b), 8.01, 8.05(b), 9.02 and 17.03 (the “Other Costs”). 
In the event that the Operator incurs, or reasonably expects to incur,
significant Other Costs (other than Construction Costs) in excess of One Hundred
Thousand Dollars ($100,000), it shall immediately notify the Owners in writing
of such Other Costs.

                                                                             

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(b)        Not later than thirty (30) days after the end of each month during
the Term, the Operator will deliver to the Owners an invoice which will show the
Monthly Transmission Facilities O&M Charge and Monthly Common Facilities Charge
payable by the Non-Operating Owner and each Owner’s pro rata share (based on its
Ownership Interest, unless the Owners have agreed in writing otherwise) of Other
Costs.  The Non-Operating Owner shall pay the Monthly Transmission Facilities
O&M Charge, the Monthly Common Facilities Charge, and its pro rata share (based
on its Ownership Interest, unless the Owners have agreed in writing otherwise)
of Other Costs shown on the invoice no later than thirty (30) days after the
date of the invoice.  Any payment past due will accrue interest, per annum,
calculated in accordance with the methodology specified for interest in the FERC
regulations at 18 C.F.R. § 35.19a(a)(2)(iii) (the “FERC Methodology”).  The
failure by the Operator to timely deliver an invoice shall not relieve Idaho
Power of its payment obligation in respect of the Monthly Transmission
Facilities O&M Charge, Monthly Common Facilities Charge and Other Costs as shown
on such invoice, or release PacifiCorp of its responsibility for its share of
the Other Costs in such invoice.

5.09     Disputed Amounts.  If the Non-Operating Owner disputes any portion of
any amount specified in an invoice delivered by the Operator pursuant to Section
5.08, the Non-Operating Owner shall pay its total amount of the invoice when
due, and, if actually known at the time by the Non-Operating Owner, identify the
disputed amount and state that the disputed amount is being paid under protest. 
Any disputed amount shall be resolved pursuant to the provisions of Article
XVIII.  If it is determined pursuant to Article XVIII that an overpayment or
underpayment has been made by the Non-Operating Owner or the amount of any Other
Costs allocated to the Owners on an invoice is incorrect, then (i) in the case
of any overpayment by the Non-Operating Owner, the Operator shall promptly
return the amount of the overpayment (or credit the amount of the overpayment on
the next invoice) to the Non-Operating Owner, (ii) in the case of an
underpayment by the Non-Operating Owner, the Non-Operating Owner shall promptly
pay the amount of the underpayment to the Operator (for the benefit of the other
Owner), and (iii) in the case of an incorrect allocation of Other Costs to an
Owner, the allocations of Other Costs on the next invoice shall be adjusted to
correct for such incorrect allocation, in each case, together with interest for
the period from the date of overpayment, underpayment or incorrect allocation
until such amount has been paid or credited against a future invoice calculated
in the manner prescribed for calculating interest on refunds under the FERC
Methodology.

5.10     Assistance.  Each Owner shall cooperate with the Operator promptly, as
and when reasonably requested by the Operator, to assist the Operator in the
performance of its duties, responsibilities and obligations under this
Agreement, including executing and delivering from time to time such additional
documents, certificates or instruments, and taking such additional actions, as
may be reasonably requested by the Operator.  Each Owner shall bear its own
costs for providing such cooperation and assistance as requested by the Operator
unless the Owners agree otherwise in writing.  Nothing in this Agreement shall
preclude an Owner from exercising any rights expressly granted it under this
Agreement or taking any action (or having its Affiliates take any action) with
respect to any other transmission project, including any such project that may
compete with the Transmission Facilities.

                                                                             

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5.11     Remedies.

(a)        Notwithstanding any provision to the contrary contained in this
Agreement, the Operator shall have no liability to the Non-Operating Owner in
connection with the performance of its covenants and obligations under this
Agreement, except as provided in this Section 5.11 and Section 14.01(c).  The
Non-Operating Owner agrees that it has a duty to mitigate any damages and shall
use Commercially Reasonable Efforts to minimize any damages it may incur as a
result of the Operator’s failure to perform or breach of any of its covenants or
obligations under this Agreement.

(b)        The Owners and Operator acknowledge that the obligations and
covenants performed by the Operator hereunder are unique and that the
Non-Operating Owner will be irreparably injured should such obligations and
covenants not be performed in accordance with the terms and conditions of this
Agreement.  Consequently, the Non-Operating Owner will not have an adequate
remedy at law if the Operator shall fail to perform its obligations and
covenants hereunder.  The Non-Operating Owner shall have the right, in addition
to any other remedy available under this Agreement, to specific performance of
the Operator’s obligations and covenants hereunder, and the Owners and Operator
agree not to take a position in any proceeding arising out of this Agreement to
the effect that the Non-Operating Party has an adequate remedy at law.

ARTICLE VI
OPERATION AND MAINTENANCE; CURTAILMENT;
INTERCONNECTION WITH THIRD PARTIES; COMMON FACILITIES

6.01     Operation and Maintenance; Capital Upgrades and Improvements.

(a)        The Operator shall supervise and perform, or cause to be supervised
and performed, the physical operation and maintenance of the Transmission
Facilities in accordance with Good Utility Practice and applicable Governmental
Requirements and Governmental Authorizations and without adverse distinction
between the Owners.  Subject to Section 5.04, the Operator may utilize its
employees and supervisory personnel, and any independent technical advisors,
consultants, contractors and agents which it may select, as may be required to
perform the Operator’s obligations under this Section 6.01.

(b)        The Operator shall make maintenance renewals and replacements to the
Transmission Facilities (i) the costs of which are recordable as an operation
and maintenance expense under the FERC Uniform System of Accounts; and (ii) that
(A) are necessary for the operation of the Transmission Facilities in accordance
with Good Utility Practice, and/or (B) are required by applicable Governmental
Requirements and Governmental Authorizations.  Such maintenance renewals and
replacements to the Transmission Facilities are included in the services for
which the Operator is compensated by the Monthly Transmission Facilities O&M
Charge.  The Operator shall not separately invoice the Owners for the costs of
such maintenance renewals and replacements to the Transmission Facilities. 
Notwithstanding anything to the contrary contained in this Agreement, any
maintenance renewals and replacements made pursuant to this Section 6.01(b)
shall be Transmission Facilities for purposes of this Agreement.

 

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(c)        The Operator shall make capital upgrades and improvements to the
Transmission Facilities (i) the costs of which are recordable as capital
expenditures under the FERC Uniform System of Accounts, and (ii) which (A) are
necessary for the operation of the Transmission Facilities in accordance with
Good Utility Practice and/or (B) are required by applicable Governmental
Requirements and Governmental Authorizations.  The Operator shall consult with
the Owners and receive their prior approval, such approval not to be
unreasonably withheld, delayed or conditioned, with respect to any capital
upgrade or improvement for which the Operator reasonably expects to incur total
project costs that exceed Two Hundred Fifty Thousand Dollars ($250,000).  The
Owners shall be responsible for their pro rata share (based on their Ownership
Interests) of any Costs incurred by or on behalf of the Operator in making such
capital upgrades or improvements.  Notwithstanding anything to the contrary
contained in this Agreement, any capital upgrades and improvements made pursuant
to this Section 6.01(c) shall be Transmission Facilities for purposes of this
Agreement.

6.02     Curtailment.  The Operator shall notify the Owners as soon as
reasonably practicable upon becoming aware of any planned or unplanned event or
circumstance, including an emergency condition or a rating study to comply with
applicable Governmental Requirements or Reliability Standards, which physically
or otherwise reduces or may reduce the amount of transmission capacity on all or
a portion of the Transmission Facilities (“Reduction Event”), including the
aggregate amount of reduction in the transmission capacity of the Transmission
Facilities to the extent known by the Operator.  In the event of a Reduction
Event, the Operator shall take such actions as the Operator may reasonably deem
prudent and necessary to terminate the Reduction Event and to preserve and
maintain the reliability, safety, integrity and operability of the applicable
Transmission Facilities and to protect the health and safety of the public. 
Each of the Owners shall provide notice of each Reduction Event in accordance
with its respective OATT.

6.03     Interconnection with Third Parties.  The Owners acknowledge and agree
that all third-party Interconnection Customer requests for interconnection to
any of the Transmission Facilities must be coordinated with the Operator and
processed in a manner consistent with the Owner’s OATT to which the
Interconnection Customer’s request was made (“Interconnection Owner”).  An
Interconnection Owner in receipt of a third-party Interconnection Customer
request for interconnection with the Transmission Facilities will promptly
notify the Operator and thereafter the Owners and the Operator will coordinate
and cooperate to process the interconnection request.  The Operator will
coordinate the conduct of any studies required to determine the impact of the
interconnection request on the Transmission Facilities and the Affected Systems
with Affected System Operators, including the Owners, in accordance with the
Interconnection Owner’s OATT.  The Operator will include the Owners and such
Affected System Operators in all meetings held with Interconnection Customers as
required by the Interconnection Owner’s OATT.

6.04     Common Facilities.  The Operator shall make the Common Facilities
available to the Owners to support the operation of the Transmission Facilities
in accordance with the terms of this Agreement and without adverse distinction
between the Owners.  The Operator shall supervise and perform, or cause to be
supervised and performed, the physical operation and maintenance of the Common
Facilities in accordance with Good Utility Practice and applicable Governmental
Requirements and Governmental Authorizations and without adverse distinction

 

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between the Owners.  Subject to Section 5.04, the Operator may utilize its
employees and supervisory personnel, and any independent technical advisors,
consultants, contractors and agents which it may select, as may be required to
perform the Operator’s obligations under this Section 6.04.  The obligations
performed by the Operator pursuant to this Section 6.04 are included in the
services for which the Operator is compensated by the Monthly Common Facilities
Charge, and the Operator shall not separately invoice the Owners and the Owners
shall not be liable for any of the costs or expenses incurred by or on behalf of
the Operator pursuant to this Section 6.04.

ARTICLE VII
CAPITAL UPGRADES PROPOSED BY AN OWNER

7.01     Capital Upgrades.

(a)        At any time during the Term, an Owner (“Electing Owner”) may elect to
make a capital upgrade or improvement to the Transmission Facilities, provided
that in no event shall an Electing Owner be entitled to make a capital upgrade
or improvement to the Transmission Facilities that reasonably would be expected
to have a material adverse effect on the other Owner’s ownership, use or
enjoyment of its Ownership Interest of the Transmission Facilities (and
associated Capacity Share) as contemplated in this Agreement.  An Electing Owner
shall provide the other Owner no less than sixty (60) days’ prior written notice
of its election, together with reasonable details about the proposed upgrade or
improvement (each, a “Capital Upgrade Notice”).  Within sixty (60) days of
receipt of the Capital Upgrade Notice, the other Owner may notify the Electing
Owner in writing that it elects to participate in the capital upgrade or
improvement to the Transmission Facilities.

(i)         If the other Owner delivers notice to the Electing Owner within the
sixty (60) day period that it elects to participate in the capital upgrade or
improvement to the Transmission Facilities, then the Owners shall meet and agree
on: (A) the final scope of the capital upgrade or improvement; (B) the
allocation of increased transmission capacity, if any, associated with such
capital upgrade and improvement between the Owners, including any change in the
Owners’ Capacity Shares; (C) any change in each Owner’s Ownership Interest; (D)
each Owner’s share of the costs of such upgrade or improvement; (E) any change
in the Monthly Transmission Facilities O&M Charge; and (F) such other matters as
the Owners may agree upon, all of which shall be memorialized in an amendment to
this Agreement executed by the Owners, including any amendments to the Exhibits
hereto (the “Amendment”); provided, however, that any failure of the Owners to
agree on any of the matters specified in subparts (A) through (F) above shall be
resolved pursuant to the provisions of Article XVIII.  Notwithstanding any
provisions to the contrary in this Agreement, an Owner shall not be prohibited
from making a capital upgrade or improvement to the Transmission Facilities
pursuant to this Section 7.01(a) because the Owners fail to agree on any of the
matters specified in subparts (A) through (F) of the immediately preceding
sentence, and any such disagreement shall be resolved pursuant to Article XVIII.

(ii)        If the other Owner elects not to participate in the capital upgrade
or improvement to the Transmission Facilities (or fails to deliver a notice to
the Electing Owner within the sixty (60) day period), then the Electing Owner
may proceed with the capital upgrade

 

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or improvement, provided that the Electing Owner shall coordinate with the
Operator on the final scope of the capital upgrade or improvement.

(b)        The Operator shall design, permit, construct, install and commission
any upgrades or improvements to the Transmission Facilities provided for in
Section 7.01(a)(i) in accordance with the Amendment or, if applicable, any
resolution pursuant to Article XVIII, and otherwise in accordance with Good
Utility Practice and applicable Governmental Requirements and Governmental
Authorizations.  The Owners shall be responsible, based on the Amendment or, if
applicable, any resolution pursuant to Article XVIII, for all of the Costs
incurred by or on behalf of the Operator in connection with such capital upgrade
or improvement to the Transmission Facilities.  Effective as of the date of
successful commissioning of such capital upgrade or improvement, written notice
of which the Operator shall provide to the Owners, the Owners’ Ownership
Interests and Capacity Shares shall be adjusted, if at all, in accordance with
the Amendment or, if applicable, any resolution pursuant to Article XVIII, and
the Owners shall memorialize any revised Ownership Interests in a revised
Exhibit C which shall be effective as of the date of successful commissioning of
such upgrade or improvement.  Notwithstanding anything to the contrary contained
in this Agreement, any capital upgrades or improvements provided for in this
Section 7.01(b) shall be Transmission Facilities for purposes of this Agreement.

(c)        The Operator shall design, permit, construct, install and commission
any upgrades or improvements to the Transmission Facilities provided for in
Section 7.01(a)(ii) in accordance with the final scope of the capital upgrade or
improvement established by the Electing Owner pursuant to Section 7.01(a)(ii),
and otherwise in accordance with Good Utility Practice and applicable
Governmental Requirements and Governmental Authorizations.  The Electing Owner
shall be responsible for all of the Costs incurred by or on behalf of the
Operator in connection with such capital upgrade or improvement to the
Transmission Facilities and title to such capital upgrades or improvement shall
vest solely with the Electing Owner.  Effective as of the date of successful
commissioning of such capital upgrade or improvement, written notice of which
the Operator shall provide to the Owners, (i) the Owners’ Ownership Interests
shall be adjusted, if at all, in accordance with Exhibit C, (ii) the Owners
shall memorialize any revised Ownership Interests in a revised Exhibit C which
shall be effective as of the date of successful commissioning of such upgrade or
improvement, and (iii) the Operator shall operate and maintain such capital
upgrade or improvement in accordance with Section 6.01(a).  In addition, the
Owners shall meet and agree on: (A) the allocation of increased transmission
capacity, if any, associated with such capital upgrade and improvement between
the Owners, including any change in the Owners’ Capacity Shares; (B) any change
in the Monthly Transmission Facilities O&M Charge; and (C) such other matters as
the Owners may agree upon, all of which shall be memorialized in an amendment to
this Agreement executed by the Owners, including any amendments to the Exhibits
hereto; provided, however, that any failure of the Owners to agree on any of the
matters specified in subparts (A) through (C) above shall be resolved pursuant
to the provisions of Article XVIII.  Notwithstanding anything to the contrary
contained in this Agreement, any capital upgrades or improvements provided for
in this Section 7.01(c) shall not be Transmission Facilities for purposes of
this Agreement.

                                                                             

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(d)       Notwithstanding anything to the contrary contained herein, the
provisions of this Section 7.01 shall not apply to capital upgrades or
improvements made by the Operator pursuant to Section 6.01(c) which are
necessary for the operation of the Transmission Facilities in accordance with
Good Utility Practice or required by applicable Governmental Requirements or
Governmental Authorizations, which shall be governed by the provisions of
Section 6.01.

(e)        Each Owner shall provide the Operator prompt written notice of any
request pursuant to its OATT from a third-party customer to provide additional
transmission capacity that will require one or more capital upgrades or
improvements to the Transmission Facilities.  If capital upgrades or
improvements are required in accordance with such Owner’s OATT, then such
capital upgrades and improvements shall be made by the Operator in accordance
with the provisions of Section 7.01(a) and Section 7.01(b).

ARTICLE VIII
PHYSICAL DAMAGE TO TRANSMISSION FACILITIES; CONDEMNATION

8.01     Rebuilding Damaged Facilities.  If any of the Transmission Facilities
are materially damaged or destroyed (the “Damaged Facilities”), then within
thirty (30) days of the date the damage or destruction occurred, the Operator
shall deliver to the Owners a written notice (the “Damage Notice”) of the
Operator’s good faith reasonable estimate of the cost to repair or rebuild the
Damaged Facilities.  If the Damage Notice indicates that the total project cost
to repair or rebuild the Damaged Facilities is estimated to be Five Million
Dollars ($5,000,000) or more, inclusive of insurance proceeds, then the Owners
will determine whether the Damaged Facilities will be repaired or rebuilt within
thirty (30) days of the date of the Damage Notice.  If the Damage Notice
indicates that the total project cost to repair or rebuild the Damaged
Facilities is estimated to be less than Five Million Dollars ($5,000,000),
inclusive of insurance proceeds, then the Operator will determine whether the
Damaged Facilities will be repaired or rebuilt and provide notice thereof to the
Owners within thirty (30) days of the date of the Damage Notice.  If the Owners
or the Operator determines pursuant to this Section 8.01 to repair or rebuild
the Damaged Facilities, then the Owners will, upon receipt of any insurance
proceeds paid in connection with such Damaged Facilities, apply such proceeds
(up to its pro rata share based on its Ownership Interest) to the repair and
reconstruction of the Damaged Facilities which will be carried out by the
Operator, provided that the Operator shall pay pro rata to the Owners (in
accordance with their Ownership Interests) any insurance proceeds received from
any property insurance obtained by the Operator pursuant to Section 5.07(b). 
The Operator will be responsible for obtaining any necessary Governmental
Authorizations to repair or rebuild the Damaged Facilities and determining the
manner in which to repair and reconstruct the Damaged Facilities (including the
equipment to be used).  Each Owner shall reasonably cooperate with and support
the Operator in obtaining any such Governmental Authorizations in accordance
with Section 5.05(c).  The Operator will cause such repairs or reconstruction to
be made so that the Damaged Facilities will be repaired and restored to
substantially the same general condition, character and use as existed prior to
such damage or destruction.  If the cost of such repairs or reconstruction
exceeds the insurance proceeds required to be applied to the repair or
reconstruction pursuant to this Section 8.01, then the Owners shall pay, in
accordance with their applicable Ownership Interests, the shortfall amount.

                                                                             

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8.02     Decision not to Rebuild.  If the Owners determine pursuant to Section
8.01 not to repair or rebuild the Damaged Facilities (or cannot reach agreement
to repair or rebuild the Damaged Facilities) or the Operator determines pursuant
to Section 8.01 not to repair or rebuild the Damaged Facilities, then, in each
case, (a) each Owner shall (i) be entitled to retain any insurance proceeds
received pursuant to insurance maintained by it with respect to the Damaged
Facilities, (ii) receive its share of any revenues from the salvage or sale of
the Damaged Facilities and (iii) pay its pro rata share (based on its Ownership
Interest) of any costs of removal of parts and equipment from the Damaged
Facilities, (b) the Operator shall pay pro rata to the Owners (in accordance
with their Ownership Interests) any insurance proceeds received from any
property insurance obtained by the Operator pursuant to Section 5.07(b), and (c)
subject to Section 8.03, this Agreement shall terminate pursuant to Section
2.04(a).

8.03     Purchase of Ownership Interest.  If pursuant to Section 8.01 the Owners
determine not to repair or rebuild the Damaged Facilities (or cannot reach
agreement to repair or rebuild the Damaged Facilities) or the Operator
determines that the Damaged Facilities should not be repaired and reconstructed
and, in each case, one Owner desires to repair or rebuild the Damaged Facilities
(the “Continuing Owner”), then the Continuing Owner shall have the option to
purchase all of the Ownership Interest (and Capacity Share) of the other Owner. 
In order to exercise its option to purchase all of the Ownership Interest (and
Capacity Share) of the other Owner, the Continuing Owner must give written
notice thereof to the other Owner within thirty (30) days of the Owners’ or
Operator’s determination pursuant to Section 8.01 not to repair or rebuild the
Damaged Facilities.  The Owners shall enter into such documentation as the
Continuing Owner shall reasonably request to document the purchase and sale of
all of the Ownership Interest (and Capacity Share) of the other Owner in the
Transmission Facilities, provided that the purchase price of the Ownership
Interest (and Capacity Share) of the other Owner shall be equal to the other
Owner’s pro rata share (based on its Ownership Interest) of: (a) the salvage
value of the Damaged Facilities, and (b) the depreciated cost of the
Transmission Facilities which are not part of the Damaged Facilities.

8.04     Cooperation.  If the Continuing Owner seeks to repair or rebuild the
Transmission Facilities purchased from the other Owner pursuant to Section 8.03,
then, at the Continuing Owner’s request and expense, the other Owner and the
Operator (if the Continuing Owner is not the Operator) will, for a reasonable
period of time, cooperate with and use Commercially Reasonable Efforts to assist
the Continuing Owner in the repair or rebuilding of the Damaged Facilities. 
This Section 8.04 shall survive the expiration or termination of this Agreement.

8.05     Condemnation.  If there occurs a loss of title to, or ownership of, or
use and possession of, all or any portion of any of the Transmission Facilities,
as the result of the exercise of the right of condemnation or eminent domain by
or on behalf of any Governmental Authority, then the Operator will promptly give
notice thereof to the Owners, which notice shall generally describe the nature
and extent of such condemnation or eminent domain proceedings (including any
negotiations in connection with such proceedings).  The Operator shall, in
consultation with the Owners, use Commercially Reasonable Efforts to resist the
loss of title to, or ownership of, or use and possession of, all or any portion
of any of the Transmission Facilities through condemnation or eminent domain. 
If, as a result of condemnation or eminent domain, the Owners shall lose title
to, or ownership of, or use and possession of, all or any portion of any of the
Transmission Facilities, the Owners shall determine, by mutual agreement,
whether:

                                                                             

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(a)                the Transmission Facilities are no longer useful for the
transmission of electric power and should be retired and decommissioned, in
which case the provisions of Article IX shall control;

(b)               the Transmission Facilities should be replaced or modified, in
which case the Owners will, upon receipt of any awards paid in connection with
such condemnation or eminent domain, apply such awards to the replacement or
modification of the Transmission Facilities which will be carried out by the
Operator.  The Operator will, consistent with the mutual agreement of the
Owners, determine the manner in which to replace or modify the Transmission
Facilities (including the equipment to be used), and will cause such replacement
and modifications to be made so that the Transmission Facilities are replaced or
modified in accordance with the mutual agreement of the Owners.  If the cost of
replacement or modification of the Transmission Facilities exceeds the awards
received by the Owners in connection with such condemnation or eminent domain,
then the Owners shall pay their pro rata shares (based on their Ownership
Interests) of the shortfall amount; or

(c)                if the Owners do not reach mutual agreement on one of the
actions provided for in paragraphs (a) and (b) above, or on another course of
action, within sixty (60) days after the date of the notice provided by the
Operator to the Owners pursuant to the first sentence of this Section 8.05, then
each Owner shall receive its pro rata share (based on its Ownership Interest) of
all awards received by the Owners (or their Affiliates) in connection with any
such condemnation or eminent domain (less the actual cost, fees and expenses
incurred by the Operator in collection thereof).

ARTICLE IX
RETIREMENT AND DECOMMISSIONING

9.01     Decision to Retire Transmission Facilities.  The Owners will determine
in accordance with the terms of this Article IX when the Transmission Facilities
are no longer useful for the transmission of electric power and should be
retired and decommissioned.  If the Owners mutually agree to retire and
decommission the Transmission Facilities, then, subject to Section 9.02 and
Section 9.03, this Agreement shall terminate pursuant to Section 2.04(b).

9.02     Costs of Decommissioning.  Each of the Owners shall be responsible for
paying its pro rata share (based on its Ownership Interest) of the aggregate
amount of all costs incurred by or on behalf of the Operator to retire
permanently the Transmission Facilities from service, including decommissioning,
dismantling, demolishing and removal of equipment, facilities and structures,
security, maintenance, disposing of debris, abandonment and all other costs
incurred by or on behalf of the Operator to retire permanently the Transmission
Facilities from service, net of any amounts recovered in connection with the
sale of any retired equipment, facilities and structures.

9.03     Purchase of Ownership Interest.  Each Owner shall give written notice
to the other Owner when it believes the Transmission Facilities should be
retired and decommissioned (each, a “Decommissioning Notice”).  If the other
Owner desires to continue the operation of the Transmission Facilities (the
“Remaining Owner”), then the Remaining Owner shall have the option to purchase
all of the Ownership Interest (and Capacity Share) of the other Owner in the

 

 

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Transmission Facilities.  In order to exercise its option to purchase all of the
Ownership Interest (and Capacity Share) of the other Owner in the Transmission
Facilities, the Remaining Owner must give written notice thereof to the other
Owner within ninety (90) days of receipt of the other Owner’s Decommissioning
Notice.  The Owners shall enter into such documentation as the Remaining Owner
shall reasonably request to document the purchase and sale of the Ownership
Interest (and Capacity Share) of the other Owner, provided that the purchase
price of the Ownership Interest (and Capacity Share) of the other Owner shall be
equal to the other Owner’s pro rata share (based on its Ownership Interest) of
the depreciated cost of the applicable Transmission Facilities.

9.04     Cooperation.  If the Remaining Owner seeks to purchase and continue the
operation of the Transmission Facilities, then, at the Remaining Owner’s request
and expense, the other Owner and the Operator (if the Remaining Owner is not the
Operator) will, for a reasonable period of time, cooperate with and use
Commercially Reasonable Efforts to assist the Remaining Owner in the continued
operation of the Transmission Facilities.  This Section 9.04 shall survive the
expiration or termination of this Agreement.

ARTICLE X
INTERCONNECTION

10.01   Grant of Interconnection.  Subject to the terms and conditions in this
Article X, the PacifiCorp Transmission System and Transmission Facilities shall
be interconnected at the Point of Interconnection.

10.02   Interconnection Operating Procedures.  Prior to the energization of the
Interconnection, the Owners shall develop written operating procedures, in
accordance with WECC reliability requirements, governing operation of the
Interconnection by the Operator.  The Owners may, by mutual written agreement,
amend and supplement the operating procedures, in accordance with WECC
reliability requirements, governing operation of the Interconnection by the
Operator.

10.03   Interconnection Energization.  The Owners shall energize, or cause to be
energized, the Interconnection upon successful completion of acceptance testing
of the Interconnection by the Operator, including installation of the Metering
Equipment specified in Section 10.04, and completion of the operating procedures
specified in Section 10.02.

10.04   Metering.  The Operator shall operate and maintain the Metering
Equipment in accordance with Good Utility Practice and applicable WECC operating
guides, protocols and metering guidelines. 

 

(a)        The Operator shall test the Metering Equipment no less frequently
than once every two (2) years.  The Owners shall be given reasonable advance
notice of the Operator’s testing of the Metering Equipment and shall have the
opportunity to observe such testing, and the Operator shall provide the Owners a
copy of meter results (including any early results to the extent the Operator
has access to the results) promptly upon the results being available to the
Operator.  Each Owner may request additional tests of the Metering Equipment
beyond those required by the first sentence of this Section 10.04(a), provided
such additional

 

                                                                             

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tests shall be conducted by the Operator at the expense of the requesting Owner,
unless such additional test reveals that the Metering Equipment is found to
register outside the accepted accuracy range for watts and vars of full load
equals +/- 0.2%, light load equals +/-0.2%, and power factor equals +/-0.3%, in
which event the expense of the additional testing will borne by the Owners
equally.

(b)        If, as a result of any test, the Metering Equipment is found to be
registering outside the applicable accuracy standard in effect at the time of
the test, such Metering Equipment shall be restored to the accuracy standard or
an accurate meter substituted by the Operator.

(c)        The Operator shall provide each Owner with a real time remote signal
from the Metering Equipment pursuant to established inter-control area
communications protocols.

10.05   Service Conditions.

(a)        Operation and Maintenance; Avoidance of Burdens and Control of System
Disturbances.  Each Owner shall operate and maintain its Transmission System in
a manner consistent with Good Utility Practice and the provisions of this
Section 10.05.  In addition, each Owner shall operate and maintain its
respective Transmission System so as to minimize, in accordance with Good
Utility Practice, the likelihood of a disturbance originated in either
Transmission System, which might cause impairment to the service of the other
Owner or of any transmission system interconnected with the Transmission System
of the other Owner.  Either Owner may install and operate on its Transmission
System such relays, disconnecting devices, and other equipment as it may deem
appropriate for the protection of its Transmission System, provided that any
such relays, disconnecting devices and other equipment on the Transmission
Facilities shall be handled pursuant to Article VII.

(b)        Additional Services.  This Article X is applicable only to the
physical interconnection of the Owners’ Transmission Systems at the Point of
Interconnection and does not obligate either Owner to receive or provide any
service.  Other services provided by one Owner to the other Owner shall be
governed by such other agreements as the Owners may enter into from time to
time.  Neither Owner shall be obligated to deliver reactive power for the
benefit of the other Owner, and neither Owner shall be obligated to receive
reactive power when to do so might introduce objectionable operating conditions
on its Transmission
System.                                                                     

 

(c)        Interruption of Service.  The Owners shall use Commercially
Reasonable Efforts, consistent with Good Utility Practice and any applicable
Reliability Standards and Governmental Requirements, to provide a physical
interconnection to be operated in continuous synchronization at the Point of
Interconnection, provided that an Owner (“Interrupting Owner”) may temporarily
interrupt or isolate the Interconnection under the following circumstances:  (i)
by operation of automatic equipment installed for power system protection; (ii)
after consultation with the other Owner, other than in an emergency situation
where consultation is not practicable, when an Owner deems it necessary for
installation, maintenance, inspection, repairs or replacements of equipment on
its Transmission System; (iii) at any time that, in the sole judgment of the
Interrupting Owner, such action is necessary to preserve the integrity of, or to

         

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prevent or limit any instability on, or to avoid or mitigate an Unauthorized Use
on its Transmission System; (iv) where necessary to comply with documented
directives from a Governmental Authority; (v) as a result of one or more events
of Force Majeure; or (vi) where necessary to prevent (A) death or serious injury
to any person, (B) material damage or harm to any property or (C) any material
adverse effect to the security of, or damage to its Transmission System or the
electric systems of others to which its Transmission System is directly
connected, including the other Owner’s Transmission System.  An Interrupting
Owner shall use Commercially Reasonable Efforts to provide the other Owner (1)
with reasonable advance notice of any planned interruption of the
Interconnection and (2) with notice of any other interruption of the
Interconnection as soon as practicable after the interruption.  If synchronous
operation is interrupted, the Owners shall cooperate so as to remove the cause
of such interruption as soon as commercially practicable consistent with Good
Utility Practice, applicable Reliability Standards and applicable Governmental
Requirements.

(d)       Physical and Cyber Security.  The Operator shall cooperate with each
Owner in complying with any physical and cyber security or other security
requirement established by Governmental Requirement, including Reliability
Standards, applicable to the Owner and the Transmission Facilities, written
notice of which the Owner provides to the Operator.

10.06   Survival of Interconnection Provision.  The provisions of this Article
X, together with Articles XI,  XII, XIV, XV, XVIII, XIX and XX (to the extent
applicable to the surviving provisions of this Article X), shall continue in
full force and effect notwithstanding the expiration or termination of this
Agreement, provided that in the event of expiration or termination of this
Agreement, the Parties shall amend this Agreement to reflect such changes to
this Agreement as shall be necessary and mutually acceptable to the Parties to
conform this Agreement to the surviving provisions of this Agreement in
accordance with this Section 10.06.

ARTICLE XI
FORCE MAJEURE

11.01   Force Majeure Defined.  For purposes of this Agreement, “Force Majeure”
means an event or circumstance beyond the reasonable control of and without the
fault or negligence of the Owner or Operator claiming Force Majeure (“Affected
Party”), which, despite the exercise of reasonable diligence, cannot be or be
caused to be prevented, avoided or removed by such Affected Party including, to
the extent satisfying the above requirements, acts of God; earthquake; abnormal
weather condition; hurricane; flood; lightning; high winds; drought; peril of
the sea; explosion; fire; war (declared or undeclared); military action;
sabotage; riot; insurrection; civil unrest or disturbance; acts of terrorism;
economic sanction or embargo; civil strike, work stoppage, slow-down, or
lock-out that are of an industry or sector-wide nature and that are not directed
solely or specifically at the Affected Party; the binding order of any
Governmental Authority, provided that the Affected Party has in good faith
reasonably contested such order; the failure to act on the part of any
Governmental Authority, provided that such action has been timely requested and
diligently pursued; unavailability of equipment, supplies or products, but only
to the extent caused by Force Majeure; failure of equipment, provided that the
equipment has been operated and maintained in accordance with Good Utility
Practice; and

 

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 transportation delays or accidents, but only to the extent otherwise caused by
Force Majeure; provided, however, that neither insufficiency of funds, financial
inability to perform nor changes in market conditions shall constitute Force
Majeure.

11.02   Effect of Force Majeure.

(a)        If an Affected Party is rendered wholly or partly unable to perform
its obligations under this Agreement or its performance is delayed because of
Force Majeure, such Affected Party shall be excused from, and shall not be
liable for, whatever performance it is unable to perform or delayed in
performing due to the Force Majeure to the extent so affected, provided that:

(i)         The Affected Party, as soon as reasonably practical after the
commencement of the Force Majeure, gives the other Owner(s) and the Operator
prompt written notice thereof, including a description of the particulars of the
Force Majeure;

(ii)        The suspension of performance is of no greater scope and of no
longer duration than is required by the Force Majeure; and

(iii)       The Affected Party uses Commercially Reasonable Efforts to overcome
and remedy its inability to perform as soon as reasonably practical after the
commencement of the Force Majeure.

(b)        Notwithstanding anything in this Article XI to the contrary, no
payment obligation arising under this Agreement prior to the date of an event of
Force Majeure shall be excused by such event of Force Majeure.

(c)        Whenever an Affected Party is required to commence or complete any
action within a specified period and is prevented or delayed by Force Majeure
from commencing or completing such action within the specified period, such
period shall be extended by an amount equal to the duration of such event of
Force Majeure occurring or continuing during such period.

ARTICLE XII
EVENTS OF DEFAULT

12.01   Event of Default.

  Each of the following events shall constitute an event of default (“Event of
Default”) by the defaulting Owner (a “Defaulting Owner”):

(a)                the failure to make, when due, any payment required pursuant
to this Agreement, if such failure is not remedied within thirty (30) days after
written notice thereof from the Non-Defaulting Owner;

(b)               any representation or warranty made by such Defaulting Owner
herein is false or misleading in any material respect when made, unless (i) the
fact, circumstance or condition that is the subject of such representation or
warranty is made true within thirty (30) days after notice thereof from the
Non-Defaulting Owner, provided that if the fact, circumstance or condition that
is the subject of such representation or warranty reasonably cannot be corrected

 

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 within such thirty (30) day period, then the Defaulting Owner shall have an
additional period of time (not to exceed sixty (60) days) in which to correct
the fact, circumstance or condition that is the subject of such representation
or warranty, and (ii) such cure removes any adverse effect on the Non-Defaulting
Owner of such fact, circumstance or condition being otherwise than as first
represented, or such fact, circumstance or condition being otherwise than as
first represented does not materially adversely affect the Non-Defaulting Owner;

(c)                a transfer, assignment or other disposition of its interest
in this Agreement or its Ownership Interest (or Capacity Share) in the
Transmission Facilities, in each case, in violation of Article XIX;

(d)               the failure to perform or breach of its covenants and
obligations in Section 4.06;

(e)                the failure to be a Qualified Owner, if such failure is not
remedied within thirty (30) days after written notice thereof from the
Non-Defaulting Owner;

(f)                the failure to perform or breach of any material covenant or
obligation set forth in this Agreement (other than provided for in Section
12.01(a), (b), (c), (d) or (e)), if such failure is not remedied within thirty
(30) days after written notice thereof from the Non-Defaulting Owner, provided
that if such failure or breach cannot reasonably be cured within thirty (30)
days, then the Defaulting Owner shall have an additional period of time (not to
exceed ninety (90) days) in which to cure such failure or breach so long as the
Defaulting Owner commences good faith activities to cure the failure or breach
during the initial 30-day cure period and continues to utilize its Commercially
Reasonable Efforts to effect a cure; or

(g)               the Defaulting Party becomes Bankrupt.

12.02   Cure by Non-Defaulting Owner.  If a Defaulting Owner fails to cure an
Event of Default, then the Non-Defaulting Owner may, in its sole discretion,
attempt to cure the Event of Default, provided that the Defaulting Owner shall
reimburse the Non-Defaulting Owner for all costs and expenses incurred by or on
behalf of the Non-Defaulting Party pursuant to this Section 12.02.

12.03   Remedies.

 

(a)        If an Event of Default occurs and is continuing, then the
Non-Defaulting Owner shall be entitled to exercise any of it remedies at law or
in equity, including recovery from the Defaulting Owner of any damages suffered
as a result of the Event of Default, subject to Section 14.08.  The
Non-Defaulting Party shall use Commercially Reasonable Efforts to mitigate any
damages suffered as a result of the Event of Default.

(b)        The Owners acknowledge that the obligations and covenants performed
by each Owner hereunder are unique and that the Non-Defaulting Owner will be
irreparably injured should such obligations and covenants not be consummated in
accordance with the terms and conditions of this Agreement.  Consequently, the
Non-Defaulting Owner will not have an adequate remedy at law if the other Owner
shall fail to perform its obligations and covenants hereunder.  The
Non-Defaulting Owner shall have the right, in addition to any other remedy

 

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 available under this Agreement, to specific performance of the Defaulting
Owner’s obligations and covenants hereunder, and the Owners agree not to take a
position in any proceeding arising out of this Agreement to the effect that the
Non-Defaulting Party has an adequate remedy at law.

ARTICLE XIII
REPRESENTATIONS AND WARRANTIES

13.01   Representations and Warranties of Idaho Power.  Idaho Power represents
and warrants to PacifiCorp as of the Execution Date as follows:

(a)                It is duly formed, validly existing and in good standing
under the laws of the jurisdiction of its formation.

(b)               It has all requisite corporate power necessary to own its
assets and carry on its business as now being conducted or as proposed to be
conducted under this Agreement.

(c)                It has all necessary corporate power and authority to execute
and deliver this Agreement and to perform its obligations under this Agreement,
and the execution and delivery of this Agreement and the performance by it of
this Agreement have been duly authorized by all necessary corporate action on
its part.

(d)               The execution and delivery of this Agreement and the
performance by it of this Agreement do not: (i) violate its organizational
documents; (ii) violate any Governmental Requirements applicable to it; or (iii)
result in a breach of or constitute a default of any material agreement to which
it is a party.

(e)                This Agreement has been duly and validly executed and
delivered by it and constitutes its legal, valid and binding obligation
enforceable against it in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency or other similar laws affecting creditors’
rights generally and by principles of equity regardless of whether such
principles are considered in a proceeding at law or in equity.

(f)                Except as disclosed in Schedule 13.01(f), all material
Governmental Authorizations required by Governmental Requirements to have been
obtained by it prior to the date hereof in connection with the due execution and
delivery of, and performance by it of its obligations under, this Agreement,
have been duly obtained or made and are in full force and effect.

(g)               It is a Qualified Owner.

13.02   Representations and Warranties of PacifiCorp.  PacifiCorp represents and
warrants to Idaho Power as of the Execution Date as follows:

(a)        It is duly formed, validly existing and in good standing under the
laws of the jurisdiction of its formation.

(b)        It has all requisite corporate power necessary to own its assets and
carry on its business as now being conducted or as proposed to be conducted
under this Agreement.

                                                                             

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(c)        It has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations under this Agreement, and
the execution and delivery of this Agreement and the performance by it of this
Agreement have been duly authorized by all necessary corporate action on its
part.

(d)       The execution and delivery of this Agreement and the performance by it
of this Agreement do not: (i) violate its organizational documents; (ii) violate
any Governmental Requirements applicable to it; or (iii) result in a breach of
or constitute a default of any material agreement to which it is a party.

(e)        This Agreement has been duly and validly executed and delivered by it
and constitutes its legal, valid and binding obligation enforceable against it
in accordance with its terms, except as the same may be limited by bankruptcy,
insolvency or other similar laws affecting creditors’ rights generally and by
principles of equity regardless of whether such principles are considered in a
proceeding at law or in equity.

(f)        Except as disclosed in Schedule 13.02(f), all material Governmental
Authorizations required by Governmental Requirements to have been obtained by it
prior to the date hereof in connection with the due execution and delivery of,
and performance by it of its obligations under, this Agreement, have been duly
obtained or made and are in full force and effect.

(g)        It is a Qualified Owner.

ARTICLE XIV
INDEMNIFICATION

14.01   Indemnities.

(a)        Subject to the provisions of Section 14.03 and Section 14.08, each
Owner (the “Indemnifying Party”) shall indemnify, defend and hold harmless the
other Owner (the “Indemnified Party”) and its Representatives, from and against
any and all suits, actions, liabilities, legal proceedings, claims, demands,
losses, costs and expenses of whatsoever kind or character, including reasonable
attorneys’ fees and expenses (collectively, “Claims”) of third parties, for
injury or death of persons or physical loss of or damage to property of Persons
(other than the Indemnified Party and its Representatives) arising from the
Indemnifying Party’s (including its Representatives’): (i) gross negligence or
willful misconduct in connection with the performance of this Agreement; or (ii)
failure to perform a material obligation under this Agreement.

(b)        In addition to and not in limitation of the indemnity provided in
Section 14.01(a), but subject to the provisions of Section 14.03 and Section
14.08, each Owner, as Indemnifying Party, shall severally and not jointly, in
accordance with its Ownership Interest, indemnify, defend and hold harmless the
Operator, as Indemnified Party, and its Representatives from and against any and
all third-party Claims for injury or death of persons or physical loss of or
damage to property of Persons (other than the Indemnified Party and its
Representatives), or fines or penalties levied or imposed by Governmental
Authorities, in each case, arising under or in connection with this Agreement,
including in connection with the performance by the

 

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 Operator of its obligations under this Agreement, except for such Claims or
fines arising from the Operator’s or its Representatives’: (i) gross negligence
or willful misconduct in connection with the performance of this Agreement or
(ii) failure to perform a material obligation under this Agreement.

(c)        Subject to the provisions of Section 14.03 and Section 14.08, the
Operator, as Indemnifying Party, shall indemnify, defend and hold harmless each
Owner, as Indemnified Party, and its Representatives from and against any and
all Claims for injury or death of persons or physical loss of or damage to
property of Persons (including the Indemnified Party and its Representatives),
or fines or penalties levied or imposed by Governmental Authorities or Losses
incurred by the Indemnified Party and its Representatives, arising from the
Operator’s and its Representatives’ (i) gross negligence or willful misconduct
in connection with the performance of this Agreement or (ii) failure to perform
a material obligation under this Agreement; provided, however, in no event shall
the Operator be obligated to indemnify, defend or hold harmless an Owner and its
Representatives from and against any such Claims or fines or Losses to the
extent arising from such Owner’s or its Representatives’: (i) gross negligence
or willful misconduct in connection with the performance of this Agreement; or
(ii) failure to perform any material obligation under this Agreement.

14.02   Notice and Participation.

(a)        If an Indemnified Party intends to seek indemnification under this
Article XIV with respect to any Claims, the Indemnified Party shall give the
Indemnifying Party prompt written notice of such Claims upon the receipt of
actual knowledge or information by the Indemnified Party of any possible Claims
or of the commencement of such Claims.  The Indemnifying Party shall have no
liability under this Article XIV for any Claim for which such notice is not
provided, but only to the extent that the failure to give such notice materially
impairs the ability of the Indemnifying Party to respond to or to defend the
Claim.

(b)        The Indemnifying Party shall have the right to assume the defense of
any Claim, at its sole cost and expense, with counsel designated by the
Indemnifying Party and reasonably satisfactory to the Indemnified Party;
provided, however, that if the defendants in any such proceeding include both
the Indemnified Party and the Indemnifying Party, and the Indemnified Party
shall have reasonably concluded that there may be legal defenses available to it
which are in conflict with those available to the Indemnifying Party and that
such conflict materially prejudices the ability of the counsel selected by the
Indemnifying Party to represent both Parties, the Indemnified Party shall have
the right to select separate counsel reasonably satisfactory to the Indemnifying
Party, at the Indemnifying Party’s expense, to assert such legal defenses and to
otherwise participate in the defense of such Claim on behalf of such Indemnified
Party, and the Indemnifying Party shall be responsible for the reasonable fees
and expenses of such separate counsel.

(c)        Should any Indemnified Party be entitled to indemnification under
this Article XIV as a result of a Claim by a third party, and should the
Indemnifying Party fail to assume the defense of such Claim within a reasonable
period of time after the Indemnified Party has provided the Indemnifying Party
written notice of such Claim, the Indemnified Party may, at

                                                                             

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the expense of the Indemnifying Party, contest or, with or without the prior
consent of the Indemnifying Party, settle such Claim.

(d)       Except to the extent expressly provided herein, no Indemnified Party
shall settle any Claim with respect to which it has sought or is entitled to
seek indemnification pursuant to this Article XIV unless (i) it has obtained the
prior written consent of the Indemnifying Party, or (ii) the Indemnifying Party
has failed to assume the defense of such Claim within a reasonable period of
time after the Indemnified Party has provided the Indemnifying Party written
notice of such Claim.

(e)        Except to the extent expressly provided otherwise herein, no
Indemnifying Party shall settle any Claim with respect to which it may be liable
to provide indemnification pursuant to this Section without the prior written
consent of the Indemnified Party; provided, however, that if the Indemnifying
Party has reached a bona fide settlement agreement with the plaintiff(s) in any
such proceeding, which settlement includes a full release of the Indemnified
Party for any and all liability with respect to such Claim, and the Indemnified
Party does not consent to such settlement agreement, then the dollar amount
specified in the settlement agreement, plus the Indemnified Party’s reasonable
legal fees and other costs related to the defense of the Claim paid or incurred
prior to the date of such settlement agreement, shall act as an absolute maximum
limit on the indemnification obligation of the Indemnifying Party with respect
to the Claim, or portion thereof, that is the subject of such settlement
agreement.

14.03   Net Amount.  Subject to the limitation in Section 14.02(e), if
applicable, in the event that an Indemnifying Party is obligated to indemnify
and hold any Indemnified Party harmless under this Article XIV, the amount owing
to the Indemnified Party shall be the amount of such Indemnified Party’s actual
Claims, net of any insurance or other recovery actually received by the
Indemnified Party.

14.04   No Release of Insurers.  The provisions of this Article XIV shall not be
deemed or construed to release any insurer from its obligation to pay any
insurance proceeds in accordance with the terms and conditions of valid and
collectible insurance policies.

14.05   Mitigation.  Each Indemnified Party entitled to indemnification
hereunder shall take use Commercially Reasonable Efforts to mitigate all Claims
after becoming aware of any event which could reasonably be expected to give
rise to any Claims that are indemnifiable or recoverable hereunder or in
connection herewith.

14.06   Assertion of Claims.  No Claim of any kind shall be asserted against any
Owner or the Operator, whether arising out of contract, tort (including
negligence), strict liability, or any other cause of or form of action, unless
it is filed in a court of competent jurisdiction, or a demand for arbitration is
made, within the applicable statute of limitations period for such Claim.

14.07   Survival of Obligation.  The duty to indemnify under this Article XIV
shall continue in full force and effect notwithstanding the expiration or
termination of this Agreement, with respect to any Claim arising out of an event
or condition which occurred or existed prior to such expiration or termination.

                                                                             

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14.08   Limitation on Liability.

(a)        Notwithstanding any provision in this Agreement to the contrary,
neither Owner nor the Operator shall be liable under this Agreement in any
action at law or in equity, whether based on contract, tort or strict liability
or otherwise, for any special, incidental, indirect, exemplary, punitive or
consequential damages or losses, including any loss of revenue, income, profits
or investment opportunities, loss of the use of equipment, or the cost of
temporary equipment or services, provided that any fines or penalties levied or
imposed by Governmental Authorities shall not be excluded under this Section
14.08(a) as special, incidental, indirect, exemplary, punitive or consequential
damages or losses.

(b)        Notwithstanding any provision in this Agreement to the contrary,
neither Owner nor the Operator shall be liable under this Agreement if and to
the extent that the Agreement Limiting Liability Among Western Interconnected
Systems executed by Idaho Power on August 5, 1985 and by PacifiCorp on August
22, 1973 (the “WIS Agreement”) is then in effect between the Parties and
expressly limits or precludes such liability.  Nothing in this Agreement shall
amend or otherwise affect in any way the terms and conditions of or liability of
the Parties under the WIS Agreement.

ARTICLE XV
PROPRIETARY INFORMATION

15.01   Disclosure of Proprietary Information Prohibited.  Any Proprietary
Information of a Party (whether in its capacity as Owner or Operator) (the
“Transferor”) which is disclosed to or otherwise received or obtained by the
other Party (whether in its capacity as Owner or Operator) (the “Transferee”)
incident to this Agreement shall be held in confidence and the Transferee shall
not (subject to Sections 15.02, 15.03 and 15.05) publish or otherwise disclose
any Proprietary Information of the Transferor to any Person for any reason or
purpose whatsoever, or use any Proprietary Information for any purpose other
than performance under this Agreement, without the prior written approval of the
Transferor, which approval may be granted or withheld by the Transferor in its
sole discretion.  Without limiting the generality of the foregoing, each
Transferee shall observe at a minimum the same safeguards and precautions with
regard to the Transferor’s Proprietary Information which the Transferee observes
with respect to its own information of the same or similar kind.

15.02   Disclosure by Representatives.  Each Transferee agrees that it will make
available Proprietary Information received from a Transferor to its own
representatives only on a need-to-know basis, and that all Persons to whom such
Proprietary Information is made available will be made aware of the confidential
nature of such Proprietary Information, and will be required to agree to hold
such Proprietary Information in confidence in accordance with the terms hereof.

15.03   Permitted Disclosures.  Notwithstanding anything to the contrary
contained in this Article XV:

 

(a)                A Transferee may provide any Proprietary Information to any
Governmental Authority having jurisdiction over or asserting a right to obtain
such information, provided that (i) such Governmental Authority orders that such
Proprietary Information be provided, and (ii) unless prohibited from so doing by
applicable Governmental Requirements,

 

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 the Transferee promptly advises the Transferor of any request for such
information by such Governmental Authority and cooperates in giving the
Transferor an opportunity to present objections, requests for limitation, and/or
requests for confidentiality or other restrictions on disclosure or access, to
such Governmental Authority.

(b)               A Transferee may, to the extent required, disclose Proprietary
Information to any Governmental Authority in connection with the application for
any Governmental Authorization; provided that unless prohibited from so doing by
applicable Governmental Requirements, the Transferee shall provide the
Transferor prior written advance notice of such disclosure and the Proprietary
Information that is to be disclosed.

(c)                A Transferee may disclose such Proprietary Information
regarding the existence and terms of this Agreement as such Transferee deems
necessary to enable it to comply with the Securities Exchange Act of 1934, or
the rules, regulations and forms of the Securities and Exchange Commission,
issued thereunder or the applicable rules of any stock exchange, or as otherwise
required by applicable Governmental Requirements.

15.04   Injunctive Relief.  In the event of a breach or threatened breach of the
provisions of this Article XV by any Transferee, the Transferor shall be
entitled to an injunction restraining the Transferee from such breach or
threatened breach.  Nothing contained herein shall be construed as prohibiting
the Transferor from pursuing any other remedies available at law or equity for
such breach or threatened breach of this Agreement.

15.05   Publicity.  Any public relations matters, including public announcements
and press releases or similar publicity, arising out of or in connection with
the terms of this Agreement or the transactions contemplated herein, shall be
coordinated and agreed to between the Owners prior to said announcement or
release.

15.06   Proprietary Information Defined.  For purposes of this Agreement,
“Proprietary Information” means all information, written or oral, which has been
or is disclosed by the Transferor, or by any Representative of the Transferor,
or which otherwise becomes known to the Transferee, or to any Representative of
such Transferee, or any other party in a confidential relationship with, the
Transferee, and which (a) relates to matters such as patents, trade secrets,
research and development activities, draft or final contracts or other business
arrangements, books and records, budgets, cost estimates, pro forma
calculations, engineering work product, environmental compliance, vendor lists,
suppliers, manufacturing processes, energy consumption, pricing information,
private processes, and other similar information, as they may exist from time to
time, (b) relates to the existence or the terms, including pricing and other
commercial terms, of this Agreement, or (c) the Transferor expressly designates
in writing to be confidential, provided that “Proprietary Information” shall
exclude information falling into any of the following categories:

(i)         Information that, at the time of disclosure hereunder, is in the
public domain, other than information that entered the public domain by breach
of this Agreement by Transferee;

 

                                                                             

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(ii)        Information that, after disclosure hereunder, enters the public
domain, other than information that enters the public domain by breach of this
Agreement by Transferee;

(iii)       Information, other than that obtained from third-parties, that prior
to disclosure hereunder, was already in Transferee’s possession, either without
limitation on disclosure to others or subsequently becoming free of such
limitation;

(iv)       Information obtained by Transferee from a third-party having an
independent right to disclose the information; or

(v)        Information that is available through independent research without
use of or access to the Proprietary Information.

15.07   Survival.  The provisions of this Article XV shall continue in full
force and effect during the Term and for a period of two (2) years thereafter,
notwithstanding the expiration or termination of this Agreement, with respect to
any Proprietary Information obtained by any Transferee prior to such expiration
or termination.

ARTICLE XVI
RELIABILITY

16.01   Reliability.  The Operator shall be responsible for compliance with all
Reliability Standards applicable to the Owners and the Operator with respect to
the Transmission Facilities.

ARTICLE XVII
TAXES

17.01   No Partnership.  Nothing in this Agreement shall be deemed to create or
constitute a partnership, joint venture or association among the Owners or any
of them, the sole purpose of this Agreement being limited to (a) the allocation
of the Ownership Interests (and Capacity Share) in the Transmission Facilities
and (b) provision for (i) the orderly and efficient construction, repair,
modification, rehabilitation, operation and maintenance of the Owners’
respective separate undivided Ownership Interests in the Transmission
Facilities, and (ii) the interconnection of the Owners’ respective Transmission
Systems.  Each Owner agrees and covenants that it shall not take or omit to take
any action or reporting position with any Governmental Authority contrary to
this Section 17.01.

17.02   761 Election.  The Owners intend that, as tenants in common and owners
of undivided Ownership Interests, for United States income tax purposes the
Owners shall elect in accordance with the provisions of section 761 of the
Internal Revenue Code of 1986, as amended (“Code”), and the applicable income
tax regulations thereunder (“Regulations”), to be excluded from all of the
provisions of Subchapter K of the Code upon the first occasion in which such
election may be filed under these Regulations and that, if such election is not
filed, this Agreement shall constitute an election under Regulations section
1.761-2(b)(2)(ii) to be excluded from all of the provisions of Subchapter K of
the Code and the applicable Regulations, beginning

                                                                             

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with the first year of the creation of the tenancy in common as contemplated by
this Agreement and that no Owner shall object to any such election.

17.03   Responsibility for Taxes.  It is the intent of the Owners that so far as
possible, each Owner shall separately report, promptly and timely file returns
with respect to, be responsible for and pay all property, income, franchise,
business, or other taxes or fees (“Taxes”), arising out of its Ownership
Interests and the matters contemplated by this Agreement, that such Taxes shall
be separately levied and assessed against each Owner severally and that each
Owner shall be solely responsible for and shall pay all such Taxes so levied and
assessed against it without any responsibility of the other Owner with respect
thereto and without the amounts thereof being paid and apportioned between the
Owners under this Agreement.  To the extent that Taxes (such as property,
payroll, sales and use Taxes) may be levied or assessed against the Transmission
Facilities, their operation or the Owners in such a manner as to make impossible
the carrying out of the foregoing provisions of this Section 17.03, the Operator
shall report, file returns with respect to and pay such Taxes and each other
Owner shall immediately reimburse the Operator for each such Owner’s Ownership
Interest percentage of such Taxes.  The Operator shall not have any obligation
to contest or to seek refund of such Taxes; provided, however, that the Operator
may, by its personnel or counsel of its selection, pursue such administrative or
court proceedings as the Operator may determine.  Each Owner shall on request
pay to the Operator such Owner’s Ownership Interest percentage of the costs of
such proceedings and shall share in any savings resulting from such proceedings
in the same proportion.  Each Owner agrees to cooperate with the other Owner
with respect to reasonable requests for information or other matters with
respect to Taxes.

17.04   Indemnification.  Each Owner (the “Tax Indemnifying Party”) shall
indemnify and hold harmless the other Owner (the “Tax Indemnitee Party”), on an
after-tax basis, from and against any Taxes (including any interest or
penalties) imposed on such Tax Indemnitee Party or the Transmission Facilities
or any part thereof, to the extent such Taxes are the responsibility of the Tax
Indemnifying Party pursuant to this Article XVII.

17.05   Determination of Depreciation and Other Matters.  Each Owner shall
determine the basis and method it will use for purposes of depreciation and
other matters where investment of the Transmission Facilities is relevant.

ARTICLE XVIII
DISPUTES

18.01   Exclusive Procedure.  Any dispute, controversy or claim arising out of
or relating to this Agreement or the breach, interpretation, termination,
performance or validity of this Agreement (each, a “Dispute”) shall be resolved
pursuant to the procedures of this Article XVIII.

18.02   Dispute Notices.    If a Dispute arises between the Owners or between
the Operator and one or both of the Owners, then any Party to such Dispute
(each, a “Disputing Party”) may provide written notice thereof to the other
Disputing Party or Disputing Parties, including a detailed description of the
subject matter of the Dispute (the “Dispute Notice”).  Any Disputing Party may
seek a preliminary injunction or other provisional judicial remedy if such
action is necessary to prevent irreparable harm or preserve the status quo, in
which case the Disputing

--------------------------------------------------------------------------------

 

Parties nonetheless will continue to pursue resolution of the Dispute pursuant
to this Article XVIII.

18.03   Informal Dispute Resolution.

(a)        The Disputing Parties shall make a good faith effort to resolve the
Dispute by prompt negotiations between and/or among each Disputing Party’s
representative so designated in writing to the other Disputing Party or
Disputing Parties (each a “Manager”).  If the Managers are not able to resolve
the Dispute within thirty (30) days after the date of the Dispute Notice, they
shall refer the matter to the designated senior officers of their respective
companies (the “Executive(s)”), who shall have authority to settle the Dispute. 
If the Executives are not able to resolve the Dispute within sixty (60) days
after the date of the Dispute Notice, then the Dispute shall be resolved
pursuant to Section 18.04.

(b)        All communications and writings exchanged between and/or among the
Disputing Parties in connection with these negotiations shall be confidential
and shall not be used or referred to in any subsequent binding adjudicatory
process between and/or among the Disputing Parties, either with respect to the
current Dispute or any future Dispute between and/or among the Owners and/or the
Operator.

18.04   Submission of Dispute to FERC or Approved Courts.  If a Dispute cannot
be settled amicably between the Disputing Parties pursuant to Section 18.03,
then any Disputing Party may, in its sole discretion, within one (1) year after
the conclusion of the time period for informal dispute resolution specified in
Section 18.03, submit such Dispute (a) to FERC or (b) to the jurisdiction of the
state courts situated in Idaho or the United States District Court for the
District of Idaho (the “Approved Courts”).  Each of Idaho Power and PacifiCorp,
in its capacity as an Owner and as the Operator, consents to and accepts for
itself and in respect of its property, generally and unconditionally, the
exclusive jurisdiction of the Approved Courts and appellate courts from any
appeal thereof, and irrevocably waives any objection which it may now or
hereafter have to the jurisdiction of the Approved Courts.  Each of Idaho Power
and PacifiCorp, in its capacity as an Owner and as the Operator, further
irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of venue of any suit, proceeding or
other action brought pursuant to this Article XVIII in any of the Approved
Courts, and irrevocably waives, to the fullest extent permitted by law, and
agrees not to plead or claim in any such Approved Court that any suit,
proceeding or other action brought therein has been brought in an inconvenient
forum.

18.05   Continued Performance.  During the pendency of any Dispute, each Owner
and the Operator shall continue to perform all of its respective obligations
under this Agreement.

ARTICLE XIX
ASSIGNMENT

19.01   Prohibited Transfers and Assignments.

  Neither PacifiCorp nor Idaho Power shall have the right to transfer, assign or
otherwise dispose of, in whole or in part, its interest in this Agreement,
including its rights, duties and obligations hereunder, nor to transfer, assign
or

                                                                             

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otherwise dispose of, in whole or in part, its Ownership Interest (or Capacity
Share) in the Transmission Facilities, except as permitted under this Article
XIX.

19.02   Permitted Assignments and Transfers.  The restrictions set forth in
Section 19.01 shall not restrict:

(a)        dispositions and sales by the Operator incident to renewals or
replacements of the Transmission Facilities;

(b)        the right of an Owner to subject any of its Ownership Interest (and
Capacity Share) to the lien of any mortgage upon all or a portion of its own
physical electric utility property or to otherwise collaterally assign its
rights and obligations in this Agreement to a lender or other person providing
financing to the Owner;

(c)        the right of an Owner to transfer voluntarily all of its Ownership
Interest (and Capacity Share) and all of its rights and obligations in this
Agreement (including as part of such transfer, in the case of PacifiCorp, all of
its rights and obligations in this Agreement as the Operator) in connection with
any sale, merger or other transfer of substantially all of such Owner’s electric
transmission facilities as an operating entity; provided, however, that the
effectiveness of such assignment shall be conditioned upon the assignee (i)
agreeing in writing, in form and substance reasonably satisfactory to the other
Owner, to assume all of the rights and obligations of the assigning Owner as of
the assignment date and (ii) qualifying as a Qualified Owner on the assignment
date;

(d)       the right of an Owner to transfer voluntarily all of its Ownership
Interest (and Capacity Share) and all of its rights and obligations in this
Agreement (including as part of transfer, in the case of PacifiCorp, all of its
rights and obligations in this Agreement as the Operator) to an Affiliate of the
Owner which owns all or substantially all of the transmission facilities of such
Owner; provided, however, that the effectiveness of such assignment shall be
conditioned upon the assignee (i) agreeing in writing, in form and substance
reasonably satisfactory to the other Owner, to assume all of the rights and
obligations of the assigning Owner as of the assignment date and (ii) qualifying
as a Qualified Owner on the assignment date;

 

(e)        the right of any Owner to transfer voluntarily all of its Ownership
Interest (and Capacity Share) and all of its rights and obligations in this
Agreement (including as part of such transfer, in the case of PacifiCorp, all of
its rights and obligations in this Agreement as the Operator) to a third party;
provided that:  (i) the other Owner, in its sole discretion, approves such
transfer and approves the third-party purchaser as having demonstrated that it
is financially and technically capable of performing the transferring Owner’s
(and, in the case where PacifiCorp is the transferring Owner, Operator’s)
obligations under this Agreement, and (ii) the other Owner is offered the right
of first refusal to purchase such Ownership Interest (and Capacity Share) and
all of the transferring Owner’s rights and obligations in this Agreement
(including as part of such transfer, in the case where PacifiCorp is the
transferring Owner, all of its rights and obligations in this Agreement as the
Operator), on terms no less favorable than those offered to such proposed
third-party purchaser; provided, however, that the effectiveness of such
assignment shall be conditioned upon the third-party purchaser (A) agreeing in
writing, in form and substance reasonably satisfactory to the other Owner, to
assume all of the rights and obligations of the assigning Owner (including as
part of such transfer, in the case of PacifiCorp,

                                                                             

--------------------------------------------------------------------------------

 

 

 

 all of its rights and obligations in this Agreement as the Operator) as of the
assignment date and (B) qualifying as a Qualified Owner on the assignment date;
and

(f)        the right of an Owner to schedule and provide transmission service
(in the amount of its Capacity Share) over the Transmission Facilities under the
Owner’s OATT and to schedule and transmit an amount of energy commensurate with
the Owner’s Capacity Share over the Transmission Facilities on its own behalf or
on behalf of the Owner’s transmission customers; provided, however, that at no
time shall an Owner be entitled to post, sell, schedule or transmit transmission
service or an amount of energy over the Transmission Facilities greater than its
Capacity Share, unless otherwise mutually agreed to in writing in advance by the
other Owner.

ARTICLE XX
MISCELLANEOUS

20.01   Notices.

(a)        Any notice, demand, request or other communication required or
permitted to be given pursuant to this Agreement shall be in writing and signed
by the Owner or Operator giving such notice, demand, request or other
communication and shall be hand delivered or sent by certified mail, return
receipt requested, or overnight courier to the other Owner and/or Operator at
the address set forth below:

If to Idaho Power:

Idaho Power Company

 

1221 West Idaho Street

 

Boise, ID 83702

 

Attn:  Manager, Grid Operations

 

Telephone:  208-388-5669

 

 

With a copy to:

Idaho Power Company

 

1221 West Idaho Street

 

Boise, ID  83702

 

Attn:  Legal Department

 

Telephone:  208-388-2300

 

 

If to PacifiCorp:

PacifiCorp

 

825 NE Multnomah Street, Suite 1600

 

Portland, OR 97232

 

Attn:    Director, Transmission Service

 

Telephone:  503-813-6712

 

 

 

 

                                                                             

--------------------------------------------------------------------------------

 

With a copy to:

PacifiCorp

 

825 NE Multnomah Street, Suite 1600

 

Portland, OR 97232

 

Attn:  Legal Department

 

Telephone:  503-813-5854

 

 

If to Operator:

PacifiCorp

 

825 NE Multnomah Street, Suite 1600

 

Portland, OR 97232

 

Attn:    Director, Transmission Service

 

Telephone:  503-813-6712

 

 

With a copy to:

PacifiCorp

 

825 NE Multnomah Street, Suite 1600

 

Portland, OR 97232

 

Attn:  Legal Department

 

Telephone:  503-813-5854

 

(b)        Each Owner and the Operator shall have the right to change the place
to which any notice, demand, request or other communication shall be sent or
delivered by similar notice sent in like manner to the other Owner(s) and the
Operator.  The effective date of any notice, demand, request or other
communication issued pursuant to this Agreement shall be when:  (i) delivered to
the address of the Owner or Operator personally, by messenger, by a nationally
or internationally recognized overnight delivery service or otherwise; or (ii)
received or rejected by the Owner or Operator, if sent by certified mail, return
receipt requested, in each case, addressed to the Owner or Operator at its
address and marked to the attention of the person designated above (or to such
other address or person as an Owner or Operator may designate by notice to the
Owners and/or Operator effective as of the date of receipt by such Owners and/or
Operator).

20.02   Entire Agreement.  This Agreement and the Exhibits attached hereto, and
the other documents between the Owners referenced herein constitute the entire
agreement between the Owners and the Operator and supersede all prior agreements
and understandings, whether oral and written, between the Owners and the
Operator with respect to the subject matter hereof.  There are no oral
understandings, terms or conditions and neither Owner nor the Operator has
relied upon any representation or warranty, expressed or implied, not contained
in this Agreement.

20.03   Parties Bound.  This Agreement shall be binding upon each of the Owners
and the Operator and their respective successors and permitted assigns.

 

--------------------------------------------------------------------------------

 

 

 

 

 

20.04   Amendments.

(a)        Except as otherwise provided in Section 20.04(c), this Agreement may
not be amended, supplemented or otherwise modified, other than pursuant to an
instrument in writing executed by the Owners.

(b)        Absent agreement of both Parties to the proposed change and except as
otherwise provided in Section 20.04(c), the standard of review for changes to
this Agreement proposed by a Party, or FERC acting sua sponte, shall be the
“public interest” standard of review set forth in United Gas Pipe Line Co. v.
Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v.
Sierra Pacific Power Co., 350 U.S. 348 (1956); provided that the standard of
review for any modification to this Agreement requested by non-contracting third
parties shall be the most stringent standard permissible under then-applicable
law.

(c)        Nothing contained in this Agreement shall be construed as affecting
in any way the right of either Party to unilaterally make application to FERC
under Section 205 or Section 206 of the Federal Power Act for a change in the
charges set forth in Exhibit F.  It is the intent of the Parties that the
standard of review that FERC will apply to any such unilateral application shall
be the just and reasonable standard of review rather than the “public interest”
standard of review.

20.05   Waivers.  No waiver by any Owner or the Operator of any one or more
defaults by any other Owner or the Operator in the performance of any of the
provisions of this Agreement shall be construed as a waiver of any other default
or defaults whether of a like kind or different nature.  Any delay, less than
any applicable statutory period of limitations, in asserting or enforcing any
rights under this Agreement shall not be deemed a waiver of such rights. 
Failure of any Owner or the Operator to enforce any provisions hereof shall not
be construed to waive such provision, or to affect the validity of this
Agreement or any part thereof, or the right of any Owner thereafter to enforce
each and every provision thereof.

20.06   Choice of Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Idaho, without giving effect to
conflicts of laws principles.

20.07   Headings.  Article and Section headings used in this Agreement
(including headings used in any Exhibits attached hereto) are for convenience of
reference only and shall not affect the construction of this Agreement.

20.08   Relationship of Parties.  The covenants, obligations, and liabilities of
the Owners are intended to be several and not joint or collective, and nothing
herein contained shall ever be construed to create an association, joint
venture, trust or partnership, or to impose a trust or partnership covenant,
obligation or liability on or with regard to any of the Owners.  Each Owner
shall be individually responsible for its own covenant, obligations and
liability as herein provided.  No Owner shall be under the control of, or shall
be deemed to control, the other Owner.  Neither Owner shall have a right nor
power to bind the other Owner without its express written consent.

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

20.09   Severability.  In the event that any provision of this Agreement or the
application thereof becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the Owners and the Operator.  The Owners and the Operator further
agree to replace such illegal, void or unenforceable provision of this Agreement
with a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of such illegal, void or
unenforceable provision.

20.10   No Third Party Beneficiaries.  Nothing express or implied in this
Agreement is intended to nor shall be construed to confer upon or give to any
Person (other than the Owners and the Operator) any rights or remedies under or
by reason of this Agreement or any transaction contemplated herein.

20.11   Further Assurances.  Each Owner and the Operator agrees to execute and
deliver from time to time such additional documents, and take such additional
actions, as may be reasonably required by the other Owner or the Operator to
give effect to the purposes and intent hereof.

20.12   Conflict of Interest.  Nothing in this Agreement shall prohibit any
Owner or the Operator from engaging in or possessing any interest in other
projects or business ventures of any nature and description, independently or
with others.

20.13   Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be original, and all of which together shall
constitute one agreement.  Electronic transmission of any signed original
document, and retransmission of any signed electronic transmission, shall be the
same as delivery of an original.  At the request of either Owner or the
Operator, the other Owner or the Operator, as applicable, will confirm
electronically transmitted signatures by signing an original document.

[SIGNATURE PAGE FOLLOWS]

 

                                                                             

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IN WITNESS WHEREOF, each of the Owners has caused its duly authorized
representative to execute this Populus Joint Ownership and Operating Agreement
as of the date first above written.

 

PACIFICORP:

PACIFICORP,

 

AS OWNER AND OPERATOR

 

 

 

By:  _____________________________

 

Name:______________________________

 

Title:_______________________________

 

 

IDAHO POWER:

IDAHO POWER COMPANY,

 

AS OWNER

 

 

 

By:  _____________________________

 

Name:______________________________

 

Title:_______________________________

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT A

 

Description of Transmission Facilities and Common Facilities

 

Section I.  Description of Transmission Facilities.2

 

The Transmission Facilities includes all above ground 345kV structures, bus,
breakers, capacitors, associated equipment and foundations as listed below and
as shown on the one line drawing attached as Exhibit G which shows the extent of
the jointly owned Transmission Facilities at the Populus Substation.  The major
equipment included in the Transmission Facilities consist of sixteen 345 kV
breakers, thirty-five air breaks, two line reactors, two series capacitor banks,
one shunt capacitor bank and eleven coupling capacitor voltage transformers
(CCVT), including all components associated with connection of the
Bridger-Populus Transmission Lines (#s 1 and 2), the Populus–Borah Transmission
Lines (#s 1 and 2), the Populus–Ben Lomond Transmission Lines (#s 1, 2 and 3)
and the Populus–Kinport Transmission Line.

 

Transmission Line

Item

Description

Qnty

Dead End

Mono pole steel

10

Tangent

Mono pole steel

35

Dead End

Three pole steel

10

 

 

 

Substation

Item

Description

Qnty

345 kV breaker

362kV, 3000A, 50kA, Gas Filled, w/Pre-insertion Resistors 13

 

 

322, 327, 328, 342, 343, 346, 347, 348, 362, 363, 366, 367, 368

 

 

 

 

345 kV breaker

362kV, 2000A, 50kA, Gas Filled, for shunt reactor

2

 

R393, R392

 

 

 

 

345 kV breaker

362kV, 3000A, 50kA, Gas Filled, for Capacitor Bank

1

 

C329

 

 

 

 

345 kV switch

362kV, 3000A, Vertical Break, W/Ground Switch (Line)

8

 

 

 

345 kV Switch

362kV, 3000A, Vertical Break (Breaker Isolation)

20

 

 

 

345 kV Switch

362kV, 2000A, Vertical Break (Capacitor & Reactor)

3

                                               

2For asset accounting purposes, Idaho Power may request unit of property
breakdown information with greater detail than shown in this Exhibit A at the
conclusion of construction.  PacifiCorp will make reasonable and timely
accommodation to such a request, not to exceed the level of detail produced for
its own internal asset accounting purposes.

 

 

 

                                                                             

--------------------------------------------------------------------------------

 

 

 

 

 

 

345 kV Switch

362kV, 3000A, Vertical Break, W/Ground Switch

4

 

382G, 352G, 383G, 353G

 

 

 

 

345 kV CCVT

1550KV BIL, 1800/3000:1, No Carrier Accessories

6

 

 

 

345 kV CCVT

1550KV BIL, 1800/3000:1, With Carrier Accessories

5

 

 

 

345 kV CT/VT

CT/VT Metering Units, 345kV

15

 

 

 

345 kV Capacitor

 

 

 

Bank

362kV, 220/F275 MVar

1

 

 

 

345 kV Series

 

 

 

Capacitor

347-262 kV, 1550 kV BIL

2

 

 

 

345 kV Reactors

362kV, 100MVA

2

 

 

 

Insulator

Station Post, 345kV

738

 

 

 

Insulator

Suspension, 345kV

48

 

 

 

Bus

Rigid and Wire Bus, Assemblies, and Connectors

1

 

 

 

Bus

Rigid & Wire Bus, Ass. & Connectors – 345kV Series Capacitor

2

 

 

 

Security

Security System, Conduit Installation

1

 

 

 

Communications

Power Line Carrier, With All Additional Equipment

5

 

 

 

Line Traps

345kV, 3000A

5

 

 

 

Lightning Arresters

345 kV, 212kV MCOV

24

 

 

 

Oil Containment

System and Foundation

1

 

 

 

Foundations

Concrete - Drilled Piers

5685 Yds

 

 

 

Steel

Structural Steel Supports

2374881 lbs.

 

 

 

 

--------------------------------------------------------------------------------

 

Section II. Description of Common Facilities

Description

Contract Quantity

Unit Of Measure

Fencing & Gates

 

 

Substation Fencing Furnish and Install (Including Signage)

9310

LF

Substation Gates Furnish and Install (Including Signage)

3

EA

Property Boundary Gates, Cattle Guards, etc. Furnish and Install

1

LS

Substation Fencing Furnish and Install for 345kV Series Capacitors (Including
Signage)

inc. SE.1

LF

Reinforced Concrete

 

 

Concrete – Slab on Grade

1075

CY

Concrete - Pad and Pedestal

 

CY

Concrete - Control House

 

CY

Concrete - Miscellaneous (Station Service, Bollards, Security, Etc.)

 

CY

Cable Trench

 

 

Cable Trench w/covers

8332

LF

Cable Trench w/covers Drivable

1096

LF

Conduit and Power & Control Cables

 

 

Conduit, Below and Above Grade

1

LS

Power Cable

1

LS

Control Cable

1

LS

Grounding

 

 

Below Grade Grounding

92737

LF

Above Grade Grounding

22089

LF

Protection & Controls, SCADA & Communications

 

 

Control, Relay and Annunciator Panels

37

EA

Relay Communications Equipment; i.e. SEL 2030, Teltone Modem

1

LOT

Revenue Metering Panels

8

EA

RTU and Interposition Panel

1

EA

DFR (i.e. Ametek TR-2000 - 32 Channel with Ethernet Connection)

 

EA

SER (i.e. Hathaway 4100 - 256 Points)

 

EA

Yard Termination Cabinets

6

EA

Control House

 

 

Control House, 28’ x 80’

1

LS

Battery System 125 Vdc, Complete With Rack And Charger, Purchase and
Installation

1

LS

Battery System 48 Vdc, Complete With Rack And Charger, Purchase and Installation

1

LS

Station Service

 

 

Install Station Service

1

LS

Install Standby Generator

1

LS

 

 

--------------------------------------------------------------------------------

 

Automatic Transfer Switch

1

LS

Install Distribution Service to Substation Boundary

1

LS

240 VAC, 50A Disconnect Switches, Three Phase System

1

LS

Fiber Optics – Installation

 

 

String / Sag /  ADSS Cable - Overhead including all hardware

0

LF

Fusion Splice / Enclosure, ADSS To OPGW, Including slack storage and hardware

inc. in SP.3

EA

ADSS U/G Cable in Place (with innerduct and conduit or in cable trench,
including building entry); Furnish and Install

1900

EA

Quazite Storage Vault / Storage Only

1

EA

Patch Panel/Termination w/ Fusion Splicing, 48 Fibers

1

EA

Cable In Place in Building, including innerduct

100

LF

Fiber Node Equipment, with rack, power, and grounding

1

EA

Channel Bank and associated Equipment, with rack, power, and grounding

1

EA

 

 

 

 

 

                                                                             

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT B

 

[Intentionally omitted.]

 

                                                                             

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT C

 

Ownership Interests

 

Owner

Ownership Interest

 

PacifiCorp

78.2%

Idaho Power

 

20.8%

 

Each Owner’s percentage Ownership Interest in the Transmission Facilities shall
be determined based on the average of the percentage of Transmission Line
Capacity of each 345 kV transmission line or transformer that has a connection
to the Transmission Facilities at the Populus Substation that such Owner owns or
controls.  For purposes of this Exhibit C, “Transmission Line Capacity” means,
in respect of each 345 kV transmission line or transformer that has a connection
to the Transmission Facilities at the Populus Substation, the total amount of
rated transmission capacity of such transmission line or transformer, provided
that the Owners agree that (i) neither the Transmission Line Capacity nor either
Owner’s Ownership Interest shall change as a result of a temporary or permanent
change in the rated transmission capacity of any such transmission lines or
transformers that are connected to the Transmission Facilities at the Populus
Substation on or before December 31, 2010 and (ii) the Transmission Line
Capacity and the Owners’ Ownership Interests shall only change, if at all, when
an additional 345 kV transmission line or transformer is interconnected to the
Populus Substation after December 31, 2010.

 

                                                                             

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT D

[Intentionally omitted.]

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT E

 

Construction Budget

 

$24,623,483.41

 

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT F

 

Monthly Transmission Facilities O& M Charge and
Monthly Common Facilities Charge

 

The Monthly Transmission Facilities O&M Charge each month during the Term shall
be equal to the product of (1) the Installed Cost of the Transmission
Facilities, (2) Idaho Power’s Ownership Interest, and (3) the O&M Expense
Factor.

For purposes of this Exhibit F:

 

(i)         “Installed Cost of the Transmission Facilities” means the original
and actual aggregate Cost of the Transmission Facilities incurred by or on
behalf of PacifiCorp as of the date construction of the Transmission Facilities
is completed pursuant to Article III, trued-up to final Cost after all work
orders for the construction of the Transmission Facilities are closed to
account; and

 

(ii)        the “O&M Expense Factor” means 0.1845% per month.

 

The Monthly Common Facilities Charge each month during the Term shall be equal
to the product of (1) the Installed Cost of the Common Facilities, (2) Idaho
Power’s Ownership Interest, and (3) the Common Facilities Factor.

For purposes of this Exhibit F:

 

(i)         “Installed Cost of the Common Facilities” means the original and
actual aggregate Cost of the Common Facilities incurred by or on behalf of
PacifiCorp as of the date construction of the Transmission Facilities is
completed pursuant to Article III, trued-up to final Cost after all work orders
for the construction of the Common Facilities are closed to account; and

 

(ii)        the “Common Facilities Factor” means 1.022% per month.

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT G

 

Point of Interconnection

 

[See Attached]

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT H

 

Milestones

 

 

Milestone

Milestone Date

Filing of this Agreement at FERC for approval

5 Business Days after the Execution Date

345 kV yard energized

October 1, 2010

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

SCHEDULE 13.01(f)

 

Idaho Power’s Outstanding Governmental Authorizations

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

SCHEDULE 13.02(f)

 

PacifiCorp’s Outstanding Governmental Authorizations

 

 

 

 

 

 

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Exhibit I

Form of Hemingway Easement Agreement

 

Recorded at the request of and

When recorded mail to:

 

Gil Green

Idaho Power Company

P. O. Box 70

Boise, Idaho 83707

EASEMENT AGREEMENT

 

FOR VALUE RECEIVED THIS EASEMENT AGREEMENT (“Easement”), MADE this ____ day of
______, 2010 by and between IDAHO POWER COMPANY, an Idaho Corporation, its
successors and assigns (hereinafter called “Grantor”), and PACIFICORP, an Oregon
corporation its successors and assigns (hereinafter called “ Grantee”) and

The Grantor does hereby grant and convey to the Grantee an easement for the
nonexclusive right to use and access the Grantor’s property set forth in the
description attached hereto as Exhibit A (the “Transmission Facilities Site”).

 

The property easement will be utilized by the Grantee and its agents, employees
or contractors for the use of, and rights of ingress, egress and access to, the
Transmission Facilities Site to permit the Grantee and its designees to exercise
Grantee’s rights, duties, and privileges as described in the Hemingway Joint
Ownership and Operating Agreement dated May 3, 2010, entered into by the Grantee
and Grantor (“JOOA”).  The rights of the Grantee and its agents, employees or
contractors for use of, ingress, egress and access to the Transmission
Facilities Site shall be governed by Section 5.06(a) of the JOOA, during the
period the JOOA is in effect, including during any period after the JOOA has
been terminated but the surviving provisions identified in Section 2.05(b)
(including Section 5.06(a)) remain in effect.  If the JOOA terminates or
expires, the property easement will be utilized by the Grantee, and its agents,
employees or contractors for the right of ingress, egress and access to the
Transmission Facilities Site, for the inspection, construction, commissioning,
operation and maintenance, capital upgrades and improvements to, repair and
reconstruction of, and retirement, and decommissioning of the Transmission
Facilities, provided that Grantor and Grantee agree to reasonably cooperate with
respect to such matters.  In the exercise of such easement rights, Grantee shall
cause:  (i) the Grantees and its designees, as long as the JOOA has not expired
or been terminated, not to interfere with the construction, commissioning,
operation and maintenance, capital upgrades and improvements to, repair and
reconstruction of, and retirement and decommissioning of the Transmission
Facilities or any portion thereof by the Operator under the JOOA or to pose a
safety hazard; (ii) the Grantee and its designees to comply with any
requirements of any rights-of-ways, license, easement or other real property
interest agreement applicable to the Transmission Facilities, which are in
effect as of the date hereof and any other requirements set forth in agreements
arising after the date hereof with respect to which Grantee receives written
notice; (iii) the Grantee to provide reasonable prior written notice to the
Grantor of its intent to exercise any right or privilege granted by this
Easement; and (iv) the Grantee

 

--------------------------------------------------------------------------------

 

 

 

 

 and its designees exercising any right or privilege under this Easement to
comply with the Grantor’s or any other contractor’s safety and operational
procedures and security rules, provided that such procedures and rules are in
writing and are delivered to Grantee in advance.

The Grantor does hereby grant and convey to the Grantee an easement for the
nonexclusive right for the location of equipment in which the Grantee has an
ownership interest, including the equipment described in Exhibit B hereto,
together with any replacements, capital upgrades or improvements thereto
(hereinafter “Equipment”), on the Transmission Facilities Site, to be utilized
by the Grantee to locate Equipment on such premises, together with an easement
to access said Equipment over and across the Transmission Facilities Site.  Any
replacements, capital upgrades or improvements to the Equipment shall be made in
accordance with the provisions of the JOOA prior to its expiration or
termination.

Capitalized terms used in this access easement agreement but not otherwise
defined herein, shall have the meanings given such terms in the JOOA.

Any notice required or permitted under this Easement shall be provided in
accordance with the notice provisions of Section 20.01 of the JOOA.

The rights granted herein shall terminate if the Grantee no longer needs the
easements for uses described herein and so notifies Grantor in writing.

 

GRANTOR: IDAHO POWER COMPANY

GRANTEE: PACIFICORP

___________________________________

_________________________________

___________________________________

_________________________________

By:

By:

___________________________________

_________________________________

Its:

Its:      

 

 

 

 

 

 

 

 

                                                                               

--------------------------------------------------------------------------------

 

 

 

 

 

STATE OF _________   )

COUNTY OF _______   )

 

On this                         day of
                                                , 2010, before me, a Notary
Public, personally appeared ______________________________,
_______________________________________ of Idaho Power Company, that executed
the within instrument, and acknowledged to me that such corporation executed the
same as the free act and deed of said corporation.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.

 

(NOTARY SEAL)

 

 

 

 

Notary Public

 

 

 

Residing at:

 

 

 

My Commission expires:

 

 

 

[ADDITIONAL NOTARY ON FOLLOWING PAGE]

 

                                                                               

--------------------------------------------------------------------------------

 

 

 

 

 

STATE OF _________   )

COUNTY OF _______   )

 

On this                         day of
                                                , 2010, before me, a Notary
Public, personally appeared ______________________________,
_______________________________________ of PacifiCorp, that executed the within
instrument, and acknowledged to me that such corporation executed the same as
the free act and deed of said corporation.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.

 

(NOTARY SEAL)

 

 

 

 

Notary Public

 

 

 

Residing at:

 

 

 

My Commission expires:

 

 

                                                                               

--------------------------------------------------------------------------------

 

 

 

 

 

 

EXHIBIT A

Description of the Transmission Facilities Site

A parcel of land located in the S 1/2 of the NW 1/4 and the N 1/2 of the SW 1/4
and the S 1/2 of the NE 1/4 of Section 11, T. 1S., R. 3W., B.M., Owyhee County,
Idaho, more particularly described as follows:  Commencing at an aluminum cap
marking the East 1/4 corner of said Section 11, from which a 5/8” iron pin
marking the Northeast corner of said section bears North 00°51’35” East, 2634.17
feet;  Thence along the mid-section line North 89°13’35” West, 96.79 feet to a
point lying on the Westerly right-of-way of State Highway 78 and the REAL POINT
OF BEGINNING.

Thence continuing along said mid-section line North 89°13’35” West, 2575.51 feet
to the Center 1/4 of Section11;

Thence along the East line of the Northeast 1/4 of the Southwest 1/4 of said
Section 11 South 00°59’54” West, 1,317.77 feet to the Center-South 1/16 corner
of said Section 11;

Thence along the South line of the said North 1/2 of the Southwest 1/4 of
Section 11 North 89°14’11” West, 1,993.10 feet;

Thence North 25°53’47” West, 203.54 feet;

Thence North 25°46’49” East, 2,543.71 feet;

Thence South 64°13’11” East, 1,984.81 feet;

Thence South 89°13’35” East, 1,723.88 feet to the intersection with the said
westerly right-of-way of State Highway 78;

Thence along said westerly right-of-way South 10°44’30” East, 336.78 feet to the
REAL POINT OF BEGINNING.

And also:

A parcel of land being the Northwest Quarter of the Southeast Quarter of Section
11 Township 1 South, Range 3 West, Boise Meridian, Owyhee County, Idaho, more
particularly described as follows:

Beginning at the Northwest corner of said Northwest Quarter of the Southeast
Quarter, (Center ¼ corner), said corner monumented with a 5/8 inch diameter iron
pin; thence South 89°13’27” East, a distance of 1336.21 feet along the Northerly
boundary of said Northwest Quarter of the Southeast Quarter to the Northeast
corner of said Northwest Quarter of the Southeast Quarter, said corner
monumented with a 1½ inch diameter aluminum disk; thence

 

                                                                               

--------------------------------------------------------------------------------

 

 

 

 

 

South 00°56’01” West, a distance of 1317.48 feet along the Easterly boundary of
said Northwest Quarter of the Southeast Quarter to the Southeast corner of said
Northwest Quarter of the Southeast Quarter, said corner monumented with a 3-inch
diameter B.L.M. aluminum disk: thence

North 89°14’16” West, a distance of 1337.76 feet along the Southerly boundary of
said Northwest Quarter of the Southeast Quarter to the Southwest corner of said
Northwest Quarter of the Southeast Quarter, said corner monumented with a 3-inch
diameter B.L.M. aluminum disk; thence

North 01°00’02” East, a distance of 1317.80 feet along the Westerly boundary of
said Northwest Quarter of the Southeast Quarter to the POINT OF BEGINNING

                                                                               

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT B

Description of Equipment

The Equipment will include all of the equipment and facilities described below
in this Exhibit B which is installed at the Transmission Facilities Site as of
the date of this deed.

The Equipment includes all above ground 500kV structures, bus, and equipment and
associated foundations starting at the 230kV side of the transformer high-side
air break, 501H, to the extents of the station yard where the Midpoint Station
(MPSN) 1 and Summer Lake (SMLK) line terminals depart to the tap line segments. 
The major equipment included in the Equipment consists of six 500kV breakers and
one spare 500kV breaker (stored on location),  seventeen 500kV air breaks, one
SMLK line reactor bank (three 1-phase units), and one shunt capacitor bank and
associated barrier fence attached to bus #2.  Also included in the Equipment are
13 control, protection and line carrier panels, 3 intertie cabinets and their
associated control cables from the panels to the yard equipment.  The Equipment
also includes all components associated with both tap segments for the MPSN 1
and SMLK line terminals extending and connecting to the existing MPSN—SMLK line.

STATION

 

 

 

 

QTY

Equipment Description

Item

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 2000Amp

206

1

Power Circuit Breaker, 550kV 2000Amp

204

1

Power Circuit Breaker, 550kV 2000Amp

204

10

Local Equipment Annunciator Units for Reactors and Breakers

 

1

Shunt Reactor, 317.5/550kV, 44.33 MVA

201-1

1

Shunt Reactor, 317.5/550kV, 44.33 MVA

201-1

1

Shunt Reactor, 317.5/550kV, 44.33 MVA

201-1

 

                                                                               

--------------------------------------------------------------------------------

 

1

Shunt Capacitor, 550kV 220MVAR Expandable to 330MVAR

203

13

Switch, Motor Operated Airbreak, 500kV 4000A

208

3

Switch, Motor Operated Airbreak, 500kV 2000A

209-1

1

Switch, Motor Operated Airbreak w/ GND Switch, 500kV 2000A

209-2

12

Capacitor Voltage Transformer, 500kV

211

6

Capacitor Voltage Transformer, 500kV w/ Carrier Accessories

212

6

Line Trap, 500kV 3000A

214-1

6

Line Tuner, Single Phase Units

214-2

12

Surge Arrestor, 318kV MCOV

215

6

Surge Arrestor, 144kV MCOV

238

138

Insulator, Station Post, 500kV 1800BIL

217

48

Insulator, Station Post, 500kV 1800BIL

218

153

Insulator, Suspension, Polymer 500kV Class

220

 

 

 

QTY

Structure Description

Item

2

Steel Structure, 500kV Line-Deadend A-Frame Structure

100-1

4

Steel Structure, 500kV Line-Deadend A-Frame Structure

100-2

51

Steel Structure, 500kV 3-ph Airbreak Support

106-1

12

Steel Structure, 500kV CCVT Structure

107-1

6

Steel Structure, 500kV Line Trap Structure

107-2

9

Steel Structure, 500kV Surge Arrestor Structure

108

 

                                                                               

--------------------------------------------------------------------------------

 

10

Steel Structure, 500kV Strain Bus A-Frame Structure

101

2

Steel Structure, 500kV Transfer Bus Structure, Reactor

103

2

Steel Structure, 500kV Transfer Bus Structure, Spare for Reactor

103

6

Steel Structure, 500kV 3-ph Bus Support, Future Airbreak Support

106-2

117

Steel Structure, Lally, 500kV 1-ph Low Bus Support

110

3

Steel Structure, Lally, 500kV 1-ph Low Bus Support

110

16

Steel Structure, Lally, 500kV 1-ph Low Bus Support

111

 

 

 

QTY

Conductor Description

Item

3,500 ft

Conductor, 6” Aluminum Pipe, Schedule 80, 6063-T6

300

3,500 ft

Conductor, 1590 ACSR (Dampening for 6” Bus)

303

20,000 ft

Conductor, Strain Bus, 1780 ACSS “CHUKAR” 1.601 Diameter

304

6,750 ft

Conductor, 3/8” EHS Shield Wire

306

75,615 ft

Control Cable

 

 

 

 

QTY

Panel Description

P Number

1

Panel E9: SMLK 11-1 (Pri. #1 Relay)

5933

1

Panel E10: SMLK 11-2 (Pri. #2 Relay & 535A/536A Control)

5934

1

Panel E11: SMLK 11-3 (Pri. #3 Relay)

5935

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

1

Panel E12: SMLK L511 Protection & 511Z Control

5936

1

Panel E13: SMLK 511Z BF & Lockout

5937

1

Panel F14: RAS A & B (MPSN-HMWY-SMLK Remedial Action)

5947

1

Panel G13: MPSN#1 Power Line Carriers (RFL-9780-1, RFL-9780-2)

5953

1

Panel G14: SMLK Power Line Carriers (RFL-9780-1, RFL-9780-2)

5954

1

Panel H9: MPSN#1 11-1 (Pri. #1 Relay)

5955

1

Panel H10: MPSN#1 11-2 (Pri. #2 Relay & 538A/539A Control)

5956

1

Panel H11: MPSN#1 11-3 (Pri. #3 Relay)

5957

1

Panel L13: C513 11-1 (Pri. #1 Relay & 513W Control)

5966

1

Panel L14: C513 11-2 (Pri. #2 Relay)

5967

13

Panel Rack and Frames

 

1

Intertie Cabinet EF2: SUMMER LAKE 500kV LINE (535A/536A/511Z/L511/CCVT’s)

5985

1

Intertie Cabinet GH@: MPSN #1 500kV LINE (538A/539A/CCVT’s)

5987

1

Intertie Cabinet KL2: MPSN #2 500kV LINE(FUTURE) / C513

5991

 

 

 

QTY

Foundation Description

 

156

Other structures (for Items 101, 103, 106-2, 100, 111)

 

6

Deadend Structures (for Items 100-1 and 100-2)

 

78

Equipment Structures

 

 

--------------------------------------------------------------------------------

 

 

3

Reactor oil containment

 

370 ft

Fence, Capacitor Bank Barrier

 

6

Key Interlock for Capacitor Bank Barrier Fence

 

 

 

 

TAP

 

 

 

 

 

QTY

Line Material Description

 

8

Dead-end, Single Pole Tubular Steel w/ Foundation

 

2

Tangent, Single Pole Tubular Steel w/ Foundation

 

2406

Insulator, 10” 52-5 b&s 30k

 

6

Insulator, Horizontal Post 500kV

 

40,500 ft

Conductor,  1272 ACSR 45/7 Bitten

 

8,500 ft

Overhead Ground Wire, 3/8 EHS Steel

 

 

 

 

                                                                               

--------------------------------------------------------------------------------

 

 

 

 

 

Exhibit J

Form of Populus Easement Agreement

 

 

Recorded at the request of and

When recorded mail to:

 

Gil Green

Idaho Power Company

P. O. Box 70

Boise, Idaho 83707

 

EASEMENT AGREEMENT

 

 

FOR VALUE RECEIVED THIS EASEMENT AGREEMENT, MADE this ____ day of ________, 2010
by and between PACIFICORP, an Oregon corporation its successors and assigns
(hereinafter called “Grantor”), and IDAHO POWER COMPANY, an Idaho Corporation,
its successors and assigns (hereinafter called “ Grantee”) and

The Grantor does hereby grant and convey to the Grantee an easement for the
nonexclusive right to use and access the Grantor’s property set forth in the
description attached hereto as Exhibit A (the “Transmission Facilities Site”).

 

The property easement will be utilized by the Grantee and its agents, employees
or contractors for the use of, and rights of ingress, egress and access to, the
Transmission Facilities Site to permit the Grantee and its designees to exercise
Grantee’s rights, duties, and privileges as described in the Hemingway Joint
Ownership and Operating Agreement dated May 3, 2010, entered into by the Grantee
and Grantor (“JOOA”).  The rights of the Grantee and its agents, employees or
contractors for use of, ingress, egress and access to the Transmission
Facilities Site shall be governed by Section 5.06(a) of the JOOA, during the
period the JOOA is in effect, including during any period after the JOOA has
been terminated but the surviving provisions identified in Section 2.05(b)
(including Section 5.06(a)) remain in effect.  If the JOOA terminates or
expires, the property easement will be utilized by the Grantee, and its agents,
employees or contractors for the right of ingress, egress and access to the
Transmission Facilities Site, for the inspection, construction, commissioning,
operation and maintenance, capital upgrades and improvements to, repair and
reconstruction of, and retirement, and decommissioning of the Transmission
Facilities, provided that Grantor and Grantee agree to reasonably cooperate with
respect to such matters.  In the exercise of such easement rights, Grantee shall
cause:  (i) the Grantees and its designees, as long as the JOOA has not expired
or been terminated, not to interfere with the construction, commissioning,
operation and maintenance, capital upgrades and improvements to, repair and
reconstruction of, and retirement and decommissioning of the Transmission
Facilities or any portion thereof by the Operator under the JOOA or to pose a
safety hazard; (ii) the Grantee and its designees to comply with any
requirements of any rights-of-ways, license, easement or other real property
interest agreement
 

 

--------------------------------------------------------------------------------

 

 

 

 

applicable to the Transmission Facilities, which are in effect as of the date
hereof and any other requirements set forth in agreements arising after the date
hereof with respect to which Grantee receives written notice; (iii) the Grantee
to provide reasonable prior written notice to the Grantor of its intent to
exercise any right or privilege granted by this Easement; and (iv) the Grantee
and its designees exercising any right or privilege under this Easement to
comply with the Grantor’s or any other contractor’s safety and operational
procedures and security rules, provided that such procedures and rules are in
writing and are delivered to Grantee in advance.

The Grantor does hereby grant and convey to the Grantee an easement for the
nonexclusive right for the location of equipment in which the Grantee has an
ownership interest, including the equipment described in Exhibit B hereto,
together with any replacements, capital upgrades or improvements thereto
(hereinafter “Equipment”), on the Transmission Facilities Site, to be utilized
by the Grantee to locate Equipment on such premises, together with an easement
to access said Equipment over and across the Transmission Facilities Site.  Any
replacements, capital upgrades or improvements to the Equipment shall be made in
accordance with the provisions of the JOOA prior to its expiration or
termination.

Capitalized terms used in this access easement agreement but not otherwise
defined herein, shall have the meanings given such terms in the JOOA.

Any notice required or permitted under this Easement shall be provided in
accordance with the notice provisions of Section 20.01 of the JOOA.

The rights granted herein shall terminate if the Grantee no longer needs the
easements for uses described herein and so notifies Grantor in writing.

GRANTOR: PACIFICORP

GRANTEE: IDAHO POWER COMPANY

___________________________________

_________________________________ 

By: ________________________________

By: ______________________________

Its: ________________________________

Its: ______________________________

   

 

STATE OF _________   )

COUNTY OF _______   )

On this             day of                                                 ,
2010, before me, a Notary Public, personally appeared
______________________________, ______________________________of PacifiCorp,
that executed the within instrument, and acknowledged to me that such
corporation executed the same as the free act and deed of said corporation.

 

                                                                               

--------------------------------------------------------------------------------

 

 

 

 

 

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.

(NOTARY SEAL)

 

 

 

 

Notary Public

 

 

 

Residing at:

 

 

 

My Commission expires:

 

[ADDITIONAL NOTARY ON FOLLOWING PAGE]

                                                                               

--------------------------------------------------------------------------------

 

 

 

 

 

STATE OF _________   )

COUNTY OF _______   )

 

On this                         day of
                                                , 2010, before me, a Notary
Public, personally appeared ______________________________,
_______________________________________ of Idaho Power Company, that executed
the within instrument, and acknowledged to me that such corporation executed the
same as the free act and deed of said corporation.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.

 

(NOTARY SEAL)

 

 

 

 

Notary Public

 

 

 

Residing at:

 

 

 

My Commission expires:

                                                                               

--------------------------------------------------------------------------------

 

 

 

 

 

 

EXHIBIT A

Description of the Transmission Facilities Site

A parcel of land situate in the East Half and the East Half of the Northwest
Quarter of Section 32, Township 11 South, Range 37 East and the Northeast
Quarter of the Northeast Quarter of Section 5, Township 12 South, Range 37 East,
Boise Meridian, Bannock County, Idaho. The boundaries of said parcel are
described as follows, to wit:

Beginning at a point which is 1676.62 feet S.00°51’01”W along the section line
from the Northeast Corner of said Section 32 and running thence S.00°51’01”W
968.72 feet to the East Quarter Corner of said Section 32; thence S.00°13’36”E
2645.12 feet to the Southeast Corner of said Section 32; thence S.00°11’13”W
1303.25 feet along the section line to the Southeast corner of the Northeast
Quarter of the Northeast Quarter of said Section 5; thence N.89°32’18”W 353.00
feet along the south line of said Northeast Quarter of the Northeast Quarter of
Section 5; thence N.00°28’56”E 4336.61 feet; thence N.89°29’04”W 1090.62 feet;
thence S.00°30’56”W 219.04 feet; thence N.89°29’04”W 678.13 feet; thence
N.00°30’56”E 434.59 feet; thence S.89°40’21”W 1892.26 feet to the west line of
the East Half of the Northwest Quarter of said Section 32; thence N.00°17’47”E
390.57 feet along said west line; thence S.89°31’02”E 3981.75 feet to the point
of beginning. The above-described parcel contains 3,523,114 square feet or
80.880 acres, more or less.

                                                                               

--------------------------------------------------------------------------------

 

 

 

 

 

EXHIBIT B

Description of Equipment

The Equipment will include all of the equipment and facilities described below
in this Exhibit B which is installed at the Transmission Facilities Site as of
the date of this deed.

The Equipment includes all above ground 345kV structures, bus, breakers,
capacitors, associated equipment and foundations as listed below.  The major
equipment included in the Equipment consists of sixteen 345 kV breakers,
thirty-five air breaks, two line reactors, two series capacitor banks, one shunt
capacitor bank and eleven coupling capacitor voltage transformers (CCVT),
including all components associated with connection of the Bridger-Populus
Transmission Lines (#s 1 and 2), the Populus–Borah Transmission Lines (#s 1 and
2), the Populus–Ben Lomond Transmission Lines (#s 1, 2 and 3) and the
Populus–Kinport Transmission Line.

Transmission Line

 

 

 

 

Item

 

Description

Qnty

Dead End

Mono pole steel

10

Tangent

Mono pole steel

35

Dead End

Three pole steel

10

 

 

 

Substation

Item

Description 

Qnty

345 kV breaker

362kV, 3000A, 50kA, Gas Filled, w/Pre-insertion Resistors

13

 

322, 327, 328, 342, 343, 346, 347, 348, 362, 363, 366, 367, 368

 

 

 

 

345 kV breaker

362kV, 2000A, 50kA, Gas Filled, for shunt reactor

2

 

R393, R392

 

 

 

 

345 kV breaker

362kV, 3000A, 50kA, Gas Filled, for Capacitor Bank

1

 

C329

 

 

 

 

345 kV switch

362kV, 3000A, Vertical Break, W/Ground Switch (Line)

8

 

 

 

345 kV Switch

362kV, 3000A, Vertical Break (Breaker Isolation)

20

 

 

 

345 kV Switch

362kV, 2000A, Vertical Break (Capacitor & Reactor)

3

 

 

 

345 kV Switch

362kV, 3000A, Vertical Break, W/Ground Switch

4

 

382G, 352G, 383G, 353G

 

 

 

 

345 kV CCVT

1550KV BIL, 1800/3000:1, No Carrier Accessories

6

 

--------------------------------------------------------------------------------

 

345 kV CCVT

1550KV BIL, 1800/3000:1, With Carrier Accessories

5

 

 

 

345 kV CT/VT

CT/VT Metering Units, 345kV

15

 

 

 

345 kV Capacitor

 

 

 

Bank

362kV, 220/F275 MVar

1

 

 

 

345 kV Series

 

 

 

Capacitor

347-262 kV, 1550 kV BIL

2

 

 

 

345 kV Reactors

362kV, 100MVA

2

 

 

 

Insulator

Station Post, 345kV

738

 

 

 

Insulator

Suspension, 345kV

48

 

 

 

Bus

Rigid and Wire Bus, Assemblies, and Connectors

1

 

 

 

Bus

Rigid & Wire Bus, Ass. & Connectors – 345kV Series Capacitor

2

 

 

 

Security

Security System, Conduit Installation

1

 

 

 

Communications

Power Line Carrier, With All Additional Equipment

5

 

 

 

Line Traps

345kV, 3000A

5

 

 

 

Lightning Arresters

345 kV, 212kV MCOV

24

 

 

 

Oil Containment

System and Foundation

1

 

 

 

Foundations

Concrete - Drilled Piers

5685 Yds

 

 

 

Steel

Structural Steel Supports

2374881 lbs.

 

 

 

 

                                                                               

--------------------------------------------------------------------------------

 

 

 

 

 

Exhibit K

Description of Hemingway Substation Site

 

A parcel of land located in the S 1/2 of the NW 1/4 and the N 1/2 of the SW 1/4
and the S 1/2 of the NE 1/4 of Section 11, T. 1S., R. 3W., B.M., Owyhee County,
Idaho, more particularly described as follows:  Commencing at an aluminum cap
marking the East 1/4 corner of said Section 11, from which a 5/8” iron pin
marking the Northeast corner of said section bears North 00°51’35” East, 2634.17
feet;  Thence along the mid-section line North 89°13’35” West, 96.79 feet to a
point lying on the Westerly right-of-way of State Highway 78 and the REAL POINT
OF BEGINNING.

 

Thence continuing along said mid-section line North 89°13’35” West, 2575.51 feet
to the Center 1/4 of Section11;

Thence along the East line of the Northeast 1/4 of the Southwest 1/4 of said
Section 11 South 00°59’54” West, 1,317.77 feet to the Center-South 1/16 corner
of said Section 11;

Thence along the South line of the said North 1/2 of the Southwest 1/4 of
Section 11 North 89°14’11” West, 1,993.10 feet;

Thence North 25°53’47” West, 203.54 feet;

Thence North 25°46’49” East, 2,543.71 feet;

Thence South 64°13’11” East, 1,984.81 feet;

Thence South 89°13’35” East, 1,723.88 feet to the intersection with the said
westerly right-of-way of State Highway 78;

 

Thence along said westerly right-of-way South 10°44’30” East, 336.78 feet to the
REAL POINT OF BEGINNING.

 

And also:

 

A parcel of land being the Northwest Quarter of the Southeast Quarter of Section
11 Township 1 South, Range 3 West, Boise Meridian, Owyhee County, Idaho, more
particularly described as follows:

 

Beginning at the Northwest corner of said Northwest Quarter of the Southeast
Quarter, (Center ¼ corner), said corner monumented with a 5/8 inch diameter iron
pin; thence South 89°13’27” East, a distance of 1336.21 feet along the Northerly
boundary of said Northwest Quarter of the Southeast Quarter to the Northeast
corner of said Northwest Quarter of the Southeast Quarter, said corner
monumented with a 1½ inch diameter aluminum disk; thence

South 00°56’01” West, a distance of 1317.48 feet along the Easterly boundary of
said Northwest Quarter of the Southeast Quarter to the Southeast corner of said
Northwest Quarter of the Southeast Quarter, said corner monumented with a 3-inch
diameter B.L.M. aluminum disk: thence

North 89°14’16” West, a distance of 1337.76 feet along the Southerly boundary of
said Northwest Quarter of the Southeast Quarter to the Southwest corner of said
Northwest Quarter of the Southeast Quarter, said corner monumented with a 3-inch
diameter B.L.M. aluminum disk; thence

 

--------------------------------------------------------------------------------

 

 

 

 

 

North 01°00’02” East, a distance of 1317.80 feet along the Westerly boundary of
said Northwest Quarter of the Southeast Quarter to the POINT OF BEGINNING

 

 

 

                                                                               

--------------------------------------------------------------------------------

 

 

 

 

 

Exhibit L

Description of Populus Substation Site

 

A parcel of land situate in the East Half and the East Half of the Northwest
Quarter of Section 32, Township 11 South, Range 37 East and the Northeast
Quarter of the Northeast Quarter of Section 5, Township 12 South, Range 37 East,
Boise Meridian, Bannock County, Idaho. The boundaries of said parcel are
described as follows, to wit:

Beginning at a point which is 1676.62 feet S.00°51’01”W along the section line
from the Northeast Corner of said Section 32 and running thence S.00°51’01”W
968.72 feet to the East Quarter Corner of said Section 32; thence S.00°13’36”E
2645.12 feet to the Southeast Corner of said Section 32; thence S.00°11’13”W
1303.25 feet along the section line to the Southeast corner of the Northeast
Quarter of the Northeast Quarter of said Section 5; thence N.89°32’18”W 353.00
feet along the south line of said Northeast Quarter of the Northeast Quarter of
Section 5; thence N.00°28’56”E 4336.61 feet; thence N.89°29’04”W 1090.62 feet;
thence S.00°30’56”W 219.04 feet; thence N.89°29’04”W 678.13 feet; thence
N.00°30’56”E 434.59 feet; thence S.89°40’21”W 1892.26 feet to the west line of
the East Half of the Northwest Quarter of said Section 32; thence N.00°17’47”E
390.57 feet along said west line; thence S.89°31’02”E 3981.75 feet to the point
of beginning. The above-described parcel contains 3,523,114 square feet or
80.880 acres, more or less.

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

Exhibit M

Form of Hemingway Deed

 

Recorded at the request of and

When recorded mail to:

 

Gil Green

Idaho Power Company

P. O. Box 70

Boise, Idaho 83707

DEED

 

FOR VALUE RECEIVED, IDAHO POWER COMPANY, an Idaho corporation, whose address is
1221 W. Idaho Street, Boise, Idaho 83702 (“Grantor”), does hereby grant,
bargain, sell and convey unto PACIFICORP, an Oregon corporation (“Grantee”),
 its successors and assigns, a fifty-nine percent (59.0%) undivided ownership
interest, as tenant in common, in the following described equipment, located in
Owyhee County, Idaho (as described in Exhibit A hereto, hereinafter the
“Equipment”), pursuant to the Joint Purchase and Sale Agreement dated April 30,
2010 (“JPSA”) between the Grantor and Grantee.

 

The Equipment described in Exhibit A is located on real property owned by
Grantor in the S ½ of the NW ¼ and the N ½ of the SW ¼ and the S ½ of the NE ¼
and the NW ¼ of the SE ¼ of Section 11, T. 1S., R. 3W., B.M., Owyhee County,
Idaho, as more particularly described on Exhibit B hereto (the “Land”).

 

This deed in not intended in any way to convey any interest in any real property
on which the Equipment is located.

 

The Grantor covenants to the Grantee that Grantor is the owner of the Equipment;
that the Equipment is free from Encumbrances other than Idaho Power Permitted
Encumbrances, as each term is defined in the JPSA.

 

TO HAVE AND TO HOLD said partial ownership interest in the Equipment, unto
Grantee, and Grantee’s successors and assigns forever.

 

IN WITNESS WHEREOF, the Grantor has executed this instrument on this ____ day of
______, 2010.

 

GRANTOR:

IDAHO POWER COMPANY,

 

an Idaho Corporation

 

 

 

By:  _________________________________

 

 

  Its:  _________________________________

 

                                                                                                       
  

--------------------------------------------------------------------------------

 

 

 

 

 

 

STATE OF                              )

ss.

County of                                )

 

On this _____ day of _____________, 2010, before me, the undersigned Notary
Public in and for said State, personally appeared _________________, known or
identified to me to be the ____________________ of _________________, an Idaho
corporation, and the corporation that executed the within instrument, or the
person who executed the instrument in behalf of said corporation, and
acknowledged to me that such corporation executed the same.

 

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.

 

                                                                     

Notary Public for                                           

My Commission expires:                                
                                                                                                       
  

--------------------------------------------------------------------------------

 

 

 

 

 

Exhibit A

 

Description of Equipment

 

The Equipment will include all of the equipment and facilities described below
in this Exhibit A which are installed at the Land as of the date of this deed.

 

The Equipment includes all above ground 500kV structures, bus, and equipment and
associated foundations starting at the 230kV side of the transformer high-side
air break, 501H, to the extents of the station yard where the Midpoint Station
(MPSN) 1 and Summer Lake (SMLK) line terminals depart to the tap line segments. 
The major equipment included in the Equipment consists of six 500kV breakers and
one spare 500kV breaker (stored on location),  seventeen 500kV air breaks, one
SMLK line reactor bank (three 1-phase units), and one shunt capacitor bank and
associated barrier fence attached to bus #2.  Also included in the Equipment are
13 control, protection and line carrier panels, 3 intertie cabinets and their
associated control cables from the panels to the yard equipment.  The Equipment
also includes all components associated with both tap segments for the MPSN 1
and SMLK line terminals extending and connecting to the existing MPSN—SMLK line.

 

STATION

 

 

 

 

QTY

Equipment Description

Item

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 4000Amp

205

1

Power Circuit Breaker, 550kV 2000Amp

206

1

Power Circuit Breaker, 550kV 2000Amp

204

1

Power Circuit Breaker, 550kV 2000Amp

204

10

Local Equipment Annunciator Units for Reactors and Breakers

 

1

Shunt Reactor, 317.5/550kV, 44.33 MVA

201-1

1

Shunt Reactor, 317.5/550kV, 44.33 MVA

201-1

1

Shunt Reactor, 317.5/550kV, 44.33 MVA

201-1

1

Shunt Capacitor, 550kV 220MVAR

203

 

                                                                             

--------------------------------------------------------------------------------

 

 

Expandable to 330MVAR

 

13

Switch, Motor Operated Airbreak, 500kV 4000A

208

3

Switch, Motor Operated Airbreak, 500kV 2000A

209-1

1

Switch, Motor Operated Airbreak w/ GND Switch, 500kV 2000A

209-2

12

Capacitor Voltage Transformer, 500kV

211

6

Capacitor Voltage Transformer, 500kV w/ Carrier Accessories

212

6

Line Trap, 500kV 3000A

214-1

6

Line Tuner, Single Phase Units

214-2

12

Surge Arrestor, 318kV MCOV

215

6

Surge Arrestor, 144kV MCOV

238

138

Insulator, Station Post, 500kV 1800BIL

217

48

Insulator, Station Post, 500kV 1800BIL

218

153

Insulator, Suspension, Polymer 500kV Class

220

 

 

 

QTY

Structure Description

Item

2

Steel Structure, 500kV Line-Deadend A-Frame Structure

100-1

4

Steel Structure, 500kV Line-Deadend A-Frame Structure

100-2

51

Steel Structure, 500kV 3-ph Airbreak Support

106-1

12

Steel Structure, 500kV CCVT Structure

107-1

6

Steel Structure, 500kV Line Trap Structure

107-2

9

Steel Structure, 500kV Surge Arrestor Structure

108

10

Steel Structure, 500kV Strain Bus A-Frame Structure

101

2

Steel Structure, 500kV Transfer Bus Structure, Reactor

103

2

Steel Structure, 500kV Transfer Bus Structure, Spare for Reactor

103

6

Steel Structure, 500kV 3-ph Bus Support, Future Airbreak Support

106-2

117

Steel Structure, Lally, 500kV 1-ph Low Bus Support

110

 

                                                                             

                                                                                                       
  

--------------------------------------------------------------------------------

 

3

Steel Structure, Lally, 500kV 1-ph Low Bus Support

110

16

Steel Structure, Lally, 500kV 1-ph Low Bus Support

111

 

 

 

QTY

Conductor Description

Item

3,500 ft

Conductor, 6” Aluminum Pipe, Schedule 80, 6063-T6

300

3,500 ft

Conductor, 1590 ACSR (Dampening for 6” Bus)

303

20,000 ft

Conductor, Strain Bus, 1780 ACSS “CHUKAR” 1.601 Diameter

304

6,750 ft

Conductor, 3/8” EHS Shield Wire

306

75,615 ft

Control Cable

 

 

 

 

QTY

Panel Description

P Number

1

Panel E9: SMLK 11-1 (Pri. #1 Relay)

5933

1

Panel E10: SMLK 11-2 (Pri. #2 Relay & 535A/536A Control)

5934

1

Panel E11: SMLK 11-3 (Pri. #3 Relay)

5935

1

Panel E12: SMLK L511 Protection & 511Z Control

5936

1

Panel E13: SMLK 511Z BF & Lockout

5937

1

Panel F14: RAS A & B (MPSN-HMWY-SMLK Remedial Action)

5947

1

Panel G13: MPSN#1 Power Line Carriers (RFL-9780-1, RFL-9780-2)

5953

1

Panel G14: SMLK Power Line Carriers (RFL-9780-1, RFL-9780-2)

5954

1

Panel H9: MPSN#1 11-1 (Pri. #1 Relay)

5955

1

Panel H10: MPSN#1 11-2 (Pri. #2 Relay & 538A/539A Control)

5956

1

Panel H11: MPSN#1 11-3 (Pri. #3 Relay)

5957

1

Panel L13: C513 11-1 (Pri. #1 Relay & 513W Control)

5966

1

Panel L14: C513 11-2 (Pri. #2 Relay)

5967

13

Panel Rack and Frames

 

1

Intertie Cabinet EF2: SUMMER LAKE 500kV LINE (535A/536A/511Z/L511/CCVT’s)

5985

1

Intertie Cabinet GH@: MPSN #1 500kV LINE (538A/539A/CCVT’s)

5987

1

Intertie Cabinet KL2: MPSN #2 500kV

5991

 

 

--------------------------------------------------------------------------------

 

                                                                                                       
  

 

LINE(FUTURE) / C513

 

 

 

 

QTY

Foundation Description

 

156

Other structures (for Items 101, 103, 106-2, 100, 111)

 

6

Deadend Structures (for Items 100-1 and 100-2)

 

78

Equipment Structures

 

3

Reactor oil containment

 

370 ft

Fence, Capacitor Bank Barrier

 

6

Key Interlock for Capacitor Bank Barrier Fence

 

 

 

 

TAP

 

 

 

 

 

QTY

Line Material Description

 

8

Dead-end, Single Pole Tubular Steel w/ Foundation

 

2

Tangent, Single Pole Tubular Steel w/ Foundation

 

2406

Insulator, 10” 52-5 b&s 30k

 

6

Insulator, Horizontal Post 500kV

 

40,500 ft

Conductor,  1272 ACSR 45/7 Bitten

 

8,500 ft

Overhead Ground Wire, 3/8 EHS Steel

 

 

                                                                             

--------------------------------------------------------------------------------

 

 

 

 

 

Exhibit B

 

Description of Land

 

A parcel of land located in the S 1/2 of the NW 1/4 and the N 1/2 of the SW 1/4
and the S 1/2 of the NE 1/4 of Section 11, T. 1S., R. 3W., B.M., Owyhee County,
Idaho, more particularly described as follows:  Commencing at an aluminum cap
marking the East 1/4 corner of said Section 11, from which a 5/8” iron pin
marking the Northeast corner of said section bears North 00°51’35” East, 2634.17
feet;  Thence along the mid-section line North 89°13’35” West, 96.79 feet to a
point lying on the Westerly right-of-way of State Highway 78 and the REAL POINT
OF BEGINNING.

 

Thence continuing along said mid-section line North 89°13’35” West, 2575.51 feet
to the Center 1/4 of Section11;

Thence along the East line of the Northeast 1/4 of the Southwest 1/4 of said
Section 11 South 00°59’54” West, 1,317.77 feet to the Center-South 1/16 corner
of said Section 11;

Thence along the South line of the said North 1/2 of the Southwest 1/4 of
Section 11 North 89°14’11” West, 1,993.10 feet;

Thence North 25°53’47” West, 203.54 feet;

Thence North 25°46’49” East, 2,543.71 feet;

Thence South 64°13’11” East, 1,984.81 feet;

Thence South 89°13’35” East, 1,723.88 feet to the intersection with the said
westerly right-of-way of State Highway 78;

 

Thence along said westerly right-of-way South 10°44’30” East, 336.78 feet to the
REAL POINT OF BEGINNING.

 

And also:

 

A parcel of land being the Northwest Quarter of the Southeast Quarter of Section
11 Township 1 South, Range 3 West, Boise Meridian, Owyhee County, Idaho, more
particularly described as follows:

 

Beginning at the Northwest corner of said Northwest Quarter of the Southeast
Quarter, (Center ¼ corner), said corner monumented with a 5/8 inch diameter iron
pin; thence South 89°13’27” East, a distance of 1336.21 feet along the Northerly
boundary of said Northwest Quarter of the Southeast Quarter to the Northeast
corner of said Northwest Quarter of the Southeast Quarter, said corner
monumented with a 1½ inch diameter aluminum disk; thence

South 00°56’01” West, a distance of 1317.48 feet along the Easterly boundary of
said Northwest Quarter of the Southeast Quarter to the Southeast corner of said
Northwest Quarter of the Southeast Quarter, said corner monumented with a 3-inch
diameter B.L.M. aluminum disk: thence

North 89°14’16” West, a distance of 1337.76 feet along the Southerly boundary of
said Northwest Quarter of the Southeast Quarter to the Southwest corner of said
Northwest Quarter of the Southeast Quarter, said corner monumented with a 3-inch
diameter B.L.M. aluminum disk; thence

                                                                                                       
  

--------------------------------------------------------------------------------

 

 

 

 

 

North 01°00’02” East, a distance of 1317.80 feet along the Westerly boundary of
said Northwest Quarter of the Southeast Quarter to the POINT OF BEGINNING

 

 

 

                                                                                                       
  

--------------------------------------------------------------------------------

 

 

 

EXECUTION COPY

 

Exhibit N

Form of Populus Deed

 

 

Recorded at the request of and

When recorded mail to:

 

Gil Green

Idaho Power Company

P. O. Box 70

Boise, Idaho 83707

DEED

 

FOR VALUE RECEIVED, PACIFICORP, an Oregon corporation (“Grantor”), does hereby
grant, bargain, sell and convey unto IDAHO POWER COMPANY, an Idaho corporation,
whose address is 1221 W. Idaho Street, Boise, Idaho 83702 (“Grantee”),  its
successors and assigns, a twenty and eight tenths percent (20.8%) undivided
ownership interest, as tenant in common, in the following described equipment,
located in Bannock County, Idaho (as described in Exhibit A hereto, hereinafter
the “Equipment”), pursuant to the Joint Purchase and Sale Agreement dated April
30, 2010 (“JPSA”) between the Grantor and Grantee.

 

The Equipment described in Exhibit A is located on a parcel of land owned by
Grantor situate in the East Half and the East Half of the Northwest Quarter of
Section 32, Township 11 South, Range 37 East and the Northeast Quarter of the
Northeast Quarter of Section 5, Township 12 South, Range 37 East, Boise
Meridian, Bannock County, Idaho, as more particularly described on Exhibit B
hereto (the “Land”).

 

This deed in not intended in any way to convey any interest in any real property
on which the Equipment is located.

 

The Grantor covenants to the Grantee that Grantor is the owner of the Equipment;
that the Equipment is free from Encumbrances other than PacifiCorp Permitted
Encumbrances, as each term is defined in the JPSA.

 

TO HAVE AND TO HOLD said partial ownership interest in the Equipment, unto
Grantee, and Grantee’s successors and assigns forever.

 

IN WITNESS WHEREOF, the Grantor has executed this instrument on this ____ day of
_______, 2010.

 

GRANTOR:

PACIFICORP, an Oregon corporation

 

 

 

By:  ________________________________

     

 

 

 

--------------------------------------------------------------------------------

 

 

 

Its: ________________________________

 

 

STATE OF                              )

ss.

County of                                )

 

On this _____ day of _____________, 2010, before me, the undersigned Notary
Public in and for said State, personally appeared _________________, known or
identified to me to be the ____________________ of _________________, an Oregon
corporation, and the corporation that executed the within instrument, or the
person who executed the instrument in behalf of said corporation, and
acknowledged to me that such corporation executed the same.

 

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.

 

                                                                       

Notary Public for                                           

My Commission expires:                                

 

                                                                             

--------------------------------------------------------------------------------

 

 

 

 

 

Exhibit A

 

Description of Equipment

 

The Equipment will include all of the equipment and facilities described below
in this Exhibit A which is installed at the Land as of the date of this deed.

 

The Equipment includes all above ground 345kV structures, bus, breakers,
capacitors, associated equipment and foundations as listed below.  The major
equipment included in the Equipment consists of sixteen 345 kV breakers,
thirty-five air breaks, two line reactors, two series capacitor banks, one shunt
capacitor bank and eleven coupling capacitor voltage transformers (CCVT),
including all components associated with connection of the Bridger-Populus
Transmission Lines (#s 1 and 2), the Populus–Borah Transmission Lines (#s 1 and
2), the Populus–Ben Lomond Transmission Lines (#s 1, 2 and 3) and the
Populus–Kinport Transmission Line.

Transmission Line

Item

 

Description

Qnty

Dead End

Mono pole steel

10

Tangent

Mono pole steel

35

Dead End

Three pole steel

10

 

 

 

Substation

Item

Description 

Qnty

345 kV breaker

362kV, 3000A, 50kA, Gas Filled, w/Pre-insertion Resistors

13

 

322, 327, 328, 342, 343, 346, 347, 348, 362, 363, 366, 367, 368

 

 

 

 

345 kV breaker

362kV, 2000A, 50kA, Gas Filled, for shunt reactor

2

 

R393, R392

 

 

 

 

345 kV breaker

362kV, 3000A, 50kA, Gas Filled, for Capacitor Bank

1

 

C329

 

 

 

 

345 kV switch

362kV, 3000A, Vertical Break, W/Ground Switch (Line)

8

 

 

 

345 kV Switch

362kV, 3000A, Vertical Break (Breaker Isolation)

20

 

 

 

345 kV Switch

362kV, 2000A, Vertical Break (Capacitor & Reactor)

3

 

 

 

345 kV Switch

362kV, 3000A, Vertical Break, W/Ground Switch

4

 

382G, 352G, 383G, 353G

 

 

 

 

345 kV CCVT

1550KV BIL, 1800/3000:1, No Carrier Accessories

6

 

 

 

345 kV CCVT

1550KV BIL, 1800/3000:1, With Carrier Accessories

5

 

--------------------------------------------------------------------------------

 

 

345 kV CT/VT

CT/VT Metering Units, 345kV

15

 

 

 

345 kV Capacitor

 

 

 

Bank

362kV, 220/F275 MVar

1

 

 

 

345 kV Series

 

 

 

Capacitor

347-262 kV, 1550 kV BIL

2

 

 

 

345 kV Reactors

362kV, 100MVA

2

 

 

 

Insulator

Station Post, 345kV

738

 

 

 

Insulator

Suspension, 345kV

48

 

 

 

Bus

Rigid and Wire Bus, Assemblies, and Connectors

1

 

 

 

Bus

Rigid & Wire Bus, Ass. & Connectors – 345kV Series Capacitor

2

 

 

 

Security

Security System, Conduit Installation

1

 

 

 

Communications

Power Line Carrier, With All Additional Equipment

5

 

 

 

Line Traps

345kV, 3000A

5

 

 

 

Lightning Arresters

345 kV, 212kV MCOV

24

 

 

 

Oil Containment

System and Foundation

1

 

 

 

Foundations

Concrete - Drilled Piers

5685 Yds

 

 

 

Steel

Structural Steel Supports

2374881 lbs.

 

 

 

                                                                             

--------------------------------------------------------------------------------

 

 

 

 

 

Exhibit B

 

Description of Land

 

A parcel of land situate in the East Half and the East Half of the Northwest
Quarter of Section 32, Township 11 South, Range 37 East and the Northeast
Quarter of the Northeast Quarter of Section 5, Township 12 South, Range 37 East,
Boise Meridian, Bannock County, Idaho. The boundaries of said parcel are
described as follows, to wit:

Beginning at a point which is 1676.62 feet S.00°51’01”W along the section line
from the Northeast Corner of said Section 32 and running thence S.00°51’01”W
968.72 feet to the East Quarter Corner of said Section 32; thence S.00°13’36”E
2645.12 feet to the Southeast Corner of said Section 32; thence S.00°11’13”W
1303.25 feet along the section line to the Southeast corner of the Northeast
Quarter of the Northeast Quarter of said Section 5; thence N.89°32’18”W 353.00
feet along the south line of said Northeast Quarter of the Northeast Quarter of
Section 5; thence N.00°28’56”E 4336.61 feet; thence N.89°29’04”W 1090.62 feet;
thence S.00°30’56”W 219.04 feet; thence N.89°29’04”W 678.13 feet; thence
N.00°30’56”E 434.59 feet; thence S.89°40’21”W 1892.26 feet to the west line of
the East Half of the Northwest Quarter of said Section 32; thence N.00°17’47”E
390.57 feet along said west line; thence S.89°31’02”E 3981.75 feet to the point
of beginning. The above-described parcel contains 3,523,114 square feet or
80.880 acres, more or less.

 

 

                                                                             

--------------------------------------------------------------------------------

 

 

 

EXECUTION COPY

 

Schedule 1.1(a)          Hemingway Transferable Permits

 

None

                                                                                                  

 

 

Schedule 1.1(b)          Idaho Power’s Knowledge

 

Vern Porter – V.P., Engineering & Operations

Marsha Leese – Manager, Delivery Projects

Doug Dockter – Engineering Leader, 500 kV Projects

Mike Bracke – Project Leader

Todd Adams – Project Leader

 

 

 

Schedule 1.1(c)           Idaho Power Permitted Encumbrances

 

Hemingway BLM Right-of-Way Grant

 

The Mortgage and Deed of Trust, dated as of October 1, 1937, and indentures
supplemental thereto, granted by Idaho Power to Deutsche Bank Trust Company
Americas, formerly known as Bankers Trust Company and Stanley Burg, as Trustees.

 

Schedule 1.1(d)          PacifiCorp’s Knowledge

 

Lisa Symonds – Project Manager

Kenneth Houston – Director, Transmission Service

Brian Fritz – Director, Transmission Development

John Cupparo – Vice President, Transmission

 

 

Schedule 1.1(e)           PacifiCorp Permitted Encumbrances

 

Mortgage and Deed of Trust from PacifiCorp to Morgan Guaranty Trust Company of
New York (The Bank of New York Mellon Trust Company, N.A., successor), dated as
of January 9, 1989, as amended and supplemented by supplemental indentures,
including the Twenty-Third Supplemental Indenture, dated January 1, 2009 and
recorded in the records of Bannock County, Idaho on June 10, 2009, under
Recording No. 20912676

 

 

                                                                                                       

 

--------------------------------------------------------------------------------

 

 

 

EXECUTION COPY

 

 

Schedule 1.1(f)           Populus Transferable Permits

 

None

 

Schedule 3.1(e)  Exceptions to Governmental Authorizations Obtained by Idaho
Power

 

Acceptance of the Hemingway Joint Ownership and Operating Agreement for filing
by the Federal Energy Regulatory Commission under Section 205 of the Federal
Power Act (filing to occur within five (5) days following the Closing Date)

 

 

 

Schedule 3.1(f)           PacifiCorp Acquired Assets - Liabilities

 

None

 

 

Schedule 3.1(g)          PacifiCorp Acquired Assets - Title Exceptions

 

None

 

 

Schedule 3.1(h)(i)-A  PacifiCorp Acquired Assets - Environmental Permits

 

EPA NPDES General Construction Permit Number IDR10BZ05 – Stormwater Pollution
Prevention Plan (SWPPP) for Construction

 

Owyhee County Subsurface Sewage Disposal Permit

 

State of Idaho, Department of Water Resources Permit No. 57-11790 (Water Well):
12/1/2009

 

 

Schedule 3.1(h)(i)-B   PacifiCorp Acquired Assets - Environmental Law and
Environmental Permit Exceptions

 

None

 

 

                                                                                                       

 

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EXECUTION COPY

 

Schedule 3.1(h)(ii)      PacifiCorp Acquired Assets – Violation of Environmental
Laws and Environmental Permits

 

None

 

Schedule 3.1(h)(iii)     PacifiCorp Acquired Assets - Releases

 

None

 

 

Schedule 3.1(h)(iv)     PacifiCorp Acquired Assets – Storage Tanks, etc.

 

Reactor Oil Containment (open basin)

 

 

 

Schedule 3.1(h)(v)      PacifiCorp Acquired Assets – Assumed Obligations Under
Environmental Laws

 

Clean Water Act – Spill Prevention, Control and Countermeasures (SPCC)

 

 

Schedule 3.1(h)(vi)     PacifiCorp Acquired Assets - Environmental Reports

 

For the 500 kV tap lines in-and-out of the Hemingway Substation and covered by
the Hemingway BLM Right-of-Way Grant:

 

Wildlife Baseline Technical Report – Hemingway Substation Bureau of Land
Management Track: 11/24/2008

 

Vegetation Baseline Technical Report – Hemingway Substation Bureau of Land
Management Track: 11/25/2008

 

 

Schedule 3.1(k)          PacifiCorp Acquired Assets – Intellectual Property

 

None

 

 

Schedule 3.1(l)           Hemingway Substation Facilities Contracts

 

Allied Barton Security

ALS Land Surveying

Anderson & Wood – Fence & Foundations for In-and-Out

Western Construction – Site Work

Energy Erectors – Substation

                                                                                                       

 

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Derek Pearson – Wire Fencing

Power Engineers

Material Testing & Inspection (MTI)

All Treasure Valley Septic Services (Portable Toilets)

Utah Yamas Controls

Schweitzer Engineering (SEL)

American Geotechnics, Inc.

Crane West

Sawtooth Water

United Rental

Global Rental

Inland Crane

Westtowns Disposal inc.

Paul R. Russman

Barclay Crane, LLC

Modern Machinery

Western States Equipment

Napa Auto Parts

General Cable - Conductor

Areva – Power Circuit Breakers

Siemens – Power Transformers, Line Reactors

HD Supply – Arrestors

ABB – Shunt Capacitor Bank

T&B (Meyers) – tubular steel poles

 

 

Schedule 3.2(e)           Exceptions to Governmental Authorizations Obtained by
PacifiCorp

 

Acceptance of the Populus Joint Ownership and Operating Agreement for filing by
the Federal Energy Regulatory Commission under Section 205 of the Federal Power
Act (filing to occur within five (5) days following the Closing Date)

 

Stormwater Pollution Prevention Permit (SWPPP) (to be sought following
completion of construction)

 

 

Schedule 3.2(f)           Idaho Power Acquired Assets - Liabilities

 

None

 

 

Schedule 3.2(g)          Idaho Power Acquired Assets - Title Exceptions

 

None

                                                                                                       

 

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Schedule 3.2(h)(i)-A  Idaho Power Acquired Assets - Environmental Permits

 

Stormwater Pollution Prevention Permit (SWPPP)

 

 

Schedule 3.2(h)(i)-B   Idaho Power Acquired Assets - Environmental Law and
Environmental Permit Exceptions

 

None

 

 

Schedule 3.2(h)(ii)      Idaho Power Acquired Assets – Violation of
Environmental Laws and Environmental Permits

 

None

 

Schedule 3.2(h)(iii)     Idaho Power Acquired Assets - Releases

 

None

 

 

Schedule 3.2(h)(iv)     Idaho Power Acquired Assets – Storage Tanks, etc.

 

Reactor Oil Containment

 

 

Schedule 3.2(h)(v)      Idaho Power Acquired Assets – Assumed Obligations Under
Environmental Laws

 

Clean Water Act – Spill Prevention, Control and Countermeasures (SPCC)

 

 

Schedule 3.2(h)(vi)     Idaho Power Acquired Assets - Environmental Reports

 

Threatened and Endangered Species Assessment Report for the Populus 345
Substation, Bannock County, Idaho (September, 2008)

 

                                                                                                       

 

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Schedule 3.2(k)          Idaho Power Acquired Assets – Intellectual Property

 

None

 

Schedule 3.2(l)           Populus Substation Facilities Contracts

 

Populus Terminal 345 kV Transmission Line Project, Engineering, Procurement and
Construction Contract with Populus Terminal Transmission Partners, dated
September 30, 2008

 

General Electric – Series and shunt capacitors

 

Areva – shunt reactors

 

 

Schedule 4.2(a)          Idaho Power Required Regulatory Approvals Initiated by
Idaho Power prior to the Effective Date

 

None

 

 

Schedule 4.2(b)          PacifiCorp Required Regulatory Approvals Initiated by
PacifiCorp prior to the Effective Date

 

None