Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - U.S. Geothermal Inc. - Exhibit 10.23

 EMPLOYMENT AGREEMENT 

  
    
      
          THIS AGREEMENT made as of the 1st day of November 2004 

      

    

  

BETWEEN: 

  
    
      
          US Geothermal Inc., a body corporate having
          an office at Suite B 1509 Tyrell Lane Boise, Idaho 83706

          (the "Company") 

      

    

  

AND: 

  
    
      
          Douglas Glaspey of 1509 Tyrell Lane, Suite
          B, Boise, Idaho 83706

          (the "Employee") 

      

    

  

WHEREAS: 

 (A)                                   
  the Company is in the business of developing its Raft River geothermal property;

 (B)                                   
  the Company wishes to engage the Employee as Chief Operating Officer; and

 (C)                                   
  the parties hereto wish to enter into this Agreement for the purpose of
  fixing the compensation and terms applicable to the employment of the Employee
  during the period hereinafter set out. 

                                          
  NOW THEREFORE THIS AGREEMENT WITNESSES that the parties hereto, in
  consideration of the respective covenants and agreements on the part of each
  of them herein contained, do hereby covenant and agree as follows: 

 1.                                    
  Employment 

                                         
  The Company hereby engages the Employee as Chief Operating Officer of the
  Company, and the Employee hereby accepts such employment, upon the terms and
  conditions hereinafter set out. 

 2.                                    
  Term 

                                         
  This Agreement will be effective from November 1, 2004 and will remain in
  full force and effect for 2 years or until terminated as hereinafter provided.

 3.                                    
  Responsibility 

                                         
  The Employee will devote one hundred percent of his working time to his
  Employment hereunder, and while engaged in his employment will have the authority
  and duty 

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 to perform and carry out such duties and responsibilities
  as are customarily carried out by persons holding similar positions in other
  geothermal companies comparable in size to the Company and such additional and
  related duties as may from time to time be assigned, delegated, limited or determined
  by the President.

 4.                                    
  Other Business Activities 

	 	 (a)      	 It is agreed that the Employee's employment hereunder
        shall constitute one hundred percent of his working time which shall be
        devoted exclusively for the benefit of the Company, and therefore, the
        Employee may not engage in any other business activities, that would interfere
        with, or impede, in any significant manner the performance of his duties
        as Chief Operating Officer of the Company. 

 5.                                    
  Compensation 

                                         
  In consideration of the performance by the Employee of his responsibilities
  and duties as Chief Operating Officer hereunder: 

	 	 (a)      	 the Company will pay the Employee the sum of US$90,000
        per annum, payable in monthly installments. The Employee may elect to
        have any compensation payable hereunder paid into any jurisdiction of
        his choice, but the Company may decline to pay such compensation to the
        Employee at the place specified if the Company determines that such payment
        in such jurisdiction would violate the laws of the jurisdiction of the
        place of payment specified by the Employee or the laws of any other country
        or if the Company otherwise determines that payment to the Employee or
        for his account in such place would be prejudicial to the Company; 

	 	 	 
	 	 (b)      	 the Company will grant the Employee incentive stock
        options in such amount and on such conditions as the Board of Directors
        of the Company may determine from time to time; and 

	 	 	 
	 	 (c)      	 the Company will provide the Employee and his immediate
        family (consisting of spouse and children) with medical, dental and related
        coverages as are or may become available to the other employees of the
        Company. 

 6.                                    
  Expenses 

                                         
  The Company will reimburse the Employee for any and all reasonable and documented
  expenses actually and necessarily incurred by the Employee in connection with
  the performance of his duties under this Agreement. The Employee will furnish
  the Company with an itemized account of his expenses in such form or forms as
  may reasonably be required by the Company and at such times or intervals as
  may be required by the Company. 

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 7.                                    
  Vacation 

                                         
  The Employee will be entitled to a paid vacation of three weeks within each
  12 month period under the terms of this Agreement, to be calculated from the
  date of commencement of employment set forth in Section 2 herein. This vacation
  must be taken on dates which do not adversely compromise the Employee’s
  performance of his duties under this Agreement. 

 8.                                    
  Termination 

                                         
  This Agreement and the Employee's employment may be terminated by the Company
  summarily and without notice, payment in lieu of notice, severance payments,
  benefits, damages or any sums whatsoever, on the occurrence of any one or more
  of the following events: 

	 	 (a)      	 the Employee’s failure to carry out his duties
        hereunder in a competent and professional manner; 

	 
	 	 (b)      	 the Employee’s appropriation of corporate
        opportunities for the Employee’s direct or indirect benefit or his
        failure to disclose any material conflict of interest; 

	 
	 	 (c)      	 the Employee’s plea of guilty to, or conviction
        of, an indictable offence once all appeals (if any) have been completed
        without such conviction having been reversed; 

	 
	 	 (d)      	 the existence of cause for termination of the Employee
        at common law including but not limited to cause related to fraud, dishonesty,
        illegality, breach of statute or regulation, or gross incompetence; 

	 
	 	 (e)      	 failure on the part of the Employee to disclose
        material facts concerning his business interests or employment outside
        of his employment by the Company, provided such facts relate to the Employee’s
        duties hereunder; 

	 
	 	 (f)      	 refusal on the part of the Employee to follow the
        reasonable and lawful directions of the Company; 

	 
	 	 (g)      	 breach of fiduciary duty to the Company on the part
        of the Employee; 

	 
	 	 (h)      	 material breach of this Agreement or gross negligence
        on the part of the Employee in carrying out his duties under this Agreement;
        or 

	 
	 	 (i)      	 a declaration of bankruptcy on the part of the Employee
        by a court of competent jurisdiction. 

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 8.1                                
   In the event of the early termination of the Agreement for any reason set
  out in Section 8 above, the Employee shall only be entitled to such compensation
  as would otherwise be payable to the Employee hereunder up to and including
  such date of termination, as the case may be.

 8.2                                 
  This Agreement and the Employee's employment may be terminated on notice
  by the Company to the Employee for any reason other than for the reasons set
  out in Section 8 above of this Agreement upon one month notice to the Employee.
  In such event, the Employee will be entitled to payment of salary and expenses
  until the date one month after which notice was given. 

 8.3                                 
  This Agreement and the Employee's employment may be terminated on notice
  by the Employee to the Company for any reason upon one month notice to the Company.
  In such event, the Employee will be entitled to payment of salary and expenses
  until the date one month after which notice was given. 

 9.                                    
  Confidential Information 

                                         
  The Employee agrees to keep the affairs and Confidential Information (as
  defined below) of the Company strictly confidential and shall not disclose the
  same to any person, company or firm, directly or indirectly, during or after
  his employment by the Company except as authorized in writing by the Board.
  "Confidential Information" includes, without limitation, the following types
  of information or material, both existing and contemplated, regarding the Company
  or its parent, affiliated or subsidiary companies: corporate information, including
  contractual licensing arrangements, plans, strategies, tactics, policies, resolutions,
  patent, trademark and trade name applications; any litigation or negotiations;
  information concerning suppliers; marketing information, including sales, investment
  and product plans, customer lists, strategies, methods, customers, prospects
  and market research data; financial information, including cost and performance
  data, debt arrangements, equity structure, investors and holdings; operational
  and scientific information, including trade secrets; technical information,
  including technical drawings and designs; any information relating to any mineral
  projects in which the Company has an actual or potential interest; and personnel
  information, including personnel lists, resumes, personnel data, organizational
  structure and performance evaluations. The Employee agrees not to use such information,
  directly or indirectly, for his own interests, or any interests other than those
  of the Company, whether or not those interests conflict with the interests of
  the Company during or after his employment by the Company. The Employee expressly
  acknowledges and agrees that all information relating to the Company, whether
  financial, technical or otherwise shall, upon execution of this Agreement and
  thereafter, as the case may be, be the sole property of the Company, whether
  arising before or after the execution of this Agreement. The Employee expressly
  agrees not to divulge any of the foregoing information to any person, partnership,
  Company or other legal entity or to assist in the disclosure or divulging of
  any such information, directly or indirectly, except as required by law or as
  otherwise 

 - 5 - 

 authorized in writing by the Board. The provisions of this
  Section 9 and Section 9.1 below shall survive the termination of this Agreement.

 9.1                                 
  The Employee agrees that all documents of any nature pertaining to the activities
  of the Company or its related corporate entities, including Confidential Information,
  in the Employee's possession now or at any time during the Employee's period
  of employment, are and shall be the property of the Company and that all such
  documents and copies of them shall be surrendered to the Company when requested
  by the Company.

 10.                                  
  Non-Competition 

                                         
  During the Non-Competition Period (as defined below), the Employee shall
  not, either individually or in partnership or jointly or in conjunction with
  any other person, entity or organization, as principal, agent, consultant, lender,
  contractor, employer, employee, investor, shareholder or in any other manner,
  directly or indirectly, advise, manage, carry on, establish, control, engage
  in, invest in, offer financial assistance or services to, or permit the Employee's
  name or any part thereof to be used by, any business in geothermal resources
  that competes with the business of the Company, its parent, affiliated or subsidiary
  companies, or any business in which the Company, its parent, affiliated or subsidiary
  companies is engaged. For purposes of this Agreement, “Non-Competition
  Period” means a period ending twelve (12) months after the end of the
  termination of this Agreement. 

 11.                                  
  Acknowledgement 

                                         
  The Employee acknowledges that damages would be an insufficient remedy for
  a breach by him of this Agreement and agrees that the Company may apply for
  and obtain any relief available to it in a court of law or equity, including
  injunctive relief, to restrain breach or threat of breach of this Agreement
  by the Employee or to enforce the covenants contained therein and, in particular,
  the covenants contained in Sections 9 and 10, in addition to rights the Company
  may have to damages arising from said breach or threat of breach. 

 12.                                  
  Representations and Warranties 

                                         
  The Employee represents and warrants to the Company that the execution and
  performance of this Agreement will not result in or constitute a default, breach,
  or violation, or an event that, with notice or lapse of time or both, would
  be a default, breach, or violation, of any understanding, agreement or commitment,
  written or oral, express or implied, to which the Employee is currently a party
  or by which the Employee or Employee's property is currently bound. 

 13.                                  
  Governing Law 

                                         
  This Agreement shall be construed and enforced in accordance with the laws
  of the State of Idaho, USA. 

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 14.                                  
  Entire Agreement 

                                         
  This Agreement constitutes the entire agreement between the parties hereto
  with respect to the relationship between the Company and the Employee and supersedes
  all prior arrangements and agreements, whether oral or in writing between the
  parties hereto with respect to the subject matter hereof. 

 15.                                  
  Amendments 

                                         
  No amendment to or variation of the terms of this Agreement will be effective
  or binding upon the parties hereto unless made in writing and signed by both
  of the parties hereto. 

 16.                                   
  Assignment 

                                         
  This Agreement is not assignable by the Employee. This Agreement is assignable
  by the Company to any other company which controls, is controlled by, or is
  under common control with the Company. This Agreement shall enure to the benefit
  of and be binding upon the Company and its successors and permitted assigns
  and the Employee and his heirs, executors and administrators. 

 17.                                   
  Severability 

                                         
  Any provision of this Agreement that is prohibited or unenforceable in any
  jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
  the prohibition or unenforceability and shall be severed from the balance of
  this Agreement, all without affecting the remaining provisions of this Agreement
  or affecting the validity or enforceability of such provision in any other jurisdiction.

 18.                                   
  Headings 

                                         
  The division of this Agreement into Sections and the insertion of headings
  are for convenience or reference only and shall not affect the construction
  or interpretation of this Agreement. 

 19.                                   
  Time of Essence 

                                         
  Time shall be of the essence in all respects of this Agreement. 

 20.                                   
  Independent Legal Advice 

                                         
  The Employee agrees that he has had, or has had the opportunity to obtain,
  independent legal advice in connection with the execution of this Agreement
  and has read this Agreement in its entirety, understands its contents and is
  signing this Agreement freely and voluntarily, without duress or undue influence
  from any party. 

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 21.                                   
  Notice 

                                         
  Any notice required or permitted to be made or given under this Agreement
  to either party shall be in writing and shall be sufficiently given if delivered
  personally, by electronic transmission, or if sent by prepaid registered mail
  to the intended recipient of such notice at their respective addresses set forth
  below or to such other address as may, from time to time, be designated by notice
  given in the manner provided in this Section:

in the case of Company: 

US Geothermal Inc. 

  1509 Tyrell Lane, Suite B 

  Boise, Idaho 83706 

  Attention: Corporate Secretary

 Fax No.: 208 424 1030 

in the case of Employee: 

Douglas Glaspey 

  1509 Tyrell Lane, Suite B 

  Boise, Idaho 83706 

  Fax No.: 208 424 1030 

 21.1                                
  Any notice delivered to the party to whom it is addressed shall be deemed
  to have been given and received on the day it is so delivered or, if such day
  is not a business day, then on the next business day following any such day.
  Any notice mailed shall be deemed to have been given and received on the 10th
  business day following the date of mailing. In the case of facsimile transmission,
  notice is deemed to have been given or served on the party to whom it was sent
  at the time of dispatch if, following transmission, the sender receives a transmission
  confirmation report or, if the sender’s facsimile machine is not equipped
  to issue a transmission confirmation report, the recipient confirms in writing
  that the notice has been received. 

                                          
  IN WITNESS WHEREOF the parties hereto have executed this Agreement
  as of the day and year first above written. 

 US GEOTHERMAL INC. 

	By:	 	 
	 	Authorized Signatory 	 

SIGNED by the Employee in the presence of: 

	 	 	 
	 Witness  	 	 Douglas Glaspey  
	 	 	 
	 	 	 
	 	 	 
	 Printed Name of WitnessFiled by Automated Filing Services Inc. (604) 609-0244 - US Geothermal Inc. - Firm Energy Sales Agreement

 FIRM ENERGY SALES AGREEMENT

  BETWEEN 

  IDAHO POWER COMPANY 

  AND 

  US GEOTHERMAL INC 

  TABLE OF CONTENTS 

	 Article	                               TITLE
	 1	 	 Definitions
	 2	 	 No Reliance on Idaho Power
	 3	 	 Warranties
	 4	 	 Conditions to Acceptance of Energy
	 5	 	 Term and Operation Date
	 6	 	 Purchase and Sale of Net Energy
	 7	 	 Purchase Price and Method of Payment
	 8	 	 Environmental Attributes
	 9	 	 Facility and Interconnection
	 10	 	 Transmission Agreement
	 11	 	 Metering and Telemetry
	 12	 	 Records
	 13	 	 Protection
	 14	 	 Operations
	 15	 	 Reliability Management System
	 16	 	 Indemnification and Insurance
	 17	 	 Force Majeure
	 18	 	 Liability; Dedication
	 19	 	 Several Obligations
	 20	 	 Waiver
	 21	 	 Choice of Laws and Venue
	 22	 	 Disputes and Default
	 23	 	 Governmental Authorization
	 24	 	 Commission Order
	 25	 	 Successors and Assigns
	 26	 	 Modification
	 27	 	 Taxes
	 28	 	 Notices
	 29	 	 Additional Terms and Conditions
	 30	 	 Severability
	 31	 	 Counterparts
	 32	 	 Entire Agreement Signatures
	  	 	 
	  	 	 Appendix A
	  	 	 Appendix B
	  	 	 Appendix C

 FIRM ENERGY SALES AGREEMENT

  (10 aMW or Less) 

RAFT RIVER GEOTHERMAL POWER PLANT 

Project Number: 31765155 

                THIS
  AGREEMENT, entered into on this    29th   
  day of   December    2004 between US GEOTHERMAL INC.
  an Idaho corporation (Seller), and IDAHO POWER COMPANY, an Idaho corporation
  (Idaho Power), hereinafter sometimes referred to collectively as “Parties”
  or individually as “Party.” 

WITNESSETH: 

               WHEREAS,
  Seller will design, construct, own, maintain and operate an electric generation
  facility; and 

               WHEREAS,
  Seller wishes to sell, and Idaho Power is willing to purchase, firm electric
  energy produced by the Seller’s Facility. 

                THEREFORE,
  In consideration of the mutual covenants and agreements hereinafter set forth,
  the Parties agree as follows:

 ARTICLE I: DEFINITIONS 

                 As
  used in this Agreement and the appendices attached hereto, the following terms
  shall have the following meanings: 

	 1.1      	 “Commission” - The Idaho Public
        Utilities Commission. 

	 	 
	 1.2      	 “Contract Year” - The period
        commencing each calendar year on the same calendar date as the Operation
        Date and ending 364 days thereafter. 

	 	 
	 1.3      	 “Designated Dispatch Facility”
        - Idaho Power’s Systems Operations Group, or any subsequent group
        designated by Idaho Power. 

	 	 
	 1.4      	 “Facility” - That electric generation
        facility described in Appendix B of this Agreement. 

	 	 
	 1.5      	 “Geothermal Production Well Contribution
        Rating” – Each individual geothermal well contribution,
        defined in MWs, to the generator rating of the generator directly attached
        to the 

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	 	 specific geothermal well. The sum of the individual
        Geothermal Production Well Contribution Ratings directly providing motive
        force for individual generation units must equal the generator rating
        of the individual generation unit(s) as specified in Appendix B. The Geothermal
        Production Well Contribution Ratings will be as specified in Appendix
        B or as may be adjusted in accordance with paragraph 14.4 of this Agreement.
      

	 
	 1.6      	 “Inadvertent Energy” –
        Electric energy Seller does not intend to generate. Inadvertent energy
        is more particularly described in paragraph 7.3 of this Agreement. 

	 
	 1.7      	 "Interconnection Facilities" - All facilities
        required to be installed to interconnect and deliver energy from the Facility
        to the Transmitting Entity’s system including, but not limited to,
        connection, switching, metering, relaying, communications and safety equipment.
      

	 
	 1.8      	 “Initial Capacity Determination”
        – The process by which Idaho Power confirms that under normal
        or average design conditions the Facility will generate at no more than
        10 average MW per month and is therefore eligible to be paid the published
        rates in accordance with Commission Order No. 29214. 

	 
	 1.9      	 “Losses” – The loss of
        electrical energy expressed in kilowatt hours (kWh) occurring as a result
        of the transformation and transmission of energy between the point where
        the Facility’s energy is actually delivered to the Transmitting
        Entity (measured by either the Idaho Power or the Transmitting Entity’s
        Metering Equipment) and the Point of Delivery on the Idaho Power electrical
        system. The loss calculation formula will be as specified in Appendix
        B of this Agreement. 

	 
	 1.10      	 “Market Energy Cost” –
        Eighty-five percent (85%) of the weighted average of the daily on-peak
        and off-peak Dow Jones Mid-Columbia Index (Dow Jones Mid-C Index) prices
        for non-firm energy. If the Dow Jones Mid-Columbia Index price is discontinued
        by the reporting agency, both Parties will mutually agree upon a replacement
        index, which is similar to the Dow Jones Mid- Columbia Index. The selected
        replacement index will be consistent with other similar agreements and
        a commonly used index by the electrical industry. 

	 
	 1.11      	 “Material Breach” – A Default
        (paragraph 22.2.1) subject to paragraph 22.2.2. 

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	 1.12      	 “Maximum Capacity Amount” –
        The maximum capacity (MW) of the Facility will be as specified in Appendix
        B of this Agreement. 

	 
	 1.13      	 “Metering Equipment" - All equipment
        specified in Schedule 72, this Agreement and any additional equipment
        specified in Appendix B required to measure, record or telemeter power
        flows between the Seller's Facility and Idaho Power's electrical system.
      

	 
	 1.14      	 “Net Energy” – All of the
        electric energy produced by the Facility, less Station Use, less Losses,
        expressed in kilowatt hours (kWh), which the Transmitting Entity delivers
        to Idaho Power at the Point of Delivery for the full term of the Agreement.
        Net Energy does not include Inadvertent Energy. 

	 
	 1.15      	 “Operation Date” – The
        day commencing at 00:00:01 (H:M:S) hours, Mountain Time, following the
        day that all requirements of paragraph 5.2 have been completed. 

	 
	 1.16      	 “Point of Delivery” – The
        location specified in Appendix B, where the Transmitting Entity delivers
        the Facility’s Net Energy and Inadvertent Energy to Idaho Power.
      

	 
	 1.17      	 “Prudent Electrical Practices”
        – Those practices, methods and equipment that are commonly and ordinarily
        used in electrical engineering and operations to operate electric equipment
        lawfully, safely, dependably, efficiently and economically. 

	 
	 1.18      	 “Scheduled Operation Date” –
        The date specified in Appendix B when Seller anticipates achieving the
        Operation Date. 

	 
	 1.19      	 “Schedule 72” – Idaho Power’s
        Tariff No 101, Schedule 72 or its successor schedules as approved by the
        Commission. 

	 
	 1.20      	 “Season” – The three periods
        identified in paragraph 6.2.1 of this Agreement. 

	 
	 1.21      	 “Station Use” – Electric
        energy that is used to operate equipment that is auxiliary or otherwise
        related to the production of electricity by the Facility. 

	 
	 1.22      	 “Surplus Energy” – (1)
        Net Energy produced by the Seller’s Facility, scheduled and delivered
        by the Transmitting Entity and accepted by Idaho Power during the month
        which exceeds 110% of the monthly Net Energy Amount for the corresponding
        month specified in paragraph 6.2. or (2) If the Net Energy produced by
        the Seller’s Facility, scheduled and delivered by the Transmitting
      

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	 	 Entity and accepted by Idaho Power during the month
        is less than 90% of the monthly Net Energy Amount for the corresponding
        month specified in paragraph 6.2, then all Net Energy scheduled and delivered
        by the Transmitting Entity to Idaho Power on the Seller’s behalf
        for that given month or (3) All Net Energy produced by the Seller’s
        Facility, scheduled and delivered by the Transmitting Entity and accepted
        by Idaho Power prior to the Operation Date. 

	 
	 1.23      	 “Total Cost of the Facility”
        - The total cost of structures, equipment and appurtenances. 

	 
	 1.24      	 “Transmitting Entity” - The signatory(s)
        (other than the Seller) to the Transmission Agreement referred to in paragraph
        10.1 and its successors and assigns. 

 ARTICLE II: NO RELIANCE ON IDAHO POWER 

	 2.1      	 Seller Independent Investigation - Seller
        warrants and represents to Idaho Power that in entering into this Agreement
        and the undertaking by Seller of the obligations set forth herein, Seller
        has investigated and determined that it is capable of performing hereunder
        and has not relied upon the advice, experience or expertise of Idaho Power
        in connection with the transactions contemplated by this Agreement. 

	 	 
	 2.2      	 Seller Independent Experts - All professionals
        or experts including, but not limited to, engineers, attorneys or accountants,
        that Seller may have consulted or relied on in undertaking the transactions
        contemplated by this Agreement have been solely those of Seller. 

 ARTICLE III: WARRANTIES 

	 3.1      	 No Warranty by Idaho Power - Any review,
        acceptance or failure to review Seller’s design, specifications,
        equipment or facilities shall not be an endorsement or a confirmation
        by Idaho Power and Idaho Power makes no warranties, expressed or implied,
        regarding any aspect of Seller’s design, specifications, equipment
        or facilities, including, but not limited to, safety, durability, reliability,
        strength, capacity, adequacy or economic feasibility. 

	 	 
	 3.2      	 Qualifying Facility Status - Seller warrants
        that the Facility is a “Qualifying Facility,” as that term
        is used and defined in 18 CFR §292.207. After initial qualification,
        Seller will take such steps as 

 - 4 - 

 

	 	may be required to maintain the Facility’s
        Qualifying Facility status during the term of this Agreement and Seller’s
        failure to maintain Qualifying Facility status will be a Material Breach
        of this Agreement. Idaho Power reserves the right to review the Seller’s
        Qualifying Facility status and associated support and compliance documents
        at anytime during the term of this Agreement. 

ARTICLE IV: CONDITIONS TO ACCEPTANCE
  OF ENERGY 

	 4.1      	 Prior to the Operation Date and as a condition
        of Idaho Power’s acceptance of deliveries of energy from the Seller,
        Seller shall: 

	 
	 	 4.1.1   
          
	 Submit proof to Idaho Power that all licenses, permits
        or approvals necessary for Seller’s operations have been obtained
        from applicable federal, state or local authorities, including, but not
        limited to, evidence of compliance with Subpart B, 18 CFR 292.207. 

	 
	 	 4.1.2      
	 Opinion of Counsel - Submit to Idaho Power
        an Opinion Letter signed by an attorney admitted to practice and in good
        standing in the State of Idaho providing an opinion that Seller’s
        licenses, permits and approvals as set forth in paragraph 4.1.1 above
        are legally and validly issued, are held in the name of the Seller and,
        based on a reasonable independent review, counsel is of the opinion that
        Seller is in substantial compliance with said permits as of the date of
        the Opinion Letter. The Opinion Letter will be in a form acceptable to
        Idaho Power and will acknowledge that the attorney rendering the opinion
        understands that Idaho Power is relying on said opinion. Idaho Power’s
        acceptance of the form will not be unreasonably withheld. The Opinion
        Letter will be governed by and shall be interpreted in accordance with
        the legal opinion accord of the American Bar Association Section of Business
        Law (1991). 

	 
	 	 4.1.3      
	 Initial Capacity Determination - Submit to
        Idaho Power a certificate from a Registered Professional Engineer licensed
        and in good standing in the State of Idaho certifying that the Facility’s
        design and operating protocols will limit generation at the Facility to
        no more than 10 average MW in any given month. 

	 
	 	 4.1.4      
	 Engineer’s Certifications - Submit
        an executed Engineer's Certification of Design & 

 - 5 - 

 

	 	 	 Construction Adequacy and an Engineer's
        Certification of Operations and Maintenance (O&M) Policy as described
        in Commission Order No. 21690. These certificates will be in the form
        specified in Appendix C but may be modified to the extent necessary to
        recognize the different engineering disciplines providing the certificates.
      

	 
	 	 4.1.5      	 Insurance - Submit written proof
        to Idaho Power of all insurance required in Article XVI. 

	 
	 	 4.1.6      	 Transmission Agreement - Provide
        Idaho Power with a copy of the Transmission Agreement executed by the
        Seller and the Transmitting Entity in a form acceptable to Idaho Power.
        Idaho Power’s acceptance will not be unreasonably withheld. 

	 
	 	 4.1.7      	 Written Acceptance – Request
        and obtain written confirmation from Idaho Power that all conditions to
        acceptance of energy have been fulfilled. Such written confirmation shall
        be provided within a commercially reasonable time following the Seller’s
        request and will not be unreasonably withheld by Idaho Power. 

	 
	 	 4.1.8      	 Idaho Power Electrical System Study
        – Seller and Transmitting Entity will request, in writing, a
        specific Point of Delivery where the Facility’s Net Energy and Inadvertent
        Energy will be delivered to Idaho Power. This request will include the
        Maximum Capacity Amount (MW) as specified in Appendix B-4. Upon receipt
        of this request, at Seller’s expense, Idaho Power will complete
        an electrical system study to determine Idaho Power’s ability to
        receive the Maximum Capacity Amount at the requested Point of Delivery.
        This study will include a study of the Idaho Power electrical system at
        this Point of Delivery and estimation of any additional Seller costs associated
        with completing this request as specified in Appendix B. 

	 
	 	 	 4.1.8.1
	 If said study shows that Idaho Power will be unable
        to receive the Maximum Capacity Amount at the requested Point of Delivery,
        the Seller and Transmitting Entity may request a different Point of Delivery
        or revise the Maximum Capacity Amount and a similar study, at the Seller’s
        expense, will be conducted. 

	 
	 	 	 4.1.8.2
	 If the Seller and Transmitting Entity request permission
        to deliver the 

 - 6 - 

 

	 	 	 	 Maximum Capacity Amount at a Point of Delivery that
        Idaho Power has identified as being unable to receive the Maximum Capacity
        Amount, at Seller’s request and expense, Idaho Power will conduct
        a study to determine the necessary upgrades and/or modifications required
        to enable receipt of the Maximum Capacity Amount at the requested Point
        of Delivery. 

	 
	 	 	 4.1.8.3	 Seller will be responsible for all customary and
        reasonable expenses associated with all Idaho Power studies, upgrades
        and/or modifications required to enable delivery of the Maximum Capacity
        Amount at the requested Point of Delivery. An initial deposit will be
        calculated based upon the estimated cost of each individual study, upgrade
        or modification and will be required to be paid by the Seller prior to
        Idaho Power conducting any work associated with the Seller’s request.
        Upon completion of any and all studies, upgrades and/or modifications
        required to accommodate the Seller’s request, Idaho Power will reconcile
        the actual expenses with the previously paid deposit and the appropriate
        refund or additional billing will be processed. 

 ARTICLE V: TERM AND OPERATION DATE 

	 5.1      	 Term - Subject to the provisions
        of paragraph 5.2 below, this Agreement shall become effective on the date
        first written and shall continue in full force and effect for a period
        of twenty (20) Contract Years from the Operation Date. 

	 
	 5.2      	 Operation Date - The Operation
        Date may occur only after the Facility has achieved all of the following:
      

	 
	 	 a)      
	 Completed all Conditions to Acceptance of Energy
        as specified in Article IV. 

	 
	 	 b)     
      
	 Commission approval of this Agreement has been received.
      

	 
	 	 c)      
	 Seller has demonstrated to Idaho Power's satisfaction
        that the Facility is complete and able to provide energy in a consistent,
        reliable and safe manner and has requested an 

 - 7 - 

 

	 	 Operation Date in written form. 

	 
	 	 d)     
      
	 Seller has received written confirmation from Idaho
        Power of the Operation Date. This confirmation will not be unreasonably
        withheld by Idaho Power. 

	 
	 5.3      	 Seller’s failure to achieve the
        Operation Date within ten (10) months of the Scheduled Operation Date
        will be an event of default. 

 ARTICLE VI: PURCHASE AND SALE OF NET ENERGY 

	 6.1      	 Delivery and Acceptance of Net Energy
        - Except when either Party's performance is excused as provided herein,
        Idaho Power will purchase and Seller will sell all of the Net Energy produced
        by the Facility and delivered by the Transmitting Entity to the Point
        of Delivery. All Inadvertent Energy produced by the Facility will also
        be delivered by the Transmitting Entity to Idaho Power at the Point of
        Delivery. At no time will the total amount of Net Energy and/or Inadvertent
        Energy produced by the Facility and delivered by the Transmitting Entity
        to the Point of Delivery exceed the Maximum Capacity Amount. 

	 
	 6.2      	 Net Energy Amounts - Seller intends
        to produce and Transmitting Entity shall deliver Net Energy in the following
        monthly amounts: 

	 	 	 
	 	6.2.1
	 Initial Year Monthly Net Energy Amounts:
      

	  	 	 Month	 kWh
	  	 	 	 
	  	 	 March	 7,440,000
	 Season 1	 	 April	 7,200,000
	  	 	 May	 7,440,000
	  	 	 	 
	  	 	 July	 7,440,000
	  	 	 August	 7,440,000
	 Season 2	 	 November	 7,200,000
	  	 	 December	 7,440,000
	  	 	 	 
	  	 	 June	 7,200,000
	  	 	 September	 7,200,000
	 Season 3	 	 October	 7,440,000
	  	 	 January	 7,440,000
	  	 	 February	 6,720,000

 - 8 - 

 

	 	 6.2.2      	 Ongoing Monthly Net Energy Amounts
        - Seller shall initially provide Idaho Power with one year of monthly
        generation estimates (Initial Year Monthly Net Energy Amounts) and beginning
        at the end of month nine and every three months thereafter provide Idaho
        Power with an additional three months of forward generation estimates.
        This information will be provided to Idaho Power by written notice in
        accordance with paragraph 28.1, no later than 5pm of the 5th day
        following the end of the previous month. If the Seller does not provide
        the Ongoing Monthly Net Energy amounts in a timely manner, Idaho Power
        will use the most recent 3 months of the Initial Year Monthly Net Energy
        Amounts specified in paragraph 6.2.1 for the next 3 months of monthly
        Net Energy amounts. 

	 
	 	 6.2.3      	 Seller’s Adjustment of Net Energy
        Amount – 

	 
	 	 	 6.2.3.1
	 No later than the Operation Date, by written notice
        given to Idaho Power in accordance with paragraph 28.1, the Seller may
        revise all of the previously provided Initial Year Monthly Net Energy
        Amounts. 

	 
	 	 	 6.2.3.2
	 Beginning with the end of the 3rd month
        after the Operation Date and at the end of every third month thereafter:
        (1) the Seller may not revise the immediate next three months of
        previously provided Net Energy Amounts, (2) but by written notice given
        to Idaho Power in accordance with paragraph 28.1, no later than 5pm of
        the 5th day following the end of the previous month, the Seller
        may revise all other previously provided Net Energy Amounts. Failure to
        provide timely written notice of changed amounts will be deemed to be
        an election of no change. 

	 
	 	 6.2.4      	 Idaho Power Adjustment of Net Energy
        Amount – If Idaho Power is excused from accepting the Seller’s
        Net Energy as specified in paragraph 14.2.1 or if the Seller declares
        a Suspension of Energy Deliveries as specified in paragraph 14.3.1 and
        the Seller’s declared Suspension of Energy Deliveries is accepted
        by Idaho Power, the Net Energy Amount as specified in paragraph 6.2 for
        the specific month in which the reduction or suspension under paragraph
        14.2.1 or 14.3.1 occurs will be reduced in accordance with 

 - 9 - 

 

	 	 	the following:

	 	 Where:  	  	  	  
	 	  	 	 	 
	 	  NEA  	 =  	 Current Month’s Net Energy Amount
      (Paragraph 6.2)  
	 	  	 	 	 
	 	  SGU  	 =  	 a.)  	 If Idaho Power is excused
        from accepting the Seller’s Net Energy as specified in paragraph
        14.2.1 this value will be equal to the percentage of curtailment as specified
        by Idaho Power multiplied by the TGU as defined below. 

	 	  	 	 	 
	 	  	  	 b.)  	 If the Seller declares a
        Suspension of Energy Deliveries as specified in paragraph 14.3.1 for an
        entire generation unit(s) this value will be the sum of the individual
        generation units size ratings as specified in Appendix B that are impacted
        by the circumstances causing the Seller to declare a Suspension of Energy
        Deliveries.

	 	  	 	 	 
	 	  	  	 c.)  	 If the Seller declares a
        Suspension of Energy Deliveries as specified in paragraph 14.3.1 due to
        a forced outage of an individual production well(s), this value will be
        the sum of the individual production well(s) Geothermal Production Well
        Contribution Rating(s) as specified in Appendix B that are impacted by
        the circumstances causing the Seller to declare a Suspension of Energy
        Deliveries.

	 	  	 	 	 
	 	  	 	 	 
	 	  TGU  	 =  	 Sum of all of
        the individual generator ratings of the generation units at this Facility
        as specified in Appendix B of this agreement. 

	 	  	 	 	 
	 	  RSH  	 =  	 Actual hours
        the Facility’s Net Energy deliveries were either  reduced or
        suspended under paragraph 14.2.1 or 14.3.1  

	 	  	 	 	 
	 	  TH  	 =  	 Actual total
        hours in the current month  

	 	 	Resulting formula being: 

	 	 	Adjusted  

      Net Energy  

      Amount  	 =  	 NEA  	 –  	  ( 	 ( 
      	SGU 

      TGU  	 X  	 NEA  	 ) 
      	 X  	 ( 
      	RSH  

      TH  	 ) 
      	 )  

	 	 This Adjusted Net Energy Amount will be used in
        applicable Surplus Energy calculations for only the specific month in
        which Idaho Power was excused from accepting the Seller’s Net Energy
        or the Seller declared a Suspension of Energy. 

	 	 
	 6.3      	 Unless excused by an event of Force Majeure, Seller’s
        failure to deliver Net Energy in any Contract Year in an amount equal
        to at least ten percent (10%) of the sum of the Initial Year Net 

 - 10 - 

 

	 	Energy Amounts as specified in paragraph 6.2 shall constitute an event
      of default. 

 ARTICLE VII: PURCHASE PRICE AND METHOD
  OF PAYMENT 

	 7.1      	 Net Energy Purchase Price – For all
        Net Energy, Idaho Power will pay the non-levelized energy price in accordance
        with Commission Order 29646 with seasonalization factors applied: 

	 	  	 Season 1 - (73.50 %)  	 Season 2 - (120.00 %)  	 Season 3 - (100.00 %)  
	 	 Year  	 Mills/kWh  	 Mills/kWh  	 Mills/kWh  
	 	 2004  	 36.17  	 59.05  	 49.21  
	 	 2005  	 37.00  	 60.41  	 50.34  
	 	 2006  	 37.85  	 61.80  	 51.50  
	 	 2007  	 38.73  	 63.23  	 52.69  
	 	 2008  	 39.62  	 64.68  	 53.90  
	 	 2009  	 40.53  	 66.17  	 55.14  
	 	 2010  	 41.46  	 67.69  	 56.41  
	 	 2011  	 42.42  	 69.25  	 57.71  
	 	 2012  	 43.39  	 70.85  	 59.04  
	 	 2013  	 44.39  	 72.48  	 60.40  
	 	 2014  	 45.42  	 74.16  	 61.80  
	 	 2015  	 46.47  	 75.86  	 63.22  
	 	 2016  	 47.54  	 77.62  	 64.68  
	 	 2017  	 48.63  	 79.40  	 66.17  
	 	 2018  	 49.76  	 81.24  	 67.70  
	 	 2019  	 50.91  	 83.11  	 69.26  
	 	 2020  	 52.07  	 85.02  	 70.85  
	 	 2021  	 53.28  	 86.99  	 72.49  
	 	 2022  	 54.51  	 88.99  	 74.16  
	 	 2023  	 55.76  	 91.04  	 75.87  
	 	 2024  	 57.05  	 93.14  	 77.62  
	 	 2025  	 58.37  	 95.29  	 79.41  
	 	 2026  	 59.72  	 97.50  	 81.25  

	 7.2      	 Surplus Energy Price - For all
        Surplus Energy, Idaho Power shall pay to the Seller the current month’s
        Market Energy Cost or the Net Energy Purchase Price specified in paragraph
        7.1, whichever is lower. 

	 
	 7.3      	 Inadvertent Energy – 

	 
	 	 7.3.1   
          
	 Inadvertent Energy is electric energy produced by
        the Facility, expressed in kWh, which the Transmitting Entity delivers
        to Idaho Power at the Point of Delivery that exceeds 10,000 KW multiplied
        by the hours in the specific month in which the energy was 

 - 11 - 

 

	 	 	 delivered. (For example January contains 744 hours.
        744 times 10,000 KW = 7,440,000 kWh,. Energy delivered in January in excess
        of 7,440, 000 kWh in this example would be Inadvertent Energy. 

	 
	 	 7.3.2   
          
	 Although Seller intends to design and operate the
        Facility to generate no more than 10 average MW and therefore does not
        intend to generate Inadvertent Energy, Idaho Power will accept Inadvertent
        Energy that does not exceed the Maximum Capacity Amount but will not purchase
        or pay for Inadvertent Energy 

	 
	 7.4      	 Payment Due Date – Energy
        payments to the Seller will be disbursed within 30 days of the date which
        Idaho Power receives and accepts the documentation of the monthly Net
        Energy and Inadvertent Energy actually produced by the Seller’s
        Facility and delivered to Idaho Power by the Transmitting Entity as specified
        in Appendix A. 

	 
	 7.5      	 Continuing Jurisdiction of the Commission
        – This Agreement is a special contract and, as such, the rates,
        terms and conditions contained in this Agreement will be construed in
        accordance with Idaho Power Company v. Idaho Public Utilities Commission
        and Afton Energy, Inc., 107 Idaho 781, 693 P.2d 427 (1984); Idaho
        Power Company v. Idaho Public Utilities Commission, 107 Idaho 1122,
        695 P.2d 1 261 (1985); Afton Energy, Inc, v. Idaho Power Company,
        111 Idaho 925, 729P.2d 400 (1986); Section 210 of the Public Utilities
        Regulatory Policies Act of 1978 and 18 CFR §292.303-308. 

 ARTICLE VIII: ENVIRONMENTAL ATTRIBUTES 

	 8.1      	 Idaho Power waives any claim to ownership of Environmental
        Attributes. Environmental Attributes include, but are not limited to,
        Green Tags, Green Certificates, Renewable Energy Credits (RECs) and Tradable
        Renewable Certificates (TRCs) directly associated with the production
        of energy from the Seller’s Facility. 

 - 12 - 

 ARTICLE IX: FACILITY AND INTERCONNECTION 

	 9.1      	 Design of Facility - Seller will design,
        construct, install, own, operate and maintain the Facility and any Seller-owned
        Interconnection Facilities so as to allow safe and reliable generation
        and delivery of Net Energy and Inadvertent Energy to the Transmitting
        Entity for the full term of the Agreement. 

	 
	 9.2      	 Interconnection Facilities - Seller will
        construct, install, own and maintain all Interconnection Facilities other
        than those owned, installed or maintained by the Transmitting Entity.
        Seller will pay all costs of interconnecting with the Transmitting Entity
        and transmitting Net Energy and Inadvertent Energy to Idaho Power. 

 ARTICLE X: TRANSMISSION AGREEMENT 

	 10.1      	 Transmission Agreement - The Seller will
        arrange and pay for the delivery of Net Energy and Inadvertent Energy
        over the facilities of the Transmitting Entities (the Bonneville Power
        Administration (“BPA”) and the Raft River Rural Electric Cooperative
        (“Raft River”)) to the Point of Delivery. The delivery of
        Net Energy and Inadvertent Energy from the Facility to the Idaho Power
        Point of Delivery shall be in accordance with the terms and conditions
        of a Transmission Agreement between the Seller and the Transmitting Entities.
      

	 
	 10.2      	 Acceptance of Transmission Agreement - This
        Agreement is expressly conditioned and contingent upon Idaho Power’s
        acceptance of the Transmission Agreement. Such acceptance will not be
        unreasonably withheld. Idaho Power will be identified within the Transmission
        Agreement as an intended third party beneficiary of the Transmission Agreement
        and a material default by Seller under the Transmission Agreement will
        be a material default under this Agreement. 

	 
	 10.3      	 Losses - Idaho Power will only purchase the
        Net Energy that is delivered by the Transmitting Entity to Idaho Power
        at the Point of Delivery. Idaho Power will only accept the Inadvertent
        Energy delivered by the Transmitting Entity to Idaho Power at the Point
        of Delivery. Losses will be calculated as provided in Appendix B of this
        Agreement. 

 - 13 - 

 ARTICLE XI: METERING AND TELEMETRY 

	 11.1      	 Metering and Telemetry - Idaho Power shall,
        for the account of Seller, provide, install, and maintain Metering Equipment
        as required to determine the amount of Net Energy and Inadvertent Energy
        delivered to Idaho Power by the Transmitting Entity at the Point of Delivery.
        The metering will be installed at the location as specified in Appendix
        B of this Agreement. If required by Idaho Power, metering will also include
        measurement of kilovar-hours in a manner agreed to by both Parties. All
        customary and reasonable Metering Equipment and installation costs shall
        be borne by Seller, including costs incurred by Idaho Power for inspecting
        and testing such equipment at reasonable intervals at Idaho Power's actual
        cost of providing this Metering Equipment and services. All meters used
        to determine the billing hereunder shall be sealed and the seals shall
        be broken only by Idaho Power when the meters are to be inspected, tested
        or adjusted. 

	 
	 11.2      	 Meter Inspection - Idaho Power shall inspect
        and test all meters upon their installation and at least once every four
        (4) years thereafter. If requested by Seller, Idaho Power shall make a
        special inspection or test of a meter and Seller shall pay the reasonable
        costs of such special inspection. 

	 
	 	 Both Parties shall be notified of the time when
        any inspection or test shall take place, and each Party may have representatives
        present at the test or inspection. If a meter is found to be inaccurate
        or defective, it shall be adjusted, repaired or replaced, at Idaho Power's
        expense in order to provide accurate metering. If a meter fails to register,
        or if the measurement made by a meter during a test varies by more than
        two percent (2%) from the measurement made by the standard meter used
        in the test, adjustment (either upward or downward) to the payments Seller
        has received shall be made to correct those payments affected by the inaccurate
        meter for the actual period during which inaccurate measurements were
        made. If the actual period cannot be determined, corrections to the payments
        will be based on the shorter of (1) a period equal to one- half the time
        from the date of the last previous test of the meter to the date of the
        test which established the inaccuracy of the meter; or (2) six (6) months.
      

 - 14 - 

 

	 11.3      	 Telemetry – Idaho Power will install,
        operate and maintain at Seller's expense metering, communications and
        telemetry equipment which will be capable of providing Idaho Power with
        continuous instantaneous telemetry of the Facility’s generation,
        Net Energy and Inadvertent Energy amounts delivered by the Transmitting
        Entity, to Idaho Power's Designated Dispatch Facility. 

	 
	 11.4      	 If, (1) the Transmitting Entity provides and maintains
        Metering and Telemetry equipment in a manner that is acceptable to Idaho
        Power, and (2) the Metering and Telemetry equipment is capable of providing
        Idaho Power with the same data as specified in paragraph 11.1, 11.2 and
        11.3, and (3) Idaho Power is provided with manual and automated access
        to the Transmitting Entity’s Meters and Telemetry equipment and
        associated data, and (4) the Seller provides communication circuits and
        pays all expenses associated with these communication circuits and any
        other expenses associated with Idaho Power accessing this data for the
        full term of this Agreement, Idaho Power will not install Metering and
        Telemetry equipment that would duplicate the Metering and Telemetry equipment
        provided by the Transmitting Entity. 

 ARTICLE XII - RECORDS 

	 12.1      	 Maintenance of Records - Seller shall maintain
        at the Facility or such other location mutually acceptable to the Parties
        adequate total generation, Net Energy, Station Use and Inadvertent Energy
        records in a form and content recommended by Idaho Power. 

	 
	 12.2      	 Inspection - Either Party, after reasonable
        notice to the other Party, shall have the right, during normal business
        hours, to inspect and audit any or all generation, Net Energy, Station
        Use and Inadvertent Energy records pertaining to the Seller's Facility.
      

 ARTICLE XIII - PROTECTION 

	 13.1      	 Seller will construct, operate and maintain the
        Facility and Seller-furnished Interconnection Facilities in accordance
        with Prudent Electrical Practices, the National Electric Safety Code and
        any other applicable local, state and federal codes. 

 - 15 - 

 ARTICLE XIV - OPERATIONS 

	 14.1	 Communications - Idaho Power, the
        Transmitting Entity and the Seller shall maintain appropriate operating
        communications through Idaho Power’s Designated Dispatch Facility
        in accordance with Appendix A of this Agreement. 

	 
	 14.2  	 Energy Acceptance – 

	 
	 	 14.2.1   
          
	 Idaho Power shall be excused from accepting and
        paying for Net Energy or accepting Inadvertent Energy produced by the
        Facility and delivered by the Transmitting Entity to the Point of Delivery,
        if it is prevented from doing so by an event of Force Majeure, or if Idaho
        Power determines that curtailment, interruption or reduction of Net Energy
        or Inadvertent Energy deliveries is necessary because of line construction
        or maintenance requirements, emergencies, electrical system operating
        conditions on its system or as otherwise required by Prudent Electrical
        Practices provided that during such curtailment, interruption or reduction
        Idaho Power, the Transmitting Entity and the Seller shall with reasonable
        limits attempt to coordinate, schedule and deliver Net Energy to the Idaho
        Power electrical system at other Points of Delivery if Idaho Power is
        capable of accepting the Net Energy deliveries at the other Points of
        Delivery. If, for reasons other than an event of Force Majeure, Idaho
        Power requires such a curtailment, interruption or reduction of Net Energy
        deliveries for a period that exceeds twenty (20) days, beginning with
        the twenty-first day of such interruption, curtailment or reduction, Seller
        will be deemed to be delivering Net Energy at a rate equivalent to the
        pro rata daily average of the amounts specified for the applicable month
        in paragraph 6.2. Idaho Power will notify Seller when the interruption,
        curtailment or reduction is terminated. 

	 
	 	 14.2.2      
	 Under no circumstances will the Transmitting Entity
        deliver Net Energy and/or Inadvertent Energy on behalf of the Seller’s
        Facility to the Point of Delivery in an amount that exceeds the Maximum
        Capacity Amount at any moment in time. Delivery of Net Energy and/or Inadvertent
        Energy by the Transmitting Entity to the Point of Delivery 

 - 16 - 

 

	 	 
	that exceeds the Maximum Capacity Amount will be a Material Breach of
      this Agreement. 
	 
	 14.3      
	 Seller Declared Suspension of Energy
        Deliveries 

	 
	 	 14.3.1
	 If the Seller’s Facility experiences a forced
        outage due to equipment failure which is not caused by an event of Force
        Majeure or by neglect, disrepair or lack of adequate preventative maintenance
        of the Seller’s Facility, Seller may, after giving notice as provided
        in paragraph 14.3.2 below, temporarily suspend or reduce all deliveries
        of Net Energy to Idaho Power from the Facility or from individual generation
        unit(s) within the Facility impacted by the forced outage for a period
        of not less than 48 hours to correct the forced outage condition (“Declared
        Suspension of Energy Deliveries”). The Seller’s Declared Suspension
        of Energy Deliveries will begin at the start of the next full hour following
        the Seller’s telephone notification as specified in paragraph 14.3.2
        and will continue for the time as specified (not less than 48 hours) in
        the written notification provided by the Seller. In the month(s) in which
        the Declared Suspension of Energy occurred, the Net Energy Amount will
        be adjusted as specified in paragraph 6.2.4. 

	 
	 	 14.3.2      
	 If the Seller desires to initiate a Declared Suspension
        of Energy Deliveries as provided in paragraph 14.3.1, the Seller will
        notify the Designated Dispatch Facility by telephone. 

      The beginning hour of the Declared Suspension of Energy
        Deliveries will be at the earliest the next full hour after making telephone
        contact with Idaho Power. The Seller will, within 24 hours after the telephone
        contact, provide Idaho Power a written notice in accordance with Article
        XXVIII that will contain the beginning hour and duration of the Declared
        Suspension of Energy Deliveries and a description of the conditions that
        caused the Seller to initiate a Declared Suspension of Energy Deliveries.
        Idaho Power will review the documentation provided by the Seller to determine
        Idaho Power’s acceptance of the described forced outage as qualifying
        for a Declared Suspension of Energy Deliveries as specified in paragraph
        14.3.1. Idaho Power’s acceptance of the Seller’s forced outage
        as an acceptable forced outage will be based upon the clear documentation
      

 - 17 - 

 

	 	 	 provided by the Seller that the forced outage is
        not due do an event of Force Majeure or by neglect, disrepair or lack
        of adequate preventative maintenance of the Seller’s Facility. 

	 
	 14.4      	 Adjustment of Geothermal Well Production
        Contribution Ratings – Prior to the Operation Date and within
        30 days after the end of the first Contract Year the Seller may adjust
        the Geothermal Well Production Contribution Ratings specified in Appendix
        B. For the remaining term of this Agreement the Seller may adjust the
        Geothermal Well Production Contribution Ratings at the time that a production
        well originally identified in Appendix B or added to the facility in accordance
        with paragraph 14.4 of this Agreement is permentantly taken out of service
        or when a new production well is placed into service. In all circumstances
        the sum of the individual Geothermal Well Production Contribution Ratings
        must always be equal to the generator rating specified in Appendix B.
      

	 
	 14.5      	 Voltage Levels - Seller, in accordance
        with Prudent Electrical Practices shall minimize voltage fluctuations
        and maintain voltage levels acceptable to the Transmitting Entity and
        Idaho Power. Idaho Power may, in accordance with Prudent Electrical Practices,
        upon one hundred eighty (180)days' notice to the Transmitting Entity and
        the Seller, change its nominal operating voltage level by more than ten
        percent (10%) at the Point of Delivery, in which case Seller shall modify,
        at Idaho Power's expense, Seller's equipment as necessary to accommodate
        the modified nominal operating voltage level. 

	 
	 14.6      	 Generator Ramping - Idaho Power,
        in accordance with Prudent Electrical Practices, shall have the right
        to limit the rate that generation is changed at startup, during normal
        operation or following reconnection to the Transmitting Entity and Idaho
        Power's system. Generation ramping may be required to permit Idaho Power's
        voltage regulation equipment time to respond to changes in power flow.
      

	 
	 14.7      	 Scheduled Maintenance – On
        or before January 31 of each calendar year, Seller shall submit a written
        proposed maintenance schedule of significant Facility maintenance for
        that calendar year and Idaho Power and Seller shall mutually agree as
        to the acceptability of the proposed schedule. The Parties determination
        as to the acceptability of the Seller’s timetable for scheduled
      

 - 18 - 

 

	 	 maintenance will take into consideration Prudent
        Electrical Practices, Idaho Power system requirements and the Seller’s
        preferred schedule. Neither Party shall unreasonably withhold acceptance
        of the proposed maintenance schedule. 

	 
	 14.8      	 Maintenance Coordination - The Seller, Idaho
        Power and the Transmitting Entity shall, to the extent practical, coordinate
        their respective line and Facility maintenance schedules such that they
        occur simultaneously. 

	 
	 14.9      	 Contact Prior to Curtailment - Idaho Power
        will make a reasonable attempt to contact Seller and/or the Transmitting
        Entity prior to exercising its rights to curtail, interrupt or reduce
        deliveries from the Transmitting Entity from the Seller’s Facility.
        Seller and the Transmitting Entity understand that in the case of emergency
        circumstances, real time operations of the electrical system, and/or unplanned
        events Idaho Power may not be able to provide notice to the Seller or
        the Transmitting Entity prior to interruption, curtailment, or reduction
        of electrical energy deliveries to Idaho Power. 

 ARTICLE XV: RELIABILITY MANAGEMENT SYSTEM 

	 15.1      	 Purpose. In order to maintain the reliable operation
        of the transmission grid, the WECC Reliability Criteria Agreement sets
        forth reliability criteria adopted by the WECC to which Seller and Idaho
        Power shall be required to comply. Seller acknowledges receipt of and
        understanding of the WECC Reliability Criteria Agreement and how it pertains
        to the Seller’s facility. 

	 	 
	 15.2      	 Compliance. Seller shall comply with the requirements
        of the WECC Reliability Criteria Agreement, including the applicable WECC
        reliability criteria set forth in Section IV of Annex A thereof, and,
        in the event of failure to comply, Seller agrees to be subject to the
        sanctions applicable to such failure. Such sanctions shall be assessed
        pursuant to the procedures contained in the WECC Reliability Criteria
        Agreement. Each and all of the provisions of the WECC Reliability Criteria
        Agreement are hereby incorporated by reference into this Article 15 as
        though set forth fully herein, and Seller shall for all purposes be considered
        a Participant, and shall be entitled to all of the rights and privileges
        and be subject to all of the obligations of a 

 - 19 - 

 

	 	 Participant, under and in connection with the WECC
        Reliability Criteria Agreement, including, but not limited to the rights,
        privileges and obligations set forth in Sections 5, 6 and 10 of the WECC
        Reliability Criteria Agreement. 

	 
	 15.3      	 Payment of Sanctions. Seller shall be responsible
        for reimbursing Idaho Power for any monetary sanctions assessed against
        Idaho Power due to the action or inaction of the Seller by WECC pursuant
        to the WECC Reliability Criteria Agreement. Seller also shall be responsible
        for payment of any monetary sanction assessed against the Seller by WECC
        pursuant to the WECC Reliability Criteria Agreement. Any such payment
        shall be made pursuant to the procedures specified in the WECC Reliability
        Criteria Agreement. 

	 
	 15.4      	 Transfer of Control or Sale of Generation Facilities.
        In any sale or transfer of control of any generation facilities subject
        to this Agreement, Seller shall, as a condition of such sale or transfer,
        require the acquiring party or transferee with respect to the transferred
        facilities either to assume the obligations of the Seller with respect
        to this Agreement or to enter into an agreement with Idaho Power imposing
        on the acquiring party or transferee the same obligations applicable to
        the Seller pursuant to this Article 15. 

	 
	 15.5      	 Publication. Seller consents to the release
        by the WECC of information related to the Seller’s compliance with
        this Agreement only in accordance with the WECC Reliability Criteria Agreement.
      

	 
	 15.6      	 Third Parties. Except for the rights and
        obligations between the WECC and the Seller specified in this Article
        15, this Agreement creates contractual rights and obligations solely between
        the Parties. Nothing in this Agreement shall create, as between the Parties
        or with respect to the WECC: (a) any obligation or liability whatsoever
        (other than as expressly provided in this Agreement), or (b) any duty
        or standard of care whatsoever. In addition, nothing in this Agreement
        shall create any duty, liability or standard of care whatsoever as to
        any other party. Except for the rights, as a third-party beneficiary under
        this Article 15, of the WECC against the Seller for the Seller, no third
        party shall have any rights whatsoever with respect to enforcement of
        any provision of this Agreement. Idaho Power and the Seller expressly
        intend that the WECC 

 - 20 - 

 

	 	 is a third-party beneficiary to this Article
        15, and the WECC shall have the right to seek to enforce against the Seller
        any provision of this Article 15, provided that specific performance shall
        be the sole remedy available to the WECC pursuant to Article 15 of this
        Agreement, and the Seller shall not be liable to the WECC pursuant to
        this Agreement for damages of any kind whatsoever (other than the payment
        of sanctions to the WECC, if so construed), whether direct, compensatory,
        special, indirect, consequential, or punitive. 

	 
	 15.7      	 Reserved Rights. Nothing in the
        Article 15 of this Agreement or the WECC Reliability Criteria Agreement
        shall affect the right of Idaho Power, subject to any necessary regulatory
        approval, to take such other measures to maintain reliability, including
        disconnection that Idaho Power may otherwise be entitled to take. 

	 
	 15.8      	 Termination of Article 15. Seller
        may terminate its obligations pursuant to this Article 15: 

	 
	 	 15.8.1
	 If after the effective date of this Article 15,
        the requirements of the WECC Reliability Criteria Agreement applicable
        to the Seller are amended so as to adversely affect the Seller, provided
        that the Seller gives fifteen (15) days’ notice of such termination
        to Idaho Power and WECC within forty-five (45) days of the date of issuance
        of a Commission order accepting such amendment for filing, provided further
        that the forty-five (45) day period within which notice of termination
        is required may be extended by the Seller for an additional forty-five
        (45) days if the Seller gives written notice to Idaho Power of such requested
        extension within the initial forty-five (45) day period; or 

	 
	 	 15.8.2
	 For any reason on one year’s written notice
        to Idaho Power and the WECC. 

 ARTICLE XVI: INDEMNIFICATION AND INSURANCE 

	 16.1      	 Indemnification - Each Party shall agree
        to hold harmless and to indemnify the other Party, its officers, agents,
        affiliates, subsidiaries, parent company and employees against all loss,
        damage, expense and liability to third persons for injury to or death
        of person or injury to property, proximately caused by the indemnifying
        Party’s construction, ownership, operation or 

 - 21 - 

 

	 	 maintenance of, or by failure of, any
        of such Party’s works or facilities used in connection with this
        Agreement. The indemnifying Party shall, on the other Party’s request,
        defend any suit asserting a claim covered by this indemnity. The indemnifying
        Party shall pay all costs, including reasonable attorney fees that may
        be incurred by the other Party in enforcing this indemnity. 

	 
	 16.2      	 Insurance - During the term of
        this Agreement, Seller shall secure and continuously carry the following
        insurance coverage: 

	 
	 	 16.2.1
	 Comprehensive General Liability Insurance
        for both bodily injury and property damage with limits equal to $1,000,000,
        each occurrence, combined single limit. The deductible for such insurance
        shall be consistent with current Insurance Industry Utility practices
        for similar property. 

	 
	 	 16.2.2 
	 The above insurance coverage shall be
        placed with an insurance company with an A.M. Best Company rating of A-
        or better and shall include: 

	 
	 	 	 (a)      
	 An endorsement naming Idaho Power as an additional
        insured and loss payee as applicable; and 

	 
	 	 	 (b)     
      
	 A provision stating that such policy shall not be
        canceled or the limits of liability reduced without sixty (60) days’
        prior written notice to Idaho Power. 

	 
	 16.3      	 Seller to Provide Certificate of Insurance
        - As required in paragraph 4.1.5 herein and annually thereafter, Seller
        shall furnish Idaho Power a certificate of insurance, together with the
        endorsements required therein, evidencing the coverage as set forth above.
      

	 
	 16.4      	 Seller to Notify Idaho Power of Loss
        of Coverage - If the insurance coverage required by paragraph 16.2
        shall lapse for any reason, Seller will immediately notify Idaho Power
        in writing. The notice will advise Idaho Power of the specific reason
        for the lapse and the steps Seller is taking to reinstate the coverage.
        Failure to provide this notice and to expeditiously reinstate or replace
        the coverage will constitute a Material Breach of this Agreement. 

 ARTICLE XVII. FORCE MAJEURE 

	 17.1      	 As used in this Agreement, “Force Majeure”
        or “an event of Force Majeure” means any cause 

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	 	 beyond the control of the Seller,
        Transmitting Entity or of Idaho Power which, despite the exercise of due
        diligence, such Party is unable to prevent or overcome. Force Majeure
        includes, but is not limited to, acts of God, fire, flood, storms, wars,
        hostilities, civil strife, strikes and other labor disturbances, earthquakes,
        fires, lightning, epidemics, sabotage, or changes in law or regulation
        occurring after the Operation Date, which, by the exercise of reasonable
        foresight such party could not reasonably have been expected to avoid
        and by the exercise of due diligence, it shall be unable to overcome.
        If either Party is rendered wholly or in part unable to perform its obligations
        under this Agreement because of an event of Force Majeure, both Parties
        shall be excused from whatever performance is affected by the event of
        Force Majeure, provided that: 

	 	 (1) 	 The non-performing Party
        shall, as soon as is reasonably possible after the occurrence of the Force
        Majeure, give the other Party written notice describing the particulars
        of the occurrence.

	 	 	 
	 	 (2) 	 The suspension of performance
        shall be of no greater scope and of no longer duration than is required
        by the event of Force Majeure.

	 	 	 
	 	 (3) 	 No obligations of either
        Party which arose before the occurrence causing the suspension of performance
        and which could and should have been fully performed before such occurrence
        shall be excused as a result of such occurrence.

 ARTICLE XVIII: LIABILITY; DEDICATION 

	 18.1      	 Nothing in this Agreement shall be construed to
        create any duty to, any standard of care with reference to, or any liability
        to any person not a Party to this Agreement. No undertaking by one Party
        to the other under any provision of this Agreement shall constitute the
        dedication of that Party’s system or any portion thereof to the
        other Party or to the public or affect the status of Idaho Power as an
        independent public utility corporation or Seller as an independent individual
        or entity. 

 - 23 - 

 ARTICLE XIX: SEVERAL OBLIGATIONS 

	 19.1  	 Except where specifically stated in this Agreement
        to be otherwise, the duties, obligations and liabilities of the Parties
        are intended to be several and not joint or collective. Nothing contained
        in this Agreement shall ever be construed to create an association, trust,
        partnership or joint venture or impose a trust or partnership duty, obligation
        or liability on or with regard to either Party. Each Party shall be individually
        and severally liable for its own obligations under this Agreement. 

 ARTICLE XX: WAIVER 

	 20.1  	 Any waiver at any time by either Party of its rights
        with respect to a default under this Agreement or with respect to any
        other matters arising in connection with this Agreement shall not be deemed
        a waiver with respect to any subsequent default or other matter. 

 ARTICLE XXI: CHOICE OF LAWS AND VENUE 

	 21.1      	 This Agreement shall be construed and interpreted
        in accordance with the laws of the State of Idaho without reference to
        its choice of law provisions. 

	 	 
	 21.2      	 Venue for any litigation arising out of or related
        to this Agreement will lie in the District Court of the Fourth Judicial
        District of Idaho in and for the County of Ada. 

 ARTICLE XXII: DISPUTES AND DEFAULT 

	 22.1      	 Disputes - All disputes related
        to or arising under this Agreement, including, but not limited to, the
        interpretation of the terms and conditions of this Agreement, will be
        submitted to the Commission for resolution. 

	 
	 22.2      	 Notice of Default - 

	 
	 	 22.2.1
	 Defaults. If either Party fails to perform
        any of the terms or conditions of this Agreement (an “event of default”),
        the nondefaulting Party shall cause notice in writing to be given to the
        defaulting Party, specifying the manner in which such 

 - 24 -

 

	 	  	default occurred. If the defaulting Party shall fail
        to cure such default within the sixty (60) days after service of such
        notice, or if the defaulting Party reasonably demonstrates to the other
        Party that the default can be cured within a commercially reasonable time
        but not within such sixty (60) day period and then fails to diligently
        pursue such cure, then, the nondefaulting Party may, at its option, terminate
        this Agreement and/or pursue its legal or equitable remedies. 

	 
	 	 22.2.2
	 Material Breaches – The notice and
        cure provisions in paragraph 22.2.1 do not apply to defaults identified
        in this Agreement as Material Breaches. Material Breaches must be cured
        as expeditiously as possible following occurrence of the breach. 

	 
	 22.3      	 Security for Performance - Prior
        to the Operation Date and thereafter for the full term of this Agreement,
        Seller will provide Idaho Power with the following: 

	 
	 	 22.3.1
	 Insurance - Evidence of compliance with the
        provisions of paragraph 16.2. If Seller fails to comply, such failure
        will be a Material Breach and may only be cured by Seller supplying
        evidence that the required insurance coverage has been replaced or reinstated;
      

	 
	 	 22.3.2  
	 Engineer’s Certifications - Every three
        (3) years after the Operation Date, Seller will supply Idaho Power with
        a Certification of Ongoing Operations and Maintenance (O & M) from
        a Registered Professional Engineer licensed in the State of Idaho, which
        Certification of Ongoing O & M shall be in the form specified in Appendix
        C. Seller’s failure to supply the required certificate will be an
        event of default. Such a default may only be cured by Seller providing
        the required certificate; and 

	 
	 	 22.3.3
	 Licenses and Permits - During the full term
        of this Agreement, Seller shall maintain compliance with all permits and
        licenses described in paragraph 4.1.1 of this Agreement. In addition,
        Seller will supply Idaho Power with copies of any new or additional permits
        or licenses. At least every fifth Contract Year, Seller will update the
        documentation described in Paragraph 4.1.1. If at any time Seller fails
        to maintain compliance with the permits and licenses described in paragraph
        4.1.1 or to provide 

 - 25 -

 

	 	 	the documentation required by this paragraph, such
        failure will be an event of default and may only be cured by Seller
        submitting to Idaho Power evidence of compliance from the permitting
        agency. 

ARTICLE XXIII: GOVERNMENTAL AUTHORIZATION 

	 23.1      	 This Agreement is subject to the jurisdiction of
        those governmental agencies having control over either Party of this Agreement.
      

 ARTICLE XXIV: COMMISSION ORDER 

	 24.1	 This Agreement shall become finally effective upon
        the Commission’s approval of all terms and provisions hereof without
        change or condition and declaration that all payments to be made to Seller
        hereunder shall be allowed as prudently incurred expenses for ratemaking
        purposes. 

 ARTICLE XXV: SUCCESSORS AND ASSIGNS 

	 25.1	 This Agreement and all of the terms and provisions
        hereof shall be binding upon and inure to the benefit of the respective
        successors and assigns of the Parties hereto, except that no assignment
        hereof by either Party shall become effective without the written consent
        of both Parties being first obtained. Such consent shall not be unreasonably
        withheld. Notwithstanding the foregoing, any party which Idaho Power may
        consolidate, or into which it may merge, or to which it may convey or
        transfer substantially all of its electric utility assets, shall automatically,
        without further act, and without need of consent or approval by the Seller,
        succeed to all of Idaho Power’s rights, obligations and interests
        under this Agreement. This article shall not prevent a financing entity
        with recorded or secured rights from exercising all rights and remedies
        available to it under law or contract. Idaho Power shall have the right
        to be notified by the financing entity that it is exercising such rights
        or remedies. 

 - 26 - 

 ARTICLE XXVI: MODIFICATION 

	 26.1      	 No modification to this Agreement shall be valid
        unless it is in writing and signed by both Parties and subsequently approved
        by the Commission. 

 ARTICLE XXVII: TAXES 

	 27.1      	 Each Party shall pay before delinquency all taxes
        and other governmental charges which, if failed to be paid when due, could
        result in a lien upon the Facility or the Interconnection Facilities.
      

 ARTICLE XXVIII: NOTICES 

	 28.1      	 All written notices under this agreement shall be
        directed as follows and shall be considered delivered when deposited in
        the U. S. Mail, first-class postage prepaid, as follows: 

	 To Seller:  	 US Geothermal Inc.  
	  	 Attn: Daniel Kunz  
	  	 1509 Tyrell Lane, Suite B  
	  	 Boise, Idaho 83706  
	  	 
	  	 
	 To Idaho Power:  	 Vice President, Power Supply  
	  	 Idaho Power Company  
	  	 P O Box 70  
	  	 Boise, Idaho 83707  

 ARTICLE XXIX: ADDITIONAL TERMS AND CONDITIONS 

	 29.1      	 This Agreement includes the following appendices,
        which are attached hereto and included by reference: 

	 	 	 	Appendix A          -                     Generation
      Scheduling and Reporting 
	 	 	 	Appendix B          -                     Facility
      and Point of Delivery 
	 	 	 	Appendix C          -                     Engineer’s
      Certifications 

 ARTICLE XXX: SEVERABILITY 

	 30.1      	 The invalidity or unenforceability of any term or
        provision of this Agreement shall not affect the validity or enforceability
        of any other terms or provisions and this Agreement shall be construed
      

 - 27 - 

 

	 	in all other respects as if the invalid or unenforceable term or provision
      were omitted. 

 ARTICLE XXXI: COUNTERPARTS 

	 31.1      	 This Agreement may be executed in two or more counterparts,
        each of which shall be deemed an original but all of which together shall
        constitute one and the same instrument. 

 ARTICLE XXXII: ENTIRE AGREEMENT 

	 32.1      	 This Agreement constitutes the entire Agreement
        of the Parties concerning the subject matter hereof and supersedes all
        prior or contemporaneous oral or written agreements between the Parties
        concerning the subject matter hereof. 

                IN
  WITNESS WHEREOF, The Parties hereto have caused this Agreement to be executed
  in their respective names on the dates set forth below:

  

 - 28 - 

 APPENDIX A 

	A –1 	MONTHLY POWER PRODUCTION AND SWITCHING REPORT 
	 	 
	 	At the end of each month the following required documentation will be
      submitted to: 
	 	 
	 	                                     Idaho
        Power Company 

                                            
        Attn: Cogeneration and Small Power Production 

                                            
        P 0 Box 70 

                                            
        Boise, Idaho 83707 

               The
  Meter readings required on this report will be the readings on the Meter
  Equipment measuring the Facility’s generation and Station Use and the
  Idaho Power Meter Equipment measuring Net Energy and Inadvertent Energy delivered
  to the Idaho Power electrical system and/or any other required energy measurements
  to adequately administer this Agreement. If the Idaho Power Metering is not
  located at the point which is able to measure the exact energy deliveries to
  the Idaho Power electrical system, then the metered energy amounts will be adjusted
  to account for electrical Losses occurring between the metering point and the
  point which the energy is delivered to the Idaho Power electrical system. 

 - 29 - 

 Idaho Power Company 

 Cogeneration and Small Power Production

 MONTHLY POWER PRODUCTION AND SWITCHING REPORT 

 Month ___________________       Year
  ___________________

	Project Name	 	    	 	Project Number:	      
	 	 	 	 	 	 
	Address	 	 	 	Phone Number:	 
	 	 	 	 	 	 
	City	 	State	 	Zip	 

	  	 	 Facility  	 	 Local  	 	 Auxiliary  	  	  
	  	 	 Output  	 	 Service  	 	 Service  	  	  
	 Meter Number	:	 
    	 	 
    	 	 
    	  	  
	 End of Month kWh Meter Reading	:	 
    	 	 
    	 	 
    	  	  
	 Beginning of Month kWh Meter	:	 
    	 	 
    	 	 
    	  	  
	 Difference	:	 
    	 	 
    	 	 
    	  	  
	 Times Meter Constant	:	 
    	 	 
    	 	 
    	  	
      Net Generation  
	 kWh for the Month	:	 
    	–	 
    	–	 
    	 =
	 Metered Demand	:	 
    	 	 
    	 	 
    	  

	 Breaker Opening Record  	   	 Breaker Closing Record  

	 Date 
    	 Time 
    	 Meter 
    	 	 *  	 Reason 
    	 	 Date 
    	 Time 
    	 Meter 
    
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 

	 *	 Breaker Opening Reason Codes  	               I
        hereby certify that the above meter readings are true and correct as of
        Midnight on the last day of the above month and that the switching record
        is accurate and complete as required by the Firm Energy Sales Agreement
        to which I am a Party. 

	 1	 Lack of Adequate Prime Mover  
	 2	 Forced Outage of Facility  
	 3	 Disturbance of IPCo System  
	 4	 Scheduled Maintenance  
	 5	 Testing of Protection Systems  
	 6	 Cause Unknown  
	 7	 Other (Explain)  

	 	
      Signature  	 	
      Date  

 - 30 - 

 

	A-2 	ROUTINE REPORTING 
	 	 	 	 	 	 
	 	 	Idaho Power Contact Information
	 	 	 	 
	 	 	 	Daily Energy Production Reporting 
	 	 	 	 
	 	 	 	 	Call daily by 10 a.m., 1-800-356-4328
      or 1-800-635-1093 and leave the following information: 
	 	 	 	 	 
	 	 	 	 	 	•      Project Identification
      - Project Name and Project Number
	 	 	 	 	 	•      Current Meter
      Reading
	 	 	 	 	 	•      Estimated Generation
      for the current day
	 	 	 	 	 	•      Estimated Generation
      for the next day
	 	 	 	 	 	 
	 	 	 	Planned and Unplanned Project outages
	 	 	 	 	 	 
	 	 	 	 	Call 1-800-345-1319 and leave the following
      information: 
	 	 	 	 	 	 
	 	 	 	 	 	•      Project Identification
      - Project Name and Project Number
	 	 	 	 	 	•      Approximate time
      outage occurred
	 	 	 	 	 	•      Estimated day
      and time of project coming back online
	 	 	 	 	 	 
	 	 	Seller’s Contact Information 
	 	 	 	 	 	 
	 	 	 	24-Hour Project Operational Contact 

	 	 	 	 	 Name:  	   	   
	 	 	 	 	 Telephone Number:  	 	 
	 	 	 	 	 Cell Phone:  	 	 
	 	 	 	 	 	 	 
	 	 	 	Project On-site Contact information 
	 	 	 	 	 	 	 
	 	 	 	 	Telephone Number: 	 	 

 - 31 - 

 APPENDIX B 

      FACILITY AND POINT OF DELIVERY

 PROJECT NO. 31765155 

RAFT RIVER GEOTHERMAL POWER PLANT 

	 B-1  	 DESCRIPTION OF FACILITY  
	 	 	 	 
	  	 The Raft River
        Geothermal Power Plant, Unit #1 (RRGPP-1) is currently under design, Appendix
        B shall be amended to include the final details of RRGPP-1 upon completion
        of the design. Failure to provide details acceptable to Idaho Power by
        December 31, 2005 or 6 months prior to the Operation Date (which ever
        occurs first) will be a Material Breach of this Agreement. In general,
        RRGPP-1 is planned to be an air-cooled, 15 MW Facility using geothermal
        fluid in a closed-loop Rankine cycle. The Facility will consist of at
        least four geothermal production wells providing geothermal energy to
        a single generator with a 15.8 MW generator rating.

	 	 	 	 
	  	 	 Geothermal Production Well Contribution
      Ratings as of the date of this Agreement:  
	 	 	 	 
	  	 	 	 The sum of these ratings must equal the generator
      rating specified above.  

	 Production Well RRG#1	 4.55 MW 
	 Production Well RRG#2	 4.23 MW 
	 Production Well RRG#3	 3.95 MW 
	 Production Well RRG#5	 3.07 MW 

	 B-2  	 LOCATION OF FACILITY  
	 	 
	  	 The Facility is located at: Section 23, Township
      15 South, Range 26 East, Cassia County, Idaho.  
	 	 
	 B-3  	 SCHEDULED OPERATION DATE  
	 	 
	  	 Seller has selected June 15, 2006, as the Scheduled
      Operation Date.  
	 	 
	 B-4  	 MAXIMUM CAPACITY AMOUNT: This value (MW) will
      be provided by the Seller to Idaho  
	 	 
	  	 Power in the request for
        an Idaho Power Electrical System Study as specified in paragraph 4.1.8
        of this Agreement. This value will be the maximum energy (MW), as determined
        by a qualified  

 - 32 - 

 

	  	 engineer that potentially
        could be delivered by the Seller’s Facility to the Transmitting
        Entity’s  electrical system at any moment in time.

	 	 
	 B-5  	 POINT OF DELIVERY

	 	 
	  	 “Point of Delivery”
        means, unless otherwise agreed by both Parties, the point of interconnection 
        between Idaho Power and the Transmitting Entity at the Minidoka dam substation.
        The  Transmitting Entity will be the Bonneville Power Administration
        – Transmission Business Line.

	 	 
	 B-6  	 LOSSES 

	 	 
	  	 If Idaho Power is provided
        acceptable and accurate energy (kWh) delivery data by the  Transmitting
        Entity for actual energy delivered at the Point of Delivery on the Idaho
        Power  electrical system for this Facility, no energy loss calculation
        will be required. If the  Transmitting Entity does not provide acceptable
        and accurate energy delivery data to Idaho  Power then a Loss calculation
        will be required. The Loss calculation will consist of the most  accurate
        measurement of the energy losses (kWh), agreed to by both parties, associated
        with  transformation and transmission of the Facility’s generated
        energy between the Transmitting  Entity’s or Idaho Power’s
        metering point and the Point of Delivery on the Idaho Power electrical
         system. This loss calculation will be initially set at 2% of the
        kWh energy production recorded  on the Transmitting Entity’s
        or Idaho Power’s Metering equipment. At such time as the Seller
         provides Idaho Power with electrical equipment specifications (transformer
        loss specifications,  conductor sizes, etc) of all of the electrical
        equipment between the Transmitting Entity’s or  Idaho Power’s
        Metering equipment and the Point of Delivery on the Idaho Power electrical
         system or other acceptable calculations of this energy loss, Idaho
        Power will configure a revised  loss calculation formula to be agreed
        by both parties and used to calculate the kWh Losses for  the remaining
        term of the Agreement. If, at anytime during the term of this Agreement,
        the  Parties agree that the loss calculation does not correctly reflect
        the actual kWh losses attributed  to the electrical equipment between
        the Idaho Power Metering Equipment and the Idaho Power  electrical
        system, Idaho Power shall adjust the calculation and retroactively adjust
        the previous  months kWh loss calculations.

 - 33 - 

 

	 B-7  	 METERING AND TELEMETRY

	 	 
	  	 If Idaho Power is required
        to install metering and telemetry equipment as specified in Article 11
         of this Agreement, the Idaho Power Metering Equipment, provided
        by Idaho Power at the  Sellers expense will be located at a point
        that will enable the Metering Equipment to measure the  Facility’s
        total energy deliveries to the Transmitting Entity. Telemetry equipment
        will be  installed by Idaho Power at the Seller’s expense that
        will be able to provide continuous  telemetering of the Facility’s
        energy deliveries to the Transmitting Entity. The Seller will  arrange
        for and make available at Seller’s cost, a communications circuit
        acceptable to Idaho  Power, dedicated to Idaho Power’s use
        to be used for load profiling and another communications  circuit
        dedicated to Idaho Power’s communication equipment for continuous
        telemetering of the  Facility’s energy deliveries to the Transmitting
        Entity to Idaho Power’s Designated Dispatch  Facility. The
        meters will register kilowatt-hours and kilowatts of demand. Idaho Power
         provided meter and communication equipment will be owned and maintained
        by Idaho Power  with total cost of purchase, installation, operation
        and maintenance including engineering and  administrative cost to
        be reimbursed to Idaho Power by the Seller. Seller metering equipment
         will be located at all necessary points within the Seller’s
        Facility to accurately measure each  generators energy production,
        Station Usage, and any other energy diversions that occur prior to  the
        Idaho Power Metering Equipment.

	  	 
	 B-8  	 REACTIVE POWER

	 	 
	  	 Idaho Power will provide
        no reactive power to the Facility.

	  	 
	 B-9  	 COSTS

	 	 
	  	 The cost of the Metering
        and Telemetry Equipment will be determined based upon the final design
        of the Facility and this total cost will be paid to Idaho Power in accordance
        with Schedule 

 - 34 - 

 

	 	72. In addition to the installation and construction
        charges above, during the term of this Agreement, Seller will pay Idaho
        Power the monthly operation and maintenance charge specified in Schedule
        72 or its successor schedules(s). The monthly operations and maintenance
        charge will begin on the first day of the month following completion of
        the installation of the Idaho Power provided equipment. The monthly operations
        and maintenance charge will be based upon the initial cost paid by the
        Seller in accordance with Schedule 72. Upon reconciliation of the actual
        costs, in accordance with Schedule 72 the monthly operations and maintenance
        charge will be adjusted to reflect the actual cost incurred by Idaho Power
        and the previously charged monthly operation and maintenance expense will
        be revised to reflect the actual cost incurred by Idaho Power. Idaho Power
        will refund or Seller will remit any underpayment of the adjusted
        monthly operations and maintenance charge within sixty (60) days of the
        determination of this amount. In addition, there will be a monthly charge
        for the communication circuit lease cost associated with the telemetry
        equipment. Seller recognizes that the monthly communications circuit charge
        may be adjusted by Idaho Power as the cost to Idaho Power is adjusted
        by the owner of the communication circuit(s).

- 35 - 

 APPENDIX C 

 ENGINEER'S CERTIFICATION 

 OF

 OPERATIONS & MAINTENANCE POLICY 

 The undersigned _____________________________________ , on
  behalf of himself and ____________________________________ , hereinafter collectively
  referred to as "Engineer," hereby states and certifies to the Seller as follows:

1.          That
  Engineer is a Licensed Professional Engineer in good standing in the State of
  Idaho.

 2.          That
  Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement," between
  Idaho Power as Buyer, and US Geothermal, Inc as Seller, dated _______________________________
  .

 3.          That
  the cogeneration or small power production project which is the subject of the
  Agreement and this Statement is identified as IPCo Facility No. ________________
  and is hereinafter referred to as the "Project."

 4.          That
  the Project, which is commonly known as the ____________________________________________________
  Project, is located in Section ______ , Township ______ , Range ______ , Boise
  Meridian, ____________________ County, Idaho.

 5.          That
  Engineer recognizes that the Agreement provides for the Project to furnish electrical
  energy to Idaho Power for a twenty (20) year period.

 6.          That
  Engineer has substantial experience in the design, construction and operation
  of electric power plants of the same type as this Project.

 7.          That
  Engineer has no economic relationship to the Design Engineer of this Project.

 8.          That
  Engineer has reviewed and/or supervised the review of the Policy for Operation
  and Maintenance ("O&M") for this Project and it is his professional opinion
  that, provided said Project has been designed and built to appropriate standards,
  adherence to said O&M Policy will result in the 

- 36 - 

 Project's producing at or near the design electrical output, efficiency and
  plant factor for a twenty (20) year period.

 9.          That
  Engineer recognizes that Idaho Power, in accordance with paragraph 5.2
  of the Agreement, is relying on Engineer's representations and opinions contained
  in this Statement.

 10.          That
  Engineer certifies that the above statements are complete, true and accurate
  to the best of his knowledge and therefore sets his hand and seal below.

  

By ______________________________

 

 

(P.E. Stamp) 

 

 

Date ______________________________

 - 37 - 

 APPENDIX C 

 ENGINEER’S CERTIFICATION

 OF

 ONGOING OPERATIONS AND MAINTENANCE 

                The
  undersigned ____________________________________ , on behalf of himself and________________________________

  hereinafter collectively referred to as “Engineer,” hereby
  states and certifies to the Seller as follows: 

 1.          That
  Engineer is a Licensed Professional Engineer in good standing in the State of
  Idaho. 

 2.          That
  Engineer has reviewed the Energy Sales Agreement, hereinafter “Agreement,”
  between Idaho Power as Buyer, and US Geothermal, Inc as Seller, dated _________________________________.

 3.          That
  the cogeneration or small power production project which is the subject of the
  Agreement and this Statement is identified as IPCo Facility No. _____________
  and hereinafter referred to as the “Project”. 

 4.          That
  the Project, which is commonly known as the_______________________________________________________________

  Project, is located at ____________________________________________________________________.

 5.          That
  Engineer recognizes that the Agreement provides for the Project to furnish electrical
  energy to Idaho Power for a twenty (20) year period. 

 6.          That
  Engineer has substantial experience in the design, construction and operation
  of electric power plants of the same type as this Project. 

 7.          That
  Engineer has no economic relationship to the Design Engineer of this Project.

 8.          That
  Engineer has made a physical inspection of said Project, its operations and
  maintenance records since the last previous certified inspection. It is Engineer’s
  professional opinion, based on the Project’s appearance, that its ongoing
  O&M has been substantially in accordance with said O&M Policy; that
  it is in reasonably good operating condition; and that if adherence to said
  O&M Policy continues, the Project will continue producing at or near its
  design electrical output, efficiency and plant factor for the

 - 38 - 

 remaining ______ years of the Agreement. 

 9.          That
  Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the
  Agreement, is relying on Engineer’s representations and opinions contained
  in this Statement. 

 10.          That
  Engineer certifies that the above statements are complete, true and accurate
  to the best of his knowledge and therefore sets his hand and seal below. 

  

By ______________________________

 

 

(P.E. Stamp) 

 

 

Date ______________________________

 - 39 - 

 APPENDIX C 

 ENGINEER'S CERTIFICATION

 OF

 DESIGN & CONSTRUCTION ADEQUACY 

                The
  undersigned _____________________________________ , on behalf of himself and
  ______________________________, hereinafter collectively referred to as "Engineer",
  hereby states and certifies to Idaho Power as follows:

 1.          That
  Engineer is a Licensed Professional Engineer in good standing in the State of
  Idaho.

 2.          That
  Engineer has reviewed the Firm Energy Sales Agreement, hereinafter "Agreement",
  between Idaho Power as Buyer, and US Geothermal, Inc as Seller, dated _______________________________
  .

 3.          That
  the cogeneration or small power production project which is the subject of the
  Agreement and this Statement is identified as IPCo Facility No ________________
  and is hereinafter referred to as the "Project".

 4.          That
  the Project, which is commonly known as the ____________________________________________________
  Project, is located in Section ______ , Township ______ , Range ______ , Boise
  Meridian, ____________________ County, Idaho.

 5.          That
  Engineer recognizes that the Agreement provides for the Project to furnish electrical
  energy to Idaho Power for a ___________ (_______ ) year period.

 6.          That
  Engineer has substantial experience in the design, construction and operation
  of electric power plants of the same type as this Project.

 7.          That
  Engineer has no economic relationship to the Design Engineer of this Project
  and has made the analysis of the plans and specifications independently.

 8.          That
  Engineer has reviewed the engineering design and construction of the Project,
  including the civil work, electrical work, generating equipment, prime mover
  conveyance system, Seller furnished Interconnection Facilities and other Project
  facilities and equipment.

 - 40 - 

 9.          That
  the Project has been constructed in accordance with said plans and specifications,
  all applicable codes and consistent with Prudent Electrical Practices as that
  term is described in the Agreement.

 10..          That
  the design and construction of the Project is such that with reasonable and
  prudent operation and maintenance practices by Seller, the Project is capable
  of performing in accordance with the terms of the Agreement and with Prudent
  Electrical Practices for a (___) year period. 

11.         That Engineer
  recognizes that Idaho Power, in accordance with paragraph 5.2 of the
  Agreement, in interconnecting the Project with its system, is relying on Engineer's
  representations and opinions contained in this Statement.

 12.          That
  Engineer certifies that the above statements are complete, true and accurate
  to the best of his knowledge and therefore sets his hand and seal below.

  

By ______________________________

 

 

(P.E. Stamp) 

 

 

Date ______________________________

 - 41 - 

 Idaho Power routing and review – 

	  	 E-mailed to:  	 Comments  

      receiving back  	 Comments  

      incorporated  	 Approved 
	 

      Developer  	 Supplied to  

      Connelly Ward on  

      12/9/2004  	  	  	 Dan Kunz confirmed in e- mail on 12/28/04 that
      agreement was acceptable 
	 

      Bart Kline  	 

      12/6/2004  	 

      12/7/2004  	 

      12/7/2004  	 Bart provided final comments on 12/7/2004 Approved
      
 

      Discussed agreement with Bart on 12/23 he advised the agreement was acceptable
      with the changes that were still under discussion. 
	 

      Karl Bokenkamp  	 

      12/6/2004  	 

      12/9/2004  	 

      12/9/2004  	 Met and with through questions on 12/9–
      approved 
 

      Discussed changes with Karl on 12/27 he advised they are acceptable. 

      Routed a complete copy to Karl on 12/27 for a final review if he desired
    
	Monica Moen  	    	    	    	    
	 Lisa Grow /  

      Marsha Leese  	 12/6/2004  	    12/7/2004  	 12/7/2004  	 Approved as 

      written 
	 Vern Porter  	 Disclosure consent  

      required –sent to  

      US Geothermal on  

      12/28/2004  	  	  	 

 - 42 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}]]