1. Power Purchase Agreement from a Utility Perspective Marilynn Semro Seattle City Light May 11, 2005 Are Geothermal Projects Different than Other Resources?

2. 2 §In the beginning §Minimum Information Requirements §Plan for an Agreement = MOU §Long-term PPA §Where do we go from here Agenda Seattle City City Light Light

3. 3 In the beginning §There are hurdles l Integrated Resource Plan l Request for Proposals (“RFP”) l Memorandum of Understanding (“MOU”) Letter of Intent (“LOI”) or … l Purchase and Sale Agreement (“PPA”) §Or maybe in lieu of an RFP l If the utility provides for “cost-effective renewable opportunities” they will accept unsolicited proposals Seattle City City Light Light

4. 4 Min Information Requirements §Project description including generation type, location, size, expected annual energy, on-line date, term, cost, inclusion of environmental attributes §Status of leases, permits, environmental review §Shape of energy §Transmission l Interconnection point l Status of transmission service reservations or studies §Project schedule §Project ownership, financing, developer experience Seattle City City Light Light

5. 5 Plan for Agreement = MOU §Typically includes: l Resource Description l Amount + Associated Environmental Attributes l Term, Extensions l Price l Point of Interconnection l “Boiler Plate” E.g. Assignment, Good Faith, Confidentiality, Conditions Subsequent, Nature of the MOU, Governing Law & Venue Seattle City City Light Light

6. 6 Plan for Agreement = MOU cont’d §Other Provisions: l Milestones for Resource Development Obtaining exploratory drilling permits Commence exploratory drilling Report of sufficiency documenting quality and quantity of the resource for economic development All required permits and regulatory approvals including EIS Construction financing On-line date l Defines party responsible and timeline for securing transmission l Termination provisions for failure to meet milestones l Output guaranty Seattle City City Light Light

7. 7 Long-Term PPA Seattle City City Light Light §Definitions§Metering §Term & Termination§Defaults & Remedies §Deliveries§Confidentiality §Price§Insurance §Scheduling, Operations§Force Majeure §Guarantees§Disputes §Transmission§Notices §Billing, Audits & Credit§“Boiler Plate”

8. 8 Where Do We Go From Here? §Approval §Implementation and Resource/Contract Management Seattle City City Light Light

9. 9 Questions §?§? Seattle City City Light Light