SCHEDULE 62 COGENERATION AND SMALL POWER PRODUCTION SCHEDULE - IDAHO

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First Revision Sheet 62 62 I.P.U.C. No. 28 Original Sheet 62 SCHEDULE 62 COGENERATION AND SMALL POWER PRODUCTION SCHEDULE - IDAHO AVAILABLE: In all the electric territory served by the Company in the State of Idaho. APPLICABLE: To any Customer who installs and owns facilities on property owned by the Customer for the purposes of generating electric energy in parallel with the Company s system. To be eligible under this tariff the facility must qualify as a cogeneration facility or a small power production facility pursuant to Section 201 of the Public Utility Regulatory Policies Act of 1978, or be eligible for the net metering option defined on Sheet 62F. For output from qualifying facilities, this tariff will be limited to qualifying facilities with a generation capacity under 1 megawatt. Customers selling electric energy from a qualifying facility to the Company under this tariff will be required to enter into a written agreement with the Company which may be subject to the approval of the Idaho Public Utilities Commission and the Washington Utilities and Transportation Commission. In addition, any such written agreement relying upon the rates in this tariff shall contain language providing for security, if applicable, against the potential overpayment existing should the Customer s generating facilities fail to perform as contracted. DEFINITIONS: Customer as used herein means any individual, partnership, corporation, association, governmental agency, political subdivision, municipality or other entity. Cogeneration facility means equipment used to produce electric energy and forms of useful thermal energy (such as heat or steam), used for industrial, commercial, heating, or cooling purposes, through the sequential use of energy. Net metering means measuring the difference between the electricity supplied by an electric utility and the electricity generated by a customer-generator that is fed back to the electric utility over the applicable billing period. Small power production facility means the equipment used to produce electric energy solely by the use of biomass, waste, solar power, wind, water or any other renewable resource. POWER RATES: The Company agrees to pay the following rates for the purchase of power from Customers to whom this tariff applies. The following rates are for power delivered to the Company s system. These rates are adjusted annually and are on file with the Idaho Public Utilities Commission.

First Revision Sheet 62A Original Sheet 62A 62A SCHEDULE 62A - continued (1) Standard Fueled Firm Energy Rate - The rates shall apply depending upon the online operation date and term of the agreement when the Customer agrees to supply firm energy deliveries under contract. The rates shall be fixed for the term of the agreement and shall be paid for all kilowatt-hours produced. (2) Optional Firm Energy Rates for Non-Levelized Contracts - These average rates shall apply when the Customer agrees to supply firm energy deliveries in each year as specified under a non-levelized contract. The rates shall be fixed for each year as shown, and shall be paid for all kilowatt-hours produced. (3) Firm Energy Adjustable Rate - The rate shall be paid to existing contracts calling for the payment of firm energy adjustable rates based upon Colstrip fuel and variable O&M costs. The rate shall be paid for all kilowatt-hours produced. *Firm Energy Adjustable Payment mills/kwh *The Firm Energy Adjustable Rate will remain in effect until updated and approved by the Idaho Public Utilities Commission. The Firm Energy Adjustable Rate is equal to the total fuel and variable O&M cost of Colstrip units 3 and 4, adjusted upward by a 5% line loss factor and multiplied by the respective seasonal factor. (4) Nonfirm Energy Rate - The Nonfirm Energy Rate shall be applicable when the Customer agrees to provide energy deliveries on a nonfirm, contracted basis. The Company agrees to pay the actual avoided energy cost for each month of the year. The Nonfirm Energy Rate for any month shall be the average of the hourly highest dispatchable or avoidable incremental costs incurred by the Company for each hour of the month. The hourly incremental cost shall be either the variable operating cost of a Company-owned resource or the cost of a purchase from another utility, whichever is higher. If the situation occurs where the Company is not operating any of its dispatchable resources or purchasing any power in an hour, the Company will use the lowest cost of resources available for purchase from the Pacific Northwest regional nonfirm energy pool for that hour. The rate resulting from averaging all of the hourly rates for the month will be the rate paid for all nonfirm energy for the month. (continued)

Second Revision Sheet 62B First Revision Sheet 62B 62B SCHEDULE 62B - continued (5) Standard Non-Fueled Firm Energy Rates - These rates shall apply depending upon the on-line operation date and term of the agreement when the Customer agrees to supply firm energy deliveries under contract. These rates shall only apply to non-fueled projects, e.g., wind, solar, hydro. These rates shall be fixed for the term of the agreement and shall be paid for all kilowatt-hours produced. The rate resulting from averaging all of the hourly rates for the month will be the rate paid for all non-firm energy for the month. (6) Optional Non-Fueled Firm Energy Rates for Non-Levelized Contracts - These average rates shall apply when the Customer agrees to supply firm energy deliveries in each year as specified under a non-levelized contract. These rates shall only apply to non-fueled projects, e.g., wind, solar, hydro. The rates shall be fixed for each year as shown, and shall be paid for all kilowatt-hours produced. The rate resulting from averaging all of the hourly rates for the month will be the rate paid for all non-firm energy for the month. NET METERING OPTION Net metering shall be available to eligible generators who are customers of Avista Utilities on a first-come, first-served basis until the cumulative generating capacity of net metering systems equals 1.52 MW which is 0.1% (one-tenth of one percent) of the Company s retail peak demand during 1996. Customers electing this option shall be subject to the following terms and conditions. (1) Customer eligibility - To be eligible for the net metering option, a customergenerator must own a facility for the production of electrical energy that: (A) Uses as its fuel either solar, wind, biomass or hydropower, or represents fuel cell technology; (B) Has a generating capacity of not more than twenty-five kilowatts; (C) Is located on the customer-generator s premises; (D) Operates in parallel with the electric utility s transmission and distribution facilities; and (E) Is intended primarily to offset part or all of the customer-generator s requirements for electricity. (continued) Issued August 23, 2000 Effective October 16, 2000

Second Revision Sheet 62C First Revision Sheet 62C 62C SCHEDULE 62C - continued (2) Cost to customer-generator of metering and interconnection Customers electing the net metering option shall be interconnected using a standard kilowatt-hour meter capable of registering the flow of electricity in two directions. The costs to the customer-generator include: (A) The Company s basic charge billed under the customer s applicable standard service Schedules 1, 11, 21, 25, or 31. (B) The Company is not liable for allowing the attachment of a net metering system, or the acts or omissions of a customer-generator, that causes injury, loss or death to a third party. (3) Standards The net metering system used by a customer-generator must include, at the customer's own expense, all equipment necessary to meet applicable safety, power quality, and interconnection requirements established by the National Electrical Code, National Electrical Safety Code, the Institute of Electrical and Electronics Engineers, and Underwriters Laboratories. The Company will measure the net electricity produced or consumed during the billing period, in accordance with normal metering practices. The Company s written approval of the Customer's protection-isolation method to ensure generator disconnection in case of a power interruption from the Company is required before service is provided under this schedule. (4) Balances of generation and usage by the customer-generator: (A) If electricity supplied by the Company exceeds the electricity generated by the customer-generator and fed back to the Company during the billing period, the customer-generator shall be billed for the net electricity supplied by the Company at the customer s standard schedule retail rate, in accordance with normal metering practices. (B) If electricity generated by the customer-generator exceeds the electricity supplied by the Company, the customer-generator: (i) Shall be billed for the appropriate customer charges for that billing period, in accordance with section (2)(A), and (ii) Shall be credited for the excess kilowatt-hours generated during the billing period, with this kilowatt-hour credit appearing on the bill for the following billing periods and used to reduce the bill for the following period from the Company. Issued August 23, 2000 Effective October 16, 2000

d/b/a Avista Utilities First Revision Sheet 62D Original Sheets 62D, E, F, & G 62D SCHEDULE 62D - continued (5) Remaining unused kwh credits - At the beginning of each calendar year, any remaining unused kilowatt-hour credit accumulated during the previous year shall be granted to the Company, without any compensation to the customer-generator. (6) Reversion to previous service - The customer-generator, upon selecting the net metering option, may not revert to the customer-generator s previous metering system without written agreement by the Company.