AN ORDINANCE relating to the City Light Department; authorizing execution of a transaction-specific confirmation of a 7-year agreement with Holy Cross Energy for the purchase of environmental attributes in the form of renewable energy certificates that are necessary or convenient for meeting the requirements of the Washington State Energy Independence Act.

WHEREAS, the Revised Code of Washington ("RCW") Chapter 19.285 (the "Washington State Energy Independence Act") requires City Light to acquire renewable resources and/or environmental attributes, and City Light also purchases environmental attributes for its retail voluntary green power programs pursuant to RCW Chapter 19.29A; and

WHEREAS, Holy Cross Energy has the marketing rights to the environmental attributes of the Raft River Energy I geothermal facility; and

WHEREAS, the Raft River Energy I's environmental attributes meet the requirements of RCW Chapter 19.285; and

WHEREAS, Holy Cross Energy wishes to sell and City Light wishes to purchase such environmental attributes created by the Raft River Energy I geothermal facility; and

WHEREAS, by separate ordinance the City Council has authorized City Light's use of a Master Renewable Energy Certificate Purchase and Sale Agreement; NOW, THEREFORE,

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. The Superintendent of the City Light Department, or his designee, is hereby authorized to execute for and on behalf of The City of Seattle, a transactionspecific 7-year Confirmation Agreement, substantially in the form attached hereto as Exhibit A. The agreement with Holy Cross Energy sets forth the terms under which Holy Cross Energy will deliver environmental attributes in the form of renewable energy certificates ("RECs") to City Light.

Section 2. The Superintendent of the City Light Department, or his designee is hereby further authorized to execute for and on behalf of The City of Seattle additional agreements necessary for use of the Western Renewable Energy Generation Information System or any successor system for tracking and transferring the RECs to City Light and other necessary and convenient agreements to enable City Light to use the RECs purchased hereunder to meet its regulatory requirements.

Section 3. Upon determining the availability of surplus environmental attributes within City Light's portfolio, and in order to minimize the cost to City Light's customers of compliance with the Washington State Energy Independence Act when the Superintendent believes it is cost-effective to acquire RECs in advance of need, the Superintendent, or his designee, is further authorized to execute for and on behalf of The City of Seattle agreements for the sale of all or a portion of the environmental attributes purchased under the Renewable Energy Certificate Purchase and Sale Agreement with Holy Cross Energy, on terms and conditions that the Superintendent deems in the best interests of City Light provided, however, that no such sale shall jeopardize the City Light's compliance with the Washington State Energy Independence Act.

Section 4. This ordinance shall take effect and be in force 30 days from and after its approval by the Mayor, but if not approved and returned by the Mayor within ten days after presentation, it shall take effect as provided by Seattle Municipal Code Section 1.04.020.

Passed by the City Council the ____ day of ________________________, 2010, and signed by me in open session in authentication of its passage this

_____ day of ___________________, 2010.

_________________________________

President __________of the City Council

Approved by me this ____ day of _____________________, 2010.

_________________________________

Michael McGinn, Mayor

Filed by me this ____ day of __________________________, 2010.

____________________________________

City Clerk

(Seal)

Exhibit A: Confirmation Agreement -Renewable Energy Certificates -Raft River Energy I

Robert W. Cromwell Jr./MLS SCL HCE REC Purchase Authorization ORD October 1, 2010 Version #4

RENEWABLE ENERGY CERTIFICATES RAFT RIVER ENERGY I

This Confirmation Agreement ("Confirmation") dated as of ___________________ ("Trade Date") is entered into by and between Holy Cross Electric Association, Inc. dba Holy Cross Energy, a Colorado electric cooperative ("Seller") and The City of Seattle, a Washington municipal corporation, by and through its City Light Department ("Buyer"), each referred to herein individually as a "Party" and collectively as the "Parties".

The following describes a Transaction between Buyer and Seller for the sale, purchase and delivery of Product pursuant to the terms of the Master Renewable Energy Certificate Purchase and Sale Agreement between them dated __________("Master Agreement"). The Master Agreement and this Confirmation, including the Special Terms & Exceptions described in Section 8 below, shall be collectively referred to herein as the "Agreement."

1. Product: Renewable Energy Certificates ("RECs") that include all Environmental Attributes arising as a result of the generation of electricity associated with the REC. The REC is generated from the Unit Specific Renewable Energy Facility that, as of the Trade Date, meets the requirements of the Renewable Portfolio Standard ("RPS") of Washington State, the definition of a Renewable Resource under the Revised Code of Washington ("RCW") 19.285.030 (18) and is eligible for certification under Section II.A.3. of the Green-e Energy National Standard for Renewable Electricity Products, National Standard Version 1.6. Such Product is created by a facility that meets the requirements of a Certified Renewable Energy Facility. Buyer shall have the right to disaggregate, retain or separately sell the RECs or Environmental Attributes purchased under this Agreement.

2. Term: The Term of this Transaction shall commence upon the Effective Date and shall continue through June 30, 2018, in order to complete any Transaction with respect to 2017 RECs; provided that, for avoidance of doubt, Seller shall have no obligation to deliver 2018 RECs, and until all obligations of the Parties under this Agreement have been satisfied, unless an Early Termination Date of this Agreement is established pursuant to Section 5.2 of the Master Agreement.

3.

Unit Specific Certified Renewable Energy Facility Information:

a. Name of Facility: Raft River I

b. Location of Facility: Cassia County, Idaho

c. Facility ID Number: 50147 1 EIA or 0 QF? (check one)

d. Fuel Type: Geothermal Energy

e. Initial Operating Date: October 3, 2007

f. Nameplate Capacity (MW): 18

4. Contract Quantity: Seller agrees to sell and Buyer agrees to buy the Environmental Attributes generated by the Renewable Resource during the Term up to the maximum volume of 87,600 RECs/year.

a. Unit Contingent up to a maximum annual volume of: 87,600

b. Expected Volume (estimated): 65,000

c. Guaranteed Minimum Volume: None

5. Purchase Price:

6. WREGIS Generator Information:

a. Generating Unit Identification Number: W228

b. Generating Unit Name: Raft River Energy I

c. Primary Facility Name: Raft River Energy I

d. Facility Owner Name: Raft River Energy I, LLC

A completed Generator Attestation in the form of Attachment 2 to this Confirmation will be provided as soon as reasonably practicable.

7. Delivery Date: By WREGIS REC electronic tracking and transfer system. Seller shall comply with all laws, including, without limitation, the WREGIS Operating Rules, regarding the certification and transfer of such WREGIS Certificates to Buyer and Buyer shall be given sole title to all such WREGIS Certificates. Within 10 Business Days after receipt by Seller of RECs from WREGIS, Seller shall deliver such RECs to Buyer's WREGIS account ID 217. After such delivery of RECs to Buyer's WREGIS account, Seller shall invoice Buyer for such RECs in accordance with Section 2.3 of the Master Agreement. Each invoice will include a Wholesale Provider Renewable Attestation in the form of Attachment 1 to the Confirmation.Special Terms and Exceptions:

8.1 Marketing and Media Rights

Seller shall provide to Buyer marketing and media rights including the ability to obtain, document and publish project information and photos. Buyer shall not represent that it is the only purchaser of Renewable Energy Credits from the Geothermal Facility.

8.2 Miscellaneous

Where the terms of this Confirmation conflict with the Master Agreement, the Confirmation shall control.

The Parties are subject to all WREGIS Operating Rules dated June 4, 2007, as may be amended, supplemented or replaced (in whole or in part) from time to time.

Verification may be requested by Buyer. If Buyer makes such a request for, or the Certification Authority requires documentation from Buyer that is in the possession of Seller or that Seller may readily attain, Seller shall use reasonable efforts to help Buyer comply with the documentation requirements of the Certification Authority.

8.3 Changes to the Master Agreement

a. Reference Section 2.3 : Seller shall send to Buyer with each invoice a Wholesale Provider Renewable Attestation in the form of Attachment 1 to the Confirmation.

b. Reference Section 2.6 : In regards to WREGIS Transfer Fees, Buyer agrees

to reimburse Seller for half of the transfer fees only (and not any registration fees) incurred by Seller in transferring the Product from Seller's WREGIS account to Buyer's WREGIS account as invoiced to Buyer by Seller. Currently, Seller is charged WREGIS Transfer Fees of $0.005/REC to transfer RECs from one WREGIS account to another WREGIS account.

c. Reference Section 2.7 : The following provision in the last sentence in Section 2.7 of the Master Agreement is not applicable to this Agreement, "[T]o the extent that any Transaction is for Product not yet generated at the time of the Transaction, Seller agrees to make and Buyer agrees to accept actual Delivery of the Product, unless sooner netted out pursuant to opposite purchases and sales between the Parties."

d. Reference Section 3.2: Seller purchases the RECs from Raft River Energy I LLC pursuant to a Renewable Energy Credit Purchase and Sale Agreement entered into on July 29, 2006, as amended December 3, 2008, and Seller's rights and interests in the RECs arise from that agreement as amended. Seller has received an Attestation from Raft River Energy I LLC with respect to the RECs and routinely receives Transfer Certificates.

e. Reference Article 4: Sections 4.2 and 4.3 are not applicable to Seller.

The parties agree to the Transaction set forth herein.

ATTACHMENT 1 TO CONFIRMATION AGREEMENT

Sample Form: WHOLESALE PROVIDER RENEWABLE ATTESTATION

I. Wholesale Provider Information

Name of Wholesale Provider: Holy Cross Electric Association, Inc., dba Holy Cross Energy

Address of Provider: 3799 Highway 82, Glenwood Springs, CO 81601

Contact Person:

Title: Member Services and Marketing Administrator

Telephone: Fax:

E-mail:

II. Declaration

I, (print name and title) _____________________ declare that the (indicate with "x") ___ electricity bundled with renewable attributes/__ x __ renewable attributes only listed below were sold exclusively from: Holy Cross Electric Association, Inc., dba Holy Cross Energy ("Provider"), to Seattle City Light ("Purchaser").

I further declare that:

1) the environmental attributes (including CO2 benefits), including any emissions offsets, reductions or claims, represented by the renewable electricity generation listed below ("RECs") were transferred to Purchaser;

2) to the best of my knowledge, the environmental attributes were not sold, marketed or otherwise claimed by a third party;

3) the environmental attributes were sold only once by Provider to Purchaser, and to the best of my knowledge, the environmental attributes were sold only once by Raft River Energy I LLC ("Generator") to Provider as part of the transactions listed below;

4) the environmental attributes or the electricity that was generated with the attributes was not used to meet any federal, state or local renewable energy requirement, renewable energy procurement, renewable portfolio standard, or other renewable energy mandate by Provider, nor, to the best of my knowledge, by Generator or by any other entity;

5) the electrical energy that was generated with the attributes was not separately sold, separately marketed or otherwise separately represented as renewable energy by Provider, or, to the best of my knowledge, by Generator or any other entity.

List the renewable MWhs sold and transferred to Purchaser identified below by period of generation as a separate line item.

As an authorized agent of Provider, I attest that the above statements are true and correct.

______________________________ _________________________

Signature Date

______________________________

Place of Execution

The information on this form is held strictly confidential

and will not be shared with any other party except in aggregate form.

ATTACHMENT 2 TO CONFIRMATION AGREEMENT

ATTESTATION FROM GENERATOR PARTICIPATING IN WREGIS

This Attachment 2 governs generation at the Facility during the Term. Any changes shall be provided to Seller as soon as reasonably practicable by providing a revised Attachment 2.

1. Renewable Energy Facility Owner Information

a. Name of Owner: Raft River Energy I LLC

b. Address of Owner: 1505 Tyrell Lane, Boise, ID 83706

c. Contact person: Title: CFO, U.S. Geothermal Inc.

d. Telephone: Fax:

e. Email:

2. Renewable Energy Facility and WREGIS Registration Information

a. Name of Facility: The Raft River Unit 1 Geothermal Power Plant

b. Location/Address of Facility: 15 miles southeast of Malta, ID; Section 23; Township 15: Range 26 East; Cassia County, ID

c. Facility ID Number: Entity 50147, Plant 56317 1 EIA or 0 QF? (check one)

d. Fuel Type: Geothermal

e. Initial Operating Date: 10/03/2007

f. Nameplate Capacity (MW): 18

3. WREGIS Information

a. Generating Unit Identification Number: W228

b. Generating Unit Name: Raft River Energy I LLC

c. Primary Facility Name: Raft River Energy I

4. Other

a. Is the Facility owner reporting its direct greenhouse gas emissions in a legally binding cap and trade program for the time period of generation listed on this form?

0 Yes; list the cap and trade program: _________________________

1 No

b. If Seller is providing only RECs to Purchaser and selling the associated electricity to a utility or loadserving entity, please write the name of the utility or load-serving entity here: Idaho Power Company

c. If Facility has been registered in a Tracking System by an entity other than Owner, complete items 1 -3 immediately below and have an agent of the company or individual designated in WREGIS to manage Facility's account in WREGIS complete and sign this form. For the purposes of this form, such a company or individual is referred to as an "Account Manager".

(i) Name of Account Manager as appears in WREGIS:

(ii) Date that account management rights assigned to Account Manager expire:

(iii) 0 Account Manager has attached documentation accepted by WREGIS authorizing Account Manager to register Facility in Tracking System.

5. Declaration

I, (print name and title) _______, CFO ("Signatory"), authorized agent of 1 Owner / 0 Account Manager (check one) declare that I have sufficient knowledge and authority to make the following attestation for the Effective Period of this document. I also declare the following regarding Facility's participation in WREGIS and regarding Renewable Attributes (also called "Certificates", "Renewable Energy Certificates" or "RECs") generating by Facility and tracked in Tracking System:

a. all renewable and environmental attributes associated with the production of electricity from Facility, including any and all CO2 benefits, emissions offsets, reductions or claims, are transferred to purchasers within the WREGIS Tracking System;

b. for Transactions made within WREGIS only fully aggregated Environmental Attributes are traded:

c. the Environmental Attributes of a particular MWh are sold by the Owner only once;

d. to the best of my knowledge, the Environmental Attributes or the electricity that is generated with the Environmental Attributes are not used to meet any federal, state or local renewable energy requirement, renewable energy procurement, renewable portfolio standard, or other renewable energy mandate by any entity other than the party to whom the Environmental Attributes are sold by the Owner;

e. the electricity that was generated with the attributes is not separately sold, separately marketed or otherwise separately represented as renewable energy attributable to Facility by Seller, or, to the best of my knowledge, any other entity other than the Buyer(s) of the RECs.

6. Signature

As an authorized agent of Owner or Account Manager, Signatory declares that they have the knowledge and authority to attest that the statements on this form are true and correct. By signing this form, Signatory is attesting that the statements and declarations herein will remain true for the Effective Period.

If any conditions change related to the information on this form prior to Expiration Date, Signatory agrees to inform Buyer in writing as far in advance of the change as commercially practicable.

____________________________________________

Signature Date

Chief Financial Officer

Title

U.S. Geothermal Inc.

Organization

1505 Tyrell Lane, Boise, ID 83706

Place of Execution

Only fill in this section if Owner and Account manager have signed the appropriate bi-lateral form required by WREGIS to designate Account Manager as the sole manager of Facility's Tracking System account and sole recipient of Facility's Environmental Attributes. If there is no Account Manager, and Owner manages Facility's account, this section should be left blank, and Owner must complete this attestation.

.

Robert W. Cromwell, Jr./MLS SCL HCE REC Purchase Authorization Ord EXH A October 1, 2010 Version #3