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HomeMy WebLinkAbout20060628_1605.pdfDECISION MEMORANDUM TO:COMMISSIONER KJELLANDER CO MMISSI 0 NER SMITH COMMISSIONER HANSEN COMMISSION SECRETARY COMMISSION STAFF LEGAL FROM:CECELIA A. GASSNER DATE:JUNE 19, 2006 SUBJECT:IN THE MA TTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR APPROVAL OF A FIRM ENERGY SALES AGREEMENT WITH CASSIA WIND FARM, LLC, CASE NO. IPC-06- On April 20 , 2006, Idaho Power Company ("Idaho Power" or "Company ) filed an Application requesting approval of a Firm Energy Sales Agreement dated April 7, 2006 with Cassia Wind Farm, LLC ("Cassia Wind"). Under the Agreement, Cassia Wind would sell and Idaho Power would purchase electric energy generated by Cassia Wind's wind generating facility near Hagerman, Idaho. The Company asks the Commission to approve the Agreement and declare that all payments for purchases of energy under the Agreement be allowed as prudently incurred expenses for ratemaking purposes. On June 2 , 2006, the Commission issued a Notice of Application and Modified Procedure requesting any comments to the matter. See Order No. 30060. No comments were received other than those filed by Staff. THE AGREEMENT According to the Application, Cassia Wind proposes to design, construct, install, own operate and maintain a 10.5 MW wind generating facility near Hagerman, Idaho (the "Facility The Facility will be a qualified small power production facility under the applicable provisions of the Public Utility Regulatory Policies Act of 1978 ("PURP A" Under the terms of the Agreement, Cassia Wind has elected to enter into the Agreement with Idaho Power for a 20-year term. Cassia Wind further elected to contract with the Company using the non-Ievelized published avoided cost rates as currently established by the Commission for energy deliveries of less than 10 aMW. All applicable interconnection charges DECISION MEMORANDUM and monthly operation and maintenance charges under Schedule 72 will be assessed to Cassia Wind. Cassia Wind has elected August 31 , 2006 as the scheduled first energy date and December 31 , 2006 as the scheduled operation date for the Facility. Certain requirements have been placed on Cassia Wind for Idaho Power to accept energy deliveries from the Facility. Idaho Power will monitor compliance with these initial requirements, as well as ongoing requirements throughout the term of the Agreement. ST AFF COMMENTS Based on its review, Staff believes that the Agreement between Cassia Wind and Idaho Power comports with the terms and conditions of Commission Order No. 29632 (Us. Geothermal et al v. Idaho Power) and avoided cost Order No. 29646. Staff recommends approval ofthe Agreement with an effective date of April 7, 2006. COMMISSION DECISION Does the Commission desire to approve the Firm Energy Sales Agreement between Idaho Power Company and Cassia Wind Farm, LLC? Ceceha A. Gassner M:IPC-O6-cg2 DECISION MEMORANDUM