20090803_2656.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL

DATE: JULY 29, 2009

SUBJECT: CASE NO. IPC-E-09-18 (Idaho Power)
FIRM ENERGY SALES AGREEMENT – IDAHO POWER/CAMP REED
WIND PARK LLC

On July 17, 2009, Idaho Power Company (Idaho Power; Company) filed an Application
with the Idaho Public Utilities Commission (Commission) requesting approval of a 20-year Firm
Energy Sales Agreement between Idaho Power and Camp Reed Wind Park LLC (Camp Reed) dated
July 9, 2009 (Agreement).
AGREEMENT
Camp Reed proposes to design, construct, install, own, operate and maintain a 22.5
megawatts (MW) wind generating facility. The Camp Reed facility will be located near Hagerman,
Idaho. Camp Reed warrants the facility will be a qualified small power production facility (QF)
under the applicable provisions of the Public Utility Regulatory Policies Act of 1978 (PURPA).
Agreement ¶ 3.2.
The Application states that the Agreement comports with the terms and conditions of the
various Commission Orders applicable to PURPA agreements for wind resources. Order Nos. 30415
(daily load shape adjustment), 30488 (wind integration adjustment; Mechanical Available
Guarantee), 30738 (SAR non-fuel cost variables), and 30744 (published avoided cost rates). The
Agreement contains levelized published avoided cost rates as currently established by the
Commission for energy deliveries of less than 10 aMW. Agreement Article VII. The Agreement
includes the various security requirements required by the Commission for levelized agreements (i.e.,
DECISION MEMORANDUM 2
debt service reserve account (¶ 19.3.2), maintenance reserve account (¶ 4.19), second lien
requirements (¶ 4.1.10), and an expanded list of required insurances (¶ 13.2)).
The nameplate rating of the facility is 22.5 MW. Under normal and/or average conditions,
the facility will not exceed 10 aMW on a monthly basis. Should the facility exceed 10 aMW on a
monthly basis, Idaho Power will accept the energy (Inadvertent Energy) that does not exceed the
maximum capacity amount; however the Company will not purchase or pay for this Inadvertent
Energy. ¶ 7.5. Camp Reed has selected September 30, 2010, as both the scheduled First Energy
Date and the Scheduled Operation Date. Appendix B-3.
As reflected in the Application, this is one of the first PURPA wind agreements executed
since the issuance of Commission Order No. 30488, which requires the inclusion of the Mechanical
Availability Guarantee (MAG) (¶ 6.4), wind integration cost reduction (¶ 7.1), and wind forecasting
cost sharing (Appendix E). In addition, the Agreement contains provisions for delay liquidated
damages (¶ 5.3) and associated delay security (¶ 5.7) to secure the established scheduled operation
date of September 30, 2010.
Agreement ¶ 21 provides that the Agreement will not become effective until the
Commission has approved all of the Agreement’s terms and conditions and declares that all payments
Idaho Power makes to Camp Reed for purchases of energy will be allowed as prudently incurred
expenses for ratemaking purposes.
Idaho Power requests that its Application be processed pursuant to Modified Procedure,
i.e., by written submission rather than by hearing. IDAPA 31.01.01.201-204.
COMMISSION DECISION
Commission Staff recommends that the Application in Case No. IPC-E-09-18 be
processed pursuant to Modified Procedure, i.e., by written submission rather than by hearing.
Reference IDAPA 31.01.01.201-204. Does the Commission agree with the recommended procedure?

Scott Woodbury
Deputy Attorney General

bls/M:IPC-E-09-18_sw