20101109_3146.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

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

FROM: KRISTINE SASSER
DEPUTY ATTORNEY GENERAL

DATE: NOVEMBER 4, 2010

SUBJECT: IDAHO POWER’S APPLICATION FOR APPROVAL OF A FIRM
ENERGY SALES AGREEMENT WITH AGPOWER, CASE NO. IPC-E-
10-26

On October 20, 2010, Idaho Power Company filed an Application with the
Commission requesting approval of a 20-year Firm Energy Sales Agreement (the “Agreement”)
between Idaho Power and AgPower Jerome, LLC (AgPower) dated October 13, 2010. The
Application states that AgPower would sell and Idaho Power would purchase electric energy
generated by the Double A Digester Project (the “Facility”) located in Lincoln County, Idaho.
THE AGREEMENT
The Agreement is for a term of 20 years and contains the non-levelized published
avoided cost rates established by the Commission in Order No. 30744 for energy deliveries of
less than 10 average megawatts (“aMW”). The nameplate rating of the Facility will be 1.6 MW.
Idaho Power warrants that the Agreement comports with the terms and conditions of the various
Commission Orders applicable to PURPA agreements (Order Nos. 30415, 30488, 30738, and
30744). Application at 2.
Although the Agreement is dated October 13, 2010, Idaho Power submits that
AgPower should be entitled to the avoided cost rates set out in Order No. 30744 (rates
superseded on March 16, 2010, by Order No. 31025). Idaho Power asserts that, but for the
disagreement as to the damage and security provisions, the Agreement would have been signed
by both parties prior to March 16, 2010. The Agreement, as submitted, contains the most recent
terms and conditions, including liquidated damages and security provisions. As such, Idaho
DECISION MEMORANDUM 2
Power maintains that this Agreement is similarly situated to other power purchase agreements
approved by this Commission that contain grandfathered avoided cost rates.
Idaho Power asserts that AgPower is current in all of its interconnection study
payments. AgPower selected a Scheduled Operation Date of January 1, 2012, for its Facility.
By its own terms, the Agreement will not become effective until the Commission has approved
all of the Agreement’s terms and conditions and declares that all payments made by Idaho Power
to AgPower for purchases of energy will be allowed as prudently incurred expenses for
ratemaking purposes. Agreement ¶ 21.1.
Idaho Power requests that its Application be processed by Modified Procedure
pursuant to Commission Rules of Procedure 201-204. IDAPA 31.01.01.201-.204.
STAFF RECOMMENDATION
Staff recommends that the case be processed by Modified Procedure with comments
due no later than December 8, 2010.
COMMISSION DECISION
Does the Commission wish to process this case under Modified Procedure with
comments due no later than December 8, 2010?

M:IPC-E-10-26_ks