HomeMy WebLinkAbout20110104_3201.pdfDECISION MEMORANDUM 1
DECISION MEMORANDUM
TO: COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
FROM: KRISTINE SASSER
DEPUTY ATTORNEY GENERAL
DATE: DECEMBER 28, 2010
SUBJECT: IDAHO POWER’S APPLICATION FOR APPROVAL OF A FIRM
ENERGY SALES AGREEMENT WITH HAZELTON, CASE NO. IPC-E-
10-45
On December 10, 2010, Idaho Power Company filed an Application with the
Commission requesting approval of a 15-year Firm Energy Sales Agreement (Agreement)
between Idaho Power and SE Hazelton A, L.P. (Hazelton) dated December 8, 2010. The
Application states that Hazelton would sell and Idaho Power would purchase electric energy
generated by the Hazelton A Hydroelectric Project (Facility) located near Jerome, Idaho.
THE AGREEMENT
The Application states that Hazelton has, in compliance with an existing agreement
approved by the Commission in February 1989 (Order No. 22326), designed, constructed,
installed, owns, operates and maintains an 8.1 MW hydroelectric generating facility.1 The
present Agreement has been negotiated to replace the existing agreement which expires on
December 31, 2010. Idaho Power warrants that the Agreement comports with the terms and
conditions of the various Commission Orders applicable to PURPA agreements (Order Nos.
30415 and 31025).
The Application states that the Agreement contains the current non-levelized
published avoided cost rates established by the Commission in Order No. 31025 for energy
deliveries of less than 10 average megawatts (“aMW”). The nameplate rating of the Facility is
8.1 MW. Hazelton has elected January 1, 2011, as its First Energy Date and Scheduled
Operation Date. Since this Facility is already interconnected and operating under its existing
1 Hazelton is an irrigation canal hydroelectric facility that only generates power during the irrigation season.
DECISION MEMORANDUM 2
agreement, the processing to attain the First Energy and Scheduled Operation Date under this
Agreement will include review and either acceptance or updating of previously provided
documentation as well as any new requirements as specified by this Agreement. Application at
4. The Application states that, should the Commission approve the Agreement, Idaho Power
intends the effective date of the Agreement to be January 1, 2011.
Idaho Power maintains that the Facility is in compliance with the utility’s current
tariff Schedule 72 and interconnection and transmission processes. Even though the Facility will
continue to utilize its existing interconnection and transmission facilities and capacity, Idaho
Power will require completion of a Generator Interconnection Agreement (GIA) and
Transmission Service Requests (TSR) in order to bring the Facility up-to-date with Idaho
Power’s current tariffs and processes. Hazelton and Idaho Power have agreed to liquidated
damages and security provisions of $45 per kW of nameplate capacity. Agreement, ¶¶ 5.3.2,
5.8.1.
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 Hazelton 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.
COMMISSION DECISION
Does the Commission wish to process this case under Modified Procedure?
M:IPC-E-10-45_ks