25919.docx

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR AN ORDER APPROVING THE TERMINATION OF THE FIRM ENERGY SALES AGREEMENT WITH B & S, INC.
(EAST FORK DITCH HYDRO PROJECT)
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CASE NO. IPC-E-95-1
ORDER NO.  25919
On February 16, 1995, Idaho Power Company (Idaho Power; Company) filed an Application with the Idaho Public Utilities Commission (Commission) requesting approval of a consensual termination of a Firm Energy Sales Agreement (Agreement) dated July 27, 1992 between the Company and B&S, Inc.  The underlying 35-year Agreement was approved by the Commission on September 29, 1992 in Order No. 24519, Case No. IPC-E-92-19.  
As proposed in the underlying Agreement, B&S, Inc. was to develop the East Fork Ditch Hydro Project, a 2.5 megawatt facility to be located adjacent to the canal system of East Fork Ditch Company in the southwest quarter of Section 31, Township 17 North, Range 1 East, Boise Meridian, Adams County, Idaho.  The estimated annual energy production was to be 11,542,568 kilowatt hours.  The scheduled operation date was March 1, 1994.  
On February 3, 1995, B&S, Inc., by letter to Idaho Power, advised the Company that “it is not possible for us to develop, build and operate the East Fork Ditch Hydroelectric Power facility . . . business arrangements among various persons and firms necessary to the successful pursuit of the project have broken down irrevocably.  Last minute attempts to structure a rescue of the project have also failed.”  B&S, Inc. requested contract termination and a settlement of accounts.  
As represented, B&S, Inc. and Idaho Power have agreed on the methodology which will be used to calculate and return any unspent portion of the $129,758 previously paid by B&S, Inc. to interconnect the facility to Idaho Power’s system.  Prior to disbursing any monies to B&S, Inc., Idaho Power states that it will obtain appropriate releases.  
Idaho Power requests that the Commission issue an order finding the termination to be reasonable, finding Idaho Power’s related costs (if any) to be prudently incurred expenses for ratemaking purposes, and approving the termination of the underlying Agreement.
Commission Findings
The Commission has reviewed and considered the filings of record in Case No. IPC-E-95-1 and its Order approving the underlying Agreement.  Based on the facts presented, as set forth in the Application, the Commission finds it reasonable to approve the proposed termination of the East Fork Ditch Hydro Project Firm Energy Sales Agreement.  We find the proposed conditions of termination as detailed in the Application and the February 3, 1995 letter from B & S, Inc. to Idaho Power to be reasonable.  We further find Idaho Power’s related costs (if any) to be prudently incurred expenses for ratemaking purposes.
CONCLUSIONS OF LAW
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The Idaho Public Utilities Commission has jurisdiction over Idaho Power Company, an electric utility, pursuant to the authority and power granted it under Title 61 of the Idaho Code and the Public Utility Regulatory Policies Act of 1978 (PURPA).  
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The Idaho Public Utilities Commission has authority under PURPA and the implementing regulations of the Federal Energy Regulatory Commission (FERC) to set avoided costs, to order electric utilities to enter into fixed term obligations for the purchase of energy from small power producers, and to implement FERC rules.
O R D E R
In consideration of the foregoing and as so qualified, IT IS HEREBY ORDERED AND THE COMMISSION HEREBY APPROVES termination of the Firm Energy Sales Agreement between Idaho Power Company and B & S, Inc., said Agreement being previously approved by the Commission on September 29, 1992 in Order No. 24519, in Case No. IPC-E-92-19.
THIS IS A FINAL ORDER.  Any person interested in this Order (or in issues finally decided by this Order) may petition for reconsideration within twenty-one (21) days of the service date of this Order.  Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration.  See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this                  day of  March 1995.

MARSHA H. SMITH, PRESIDENT

RALPH NELSON, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER
ATTEST:

Myrna J. Walters
Commission Secretary
vld/O-IPC-E-95-1.sw