961119.docx

DECISION MEMORANDUM
TO:COMMISSIONER NELSON
COMMISSIONER SMITH
COMMISSIONER HANSEN
MYRNA WALTERS
TONYA CLARK
DON HOWELL
STEPHANIE MILLER
DAVE SCHUNKE
GARY RICHARDSON
KEITH HESSING
WORKING FILE
FROM:SCOTT WOODBURY
DATE:November 19, 1996
RE:CASE NO.  IPC-E-96-23
AMENDMENT TO ELECTRIC SERVICE AGREEMENT FOR MICRON
On November 14, 1996 Idaho Power Company (Idaho Power; Company) and Micron Technology, Inc. (Micron) filed a joint Application with the Idaho Public Utilities Commission (Commission) requesting approval of an amendment (attached) to an underlying August 31, 1995 agreement for electric service between Micron and Idaho Power (Agreement).
The underlying Agreement between Idaho Power and Micron was approved by the Commission in Case No.  IPC-E-95-14, Order No.  26238.  Under the Agreement, Idaho Power agrees to furnish Micron’s total requirements for electric power and energy.  As reflected in the Commission’s Order No.  26238, the Schedule 26-Micron tariff included an immediate increase in scheduled monthly contract demand to 50 MW from the previous 40 MW.  It further provided for increases in 10 MW increments while Micron expanded its load to a monthly contract demand of 100 MW by January 1997.  (Agreement ¶¶ 6.1, 6.1.1)  Under the terms of the Agreement, Micron was permitted to increase its contract demand in increments of 10 MW up to a total contract demand of 140 MW or could similarly decrease its contract demand to zero.  (Agreement ¶ 6.2.1)
The underlying Agreement contained a scheduled ramp up of contract capacity up to the 100 MW level along with contract demand charges and minimum monthly bill provisions.  As set forth in the Application, it has now become apparent that due to a slow down in the semi-conductor market, Micron’s need for power will not grow at the rate originally anticipated.  Micron approached Idaho Power concerning the need for minimum monthly billing demand relief.  Under current conditions the contract demand and minimum monthly billing demand exceed Micron’s actual billing demand by over 35%, and this will soon increase to over 50%.  Micron desires to retain the ability to expand to 100 MW but views the ramp up of the minimum monthly billing demand as excessive.
After negotiations Idaho Power and Micron have agreed to lower the minimum monthly billing demand to 25 MW (Agreement ¶¶ 6.1.2, 6.2.2) and to increase the monthly billing demand charge by $0.43 per kW per month, i.e. to $6.25 per kW.  See revised tariff Schedule 26-Micron.  (Attached)  Other administrative changes have also been made to the Agreement (amendment to ¶ 6.2 Contract Demand Provision After Initial Expansion, ¶ 7.2 Operation and Maintenance and ¶ 7.3 Reactive Compensation), including a new Section 16 Right of First Refusal in the event of deregulation.  The parties have further agreed that all of the changes and amendments to the Agreement and revised tariff Schedule 26 will be effective as of September 1, 1996.
The applicants request that the Application be processed under Modified Procedure, IDAPA 31.01.01.201-.204.  Staff has yet to complete its analysis.  Staff has no objection to Modified Procedure.
Commission Decision
The Applicants have requested that the Application be processed pursuant to Modified Procedure.  Does the Commission agree that Modified Procedure is appropriate?  If not, what is the Commission’s preference?
Scott Woodbury
cm\M:ipce9623.sw