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Home My WebLink About20050908PAC response to staff requests 1-10.pdf~;FJ Ex) 825 E. Multnomah St. Portland OR 97232 PACIFIC POWER UTAH POWER ~, - "' ' In. ~"f' ';q \u- .,1""' \Yl\b Sff - tJ t'.,' , , in t ;~. s (ci~\~(sS\Qii ' " \ . PACIFICORP September 7, 2005 Kira Dale Pfisterer Deputy Attorney General Idaho Public Utilities Commission 472 W. Washington Boise, ID 83720-0074 RE:ID P AC-05- IPUC Staff Production Data Requests (1-10) Please find enclosed an original and one copy ofPacifiCorp s Response to IPUC Staff Production Data Requests 1-10. Provided on the enclosed CD are Attachments 1 (a-b), 6 and 7. Please note that Data Responses 3-7 were prepared solely by Schwendiman Wind LLC with no input from PacifiCorp. Attachments to Responses 3 , 4, and 5 contain information confidential to Schwendiman Wind and must be examined in accordance with the protective agreement in this docket. If you have any questions, please call Barry Bell at (801) 220-4985. Sincerely, ' / .L.-0 L/ ~ . /l4rb~~t:Z // Bob Lively, Matpiger Regulation Enclosures cc:Lisa Nordstrom Dean Brockbank P AC-05-9/PacifiCorp September 7 2005 IPUC Staff Production Data Request IPUC Staff Production Data Request (a) Please provide evidence that Schwendiman submitted a signed power purchase agreement to PacifiCorp on June 26, 2005 as alleged in the Application, Exhibit , and page 2 of 3 , section 1. (b) Please state why PacifiCorp was not willing to sign the document at the time it was submitted by Schwendiman on June 26 2005. ( c) Please identify and describe those points that were revised and finalized during further negotiations in July to reach a negotiated final contract agreement agreeable to both parties. Response to IPUC Staff Production Data Request (a) PacifiCorp received a cover letter and incomplete draft power purchase agreement signed by Schwendiman Wind LLC ("Schwendiman ) on June 27 2005 (the "June 27 Draft") from Schwendiman via overnight courier on June 28 2005. A copy is provided as Attachment IPUC 1 a on the enclosed CD. (b) PacifiCorp and Schwendiman were still negotiating material aspects of a power purchase agreement when Schwendiman tendered the June 27 Draft. PacifiCorp had asked Schwendiman on Wednesday, June 22, to not tender the draft because material terms remained at issue. The June 22 Draft was incomplete for several reasons, including the following: (1) (2) (3) (4) (5) Lack of agreement on damage provisions Lack of agreement on liquidated damage calculations Schwendiman s ability to perform per the milestones Missing Engineer s Certification Missing QF Certification On June 30, 2005 PacifiCorp responded to Schwendiman s tender with a letter signed by PacifiCorp attorney Dean Brockbank. This letter is provided as Attachment IPUC 1 b on the enclosed CD. This letter identifies several areas in the PP A that had not been finalized and identifies the above issues. It also requested documentation to support Schwendiman' s claim that it had "turbines on the way." Since PacifiCorp had heard wide-spread discussions in the marketplace about a lack of wind turbines in the industry, PacifiCorp was dubious of Schwendiman s ability to meet the November 1 2005 Scheduled Commercial Operations Date proposed in Section 2.6 of the June 27 Draft. (c) All of the issues, above, were resolved to the satisfaction of both parties by Mid-July, and PacifiCorp executed a power purchase agreement on July 19 2005 Final PP A" ). Schwendiman subsequently executed the Final PP A on August 5 2005. PacifiCorp s concerns regarding damage provisions were resolved by adding a provision in the Final PP A for payment of liquidated damages in the event of delayed online date to Section 2.3, and by extending the recovery term in P AC-05-9/PacifiCorp September 7, 2005 IPUC Staff Production Data Request the event of a Seller default from six months to twelve months (see Section 10.4). PacifiCorp s concerns over the amount of liquidated damages were resolved by adding transmission costs and administrative costs to the definition of Net Replacement Power Costs, in Section 10.4. In the Final PP A, Schwendiman requested that the Scheduled Commercial Online Date be postponed to July 15 2006, thereby alleviating PacifiCorp s doubts about timely completion. These changes significantly reduced the risk of damages to PacifiCorp and its customers resulting from default, compared to the July 27 PP A tendered by Schwendiman. The remaining issues were resolved when Schwendiman provided the missing information PacifiCorp requires before execution of any power purchase agreement. Schwendiman amended its self-certification of the project as a QF on July 14, 2005 to reflect the recent changes in the project's configuration. August 5 , it submitted a certification from a licensed Civil Engineer endorsing the energy and capacity projections set forth in Schwendiman s Motive Force Plan. See Final PPA Exhibits F-l and F- Since June 27, 2005 Schwendiman also changed its specified wind turbine manufacturer and the configuration of its wind farm. PacifiCorp questioned Schwendiman s first reconfiguration as too large to qualify for published avoided cost prices, but ultimately agreed to the configuration described in Exhibit A. This change resulted in several changes to the PP A and associated Exhibits. (Bruce W. Griswold will sponsor this response at hearing. His business telephone number is 503-813-5218. IDAHO P A C- E-O5- PPA FOR THE SALE AND PURCHASE OF ENERGY SCHWENDIMAN WIND ACIFICORP IPUC STAFF PRODUCTION DATA REQUEST ATTACHMENT IPUC 1 (a- ON THE ENCLOSED CD P AC-05-9/PacifiCorp September 7, 2005 IPUC Staff Production Data Request 2 IPUC Staff Production Data Request 2 Please provide PacifiCorp s judgment as to whether the grandfathering criteria as spelled out in Order No. 29839 have been satisfied. Response to IPUC Staff Production Data Request 2 Schwendiman has completed an Application for Interconnection Study and payment of the associated fee. Aside from the request for the Interconnection Study, PacifiCorp has not formulated an opinion on this issue and believes the Commission is best able to assess if its grandfathering criteria has been meet. (Bruce W. Griswold will sponsor this response at hearing. His business telephone number is 503-813-5218. P AC-05-9/PacifiCorp September 7, 2005 IPUC Staff Production Data Request 3 IPUC Staff Production Data Request 3 Please provide a copy of the wind study referenced in the Application, Exhibit A and page 2 of 3 , section Response to IPUC Staff Production Data Request 3 The requested information is provided as Confidential Attachment IPUC 3. This information was prepared by Schwendiman Wind LLC with no input from PacifiCorp and contains information confidential to Schwendiman Wind. It is provided subject to the terms and conditions of the protective agreement in this proceeding. (Schwendiman Wind will sponsor this response at hearing. IDAHO P AC-O5- PP A FOR THE SALE AND PURCHASE OF ENERGY SCHWENDIMAN WIND ACIFICORP IPUC STAFF PRODUCTION DATA REQUEST CONFIDENTIAL ATTACHMENT IPUC CONFIDENTIAL (LEVEL YELLOW) P AC-05-9/PacifiCorp September 7, 2005 IPUC Staff Production Data Request 4 IPUC Staff Production Data Request 4 Please provide a copy of the Turbine Purchase Order as referenced in the Application, Exhibit A, and page 2 of 3 , section 2. Response to IPUC Staff Production Data Request 4 The requested information is provided as Confidential Attachment IPUC 4. This information was prepared by Schwendiman Wind LLC with no input from PacifiCorp and contains information confidential to Schwendiman Wind. It is provided subject to the terms and conditions of the protective agreement in this proceeding. (Schwendiman Wind will sponsor this response at hearing. IDAHO P AC-O5- PP A FOR THE SALE AND PURCHASE OF ENERGY SCHWENDIMAN WIND ACIFICORP IPUC STAFF PRODUCTION DATA REQUEST CONFIDENTIAL ATTACHMENT IPUC 4 CONFIDENTIAL (LEVEL YELLOW) P AC-05-9/PacifiCorp September 7, 2005 IPUC Staff Production Data Request 5 IPUC Staff Production Data Request 5 Please provide evidence that financing has been arranged for the project. Response to IPUC Staff Production Data Request 5 The requested information is provided as Confidential Attachment IPUC 5. This information was prepared by Schwendiman Wind LLC with no input from PacifiCorp and contains information confidential to Schwendiman Wind. It is provided subject to the terms and conditions of the protective agreement in this proceeding. (Schwendiman Wind will sponsor this response at hearing. IDAHO P AC-O5- PPA FOR THE SALE AND PURCHASE OF ENERGY SCHWENDIMAN WIND ACIFICORP IPUC STAFF PRODUCTION DATA REQUEST CONFIDENTIAL ATTACHMENT IPUC CONFIDENTIAL (LEVEL YELLOW) P AC-05-9/PacifiCorp September 7 , 2005 IPUC Staff Production Data Request 6 IPUC Staff Production Data Request 6 Please provide a copy of the conditional use permit approved by the Bonneville County Planning and Zoning Commission as referenced in the Application Exhibit A, and page 2 of 3 , section 3. Response to IPUC Staff Production Data Request 6 The requested information is provided as Attachment IPUC 6 on the enclosed CD. This information was prepared by Schwendiman Wind LLC with no input from PacifiCorp (Schwendiman Wind will sponsor this response at hearing. IDAHO P A C- E-O5- PPA FOR THE SALE AND PURCHASE OF ENERGY SCHWENDIMAN WIND ACIFICORP IPUC STAFF PRODUCTION DATA REQUEST ATTACHMENT IPUC ON THE ENCLOSED CD P AC-05-9/PacifiCorp September 7, 2005 IPUC Staff Production Data Request 7 IPUC Staff Production Data Request 7 Please provide a copy of the FERC self-certification filing made by Schwendiman in accordance with 18 CFR 292.207. Response to IPUC Staff Production Data Request 7 The requested information is provided as Attachment IPUC 7 on the enclosed CD. This information was prepared by Schwendiman Wind LLC with no input from PacifiCorp (Schwendiman Wind will sponsor this response at hearing. IDAHO A C- E-O5- PP A FOR THE SALE AND PURCHASE OF ENERGY SCHWENDIMAN WIND ACIFICORP IPUC STAFF PRODUCTION DATA REQUEST ATTACHMENT IPUC ON THE ENCLOSED CD P AC-05-9/PacifiCorp September 7, 2005 IPUC Staff Production Data Request 8 IPUC Staff Production Data Request 8 Please explain why the 90/110% banding provisions as required by Order No. 29632 have not been included in the Agreement. Response to IPUC Staff Production Data Request 8 PacifiCorp and Schwendiman s review of Order 29632 was that the 90/110% banding provision was allowed by the Commission in the US Geothermal case but not required by the Commission in all future contracts. The parties mutually agreed to use a different approach to the bandwidth methodology by using mechanical availability guarantee (MAG). The parties believe that the MAG will benefit both parties where more realistic and accurate estimates of wind generation will be provided to PacifiCorp on an annual basis compared to potential underestimating production that could occur with the 90/1100/0 banding provision. The MAG will lessen the administrative and accounting burdens as compared to the 90/110% banding provision for both parties and for future QFs. (Bruce W. Griswold will sponsor this response at hearing. His business telephone number is 503-813-5218. P AC-05-9/PacifiCorp September 7 2005 IPUC Staff Production Data Request 9 IPUC Staff Production Data Request 9 Please explain whether the Index Price as defined in the Application, Section 1. is the Mid-C index, the Palo Verde index or some type of average of the two. Response to IPUC Staff Production Data Request 9 The Index Price is the average of the two. The Index Price is defined in Section 1.20 as both the Mid-C index and the Palo Verde index. In Section 1.37 Replacement Price is defined as the annual average of the Index Price. In Section 2.3 Delay Price is defined as the average of the Index Price. (Bruce W. Griswold will sponsor this response at hearing. His business telephone number is 503-813-5218. P AC-05-9/PacifiCorp September 7, 2005 IPUC Staff Production Data Request 10 IPUC Staff Production Data Request As stated in the Application, Recital E on page 1 , this Agreement will be categorized as a "New QF" under the terms of the PacifiCorp Inter-Jurisdictional Cost Allocation Revised Protocol (RP). The RP states that the costs of "arty NEW QF contract which exceed the costs PaciflCorp would have otherwise incurred acquiring a comparable resource will be assigned on a situs basis to the State approving such contract" (emphasis added). Costs not in excess of a comparable resource " will be system assigned. Note that the RP defines a comparable resource" to mean "resources with similar capacity factors, start-up costs, and other output and operating characteristics." Please indicate whether PacifiCorp believes this Agreement will result in costs in excess of what PacifiCorp would otherwise incur acquiring a "comparable resource." If so please define the "comparable resource" and estimate what PacifiCorp believes the situs assigned costs (if any) will be. Response to IPUC Staff Production Data Request The Company does not know at this time if this Agreement will result in costs that exceed the costs incurred acquiring a comparable resource. The Commission will make a determination on this issue, if necessary, when the Schwendiman Agreement is presented to the Commission in a future rate case as a part of its net power costs. (Bruce W. Griswold will sponsor this response at hearing. His business telephone number is 503-813-5218.