20060628_1605.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:CECELIA A. GASSNER
DATE:JUNE 19, 2006
SUBJECT:IN THE MA TTER OF THE APPLICATION OF IDAHO POWER
COMPANY FOR APPROVAL OF A FIRM ENERGY SALES
AGREEMENT WITH CASSIA WIND FARM, LLC, CASE NO. IPC-06-
On April 20 , 2006, Idaho Power Company ("Idaho Power" or "Company ) filed an
Application requesting approval of a Firm Energy Sales Agreement dated April 7, 2006 with
Cassia Wind Farm, LLC ("Cassia Wind"). Under the Agreement, Cassia Wind would sell and
Idaho Power would purchase electric energy generated by Cassia Wind's wind generating
facility near Hagerman, Idaho. The Company asks the Commission to approve the Agreement
and declare that all payments for purchases of energy under the Agreement be allowed as
prudently incurred expenses for ratemaking purposes. On June 2 , 2006, the Commission issued
a Notice of Application and Modified Procedure requesting any comments to the matter. See
Order No. 30060. No comments were received other than those filed by Staff.
THE AGREEMENT
According to the Application, Cassia Wind proposes to design, construct, install, own
operate and maintain a 10.5 MW wind generating facility near Hagerman, Idaho (the "Facility
The Facility will be a qualified small power production facility under the applicable provisions
of the Public Utility Regulatory Policies Act of 1978 ("PURP A"
Under the terms of the Agreement, Cassia Wind has elected to enter into the
Agreement with Idaho Power for a 20-year term. Cassia Wind further elected to contract with
the Company using the non-Ievelized published avoided cost rates as currently established by the
Commission for energy deliveries of less than 10 aMW. All applicable interconnection charges
DECISION MEMORANDUM
and monthly operation and maintenance charges under Schedule 72 will be assessed to Cassia
Wind.
Cassia Wind has elected August 31 , 2006 as the scheduled first energy date and
December 31 , 2006 as the scheduled operation date for the Facility. Certain requirements have
been placed on Cassia Wind for Idaho Power to accept energy deliveries from the Facility.
Idaho Power will monitor compliance with these initial requirements, as well as ongoing
requirements throughout the term of the Agreement.
ST AFF COMMENTS
Based on its review, Staff believes that the Agreement between Cassia Wind and
Idaho Power comports with the terms and conditions of Commission Order No. 29632 (Us.
Geothermal et al v. Idaho Power) and avoided cost Order No. 29646. Staff recommends
approval ofthe Agreement with an effective date of April 7, 2006.
COMMISSION DECISION
Does the Commission desire to approve the Firm Energy Sales Agreement between
Idaho Power Company and Cassia Wind Farm, LLC?
Ceceha A. Gassner
M:IPC-O6-cg2
DECISION MEMORANDUM