20060628_1607.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:CECELIA A. GASSNER
DATE:JUNE 19 2006
SUBJECT:IN THE MATTER OF THE APPLICATION OF IDAHO POWER
COMP ANY FOR APPROV AL OF A FIRM ENERGY SALES
AGREEMENT WITH RIVERSIDE HYDRO I LLC, CASE NO. IPC-06-
On April 27, 2006, Idaho Power Company ("Idaho Power" or "Company ) filed an
Application requesting approval of a Firm Energy Sales Agreement dated April 13 , 2006 with
Riverside Hydro I LLC ("Riverside ). Under the Agreement, Riverside would sell and Idaho
Power would purchase electric energy generated by Riverside s Mora Drop Small Hydroelectric
Facility located near Kuna, 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 May 26, 2006, the
Commission issued a Notice of Application and Modified Procedure requesting any comments to
the matter. See Order No. 30053. No comments were received other than those filed by Staff.
THE AGREEMENT
According to the Application, Riverside proposed to design, construct, install, own
operate and maintain a 1.9 MW small canal hydroelectric generating facility to be located near
Kuna, 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
Under the terms of the Agreement, Riverside has elected to enter into the Agreement
with Idaho Power for a 20-year term. Riverside further elected to contract with the Company
using the non-Ievelized published avoided cost rates as currently established by the Commission
DECISION MEMORANDUM
for energy deliveries of less than 10 aMW. All applicable interconnection charges and monthly
operation and maintenance charges under Schedule 72 will be assessed to Riverside.
Riverside has elected May 15, 2006 as the scheduled first energy date and July 1
2006 as the scheduled operation date for the Facility. Certain requirements have been placed on
Riverside 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
As represented, the Riverside Hydro I Project will be a qualified small power
production facility (QF) under the applicable provisions of the Public Utility Regulatory Policies
Act of 1978 (PURP A). Riverside has selected May 15 , 2006 as the first energy date and July 1
2006 as the scheduled operation date for this facility.
Based on its review, Staff believes that the Agreement between Riverside Hydro I
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. The Agreement is for a
20-year term and contains the published non-Ievelized avoided cost rates set forth in Order No.
29646.
Section 24 of the Agreement provides that the Agreement will not become effective
until the Commission has approved all the Agreement's terms and conditions and declared that
all payments that Idaho Power makes to Riverside for purchases of energy will be allowed as
prudently incurred expenses for ratemaking purposes. The proposed effective date of the
Agreement is April 13 , 2006. Staff recommends approval of the Agreement.
COMMISSION DECISION
Does the Commission desire to approve the Firm Energy Sales Agreement between
Idaho Power and Riverside?
A~~
Cecelia A"'6 assner
M:IPC-O6-cg2
DECISION MEMORANDUM