20030521_474.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLAND ER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DATE:MAY 16, 2003
RE:CASE NO. PAC-01-16 (PacifiCorp)
ELECTRIC SERVICE AGREEMENT-MONSANTO (Soda Springs)
On December 10, 2001 , PacifiCorp dba Utah Power & Light Company (PacifiCorp;
Company) filed an Application with the Idaho Public Utilities Commission (Commission)
regarding supply of electric service to Monsanto Company (Monsanto). Monsanto s Soda
Springs facility produces elemental phosphorous and is PacifiCorp s largest Idaho customer with
an electric load of over 200 megawatts. PacifiCorp and Monsanto are engaged in litigation in
federal District Court regarding the contract termination date of a Commission approved 1995
Power Supply Agreement (Agreement). Reference Case No. UPL-95-, Order No. 26282.
The Commission by Order No. 28918 issued December 21 , 2001 , denied the
Company s interim rate request.As reflected in the Commission s Order No. 28918, the
procedure and process adopted by the Commission in this case was to establish a permanent rate
going forward for Monsanto. A true-up mechanism retroactive to the termination date of the
existing Agreement as determined by the federal District Court will be used to adjust the
difference between the existing rate and the new rate.
On January 27 , 2003 , the Commission issued final Order No. 29157 in Case No.
PAC-01-16 deciding relevant contract and rate issues for a new service agreement. As
reflected in the Commission s Order
, "
the Commission resolution of issues, while
determinative, is not in lieu of a new service agreement which the Commission expects the
parties to negotiate, finalize and file for approval."
DECISION MEMORANDUM
On February 18, 2003 , PacifiCorp filed a Petition for Reconsideration and
Clarification of Order No. 29157. On March 14, 2003 , the Commission issued Final Order On
Reconsideration No. 29206 denying PacifiCorp s Petition for Reconsideration and providing
clarification on some limited points. The parties were encouraged to negotiate in good faith and
to submit a signed service agreement conforming with the Commission s Orders for Commission
consideration and approval.
On May 13, 2003, an Electric Service Agreement between PacifiCorp and Monsanto
was filed with the Commission. The parties contend that the Agreement complies with the terms
of Commission Order Nos. 29157 and 29206.
Commission Staff has reviewed the submitted Electric Service Agreement between
PacifiCorp and Monsanto and finds that it comports in all material respects with the rates and
terms established and defined in the Commission s Orders in Case No. PAC-01-16. The
Agreement by its terms is subject to the approval of the Commission. The submitted Agreement
is effective January 1 , 2003 and terminates on December 31 , 2006. Staff recommends that the
Commission approve the Electric Service Agreement without change or modification.
Commission Decision
PacifiCorp and Monsanto Company have submitted an Electric Service Agreement
effective January 1 , 2003 and terminating December 31 , 2006, for retail electric service to the
Monsanto Soda Springs Plant. The contract parties represent that the Agreement complies with
the terms of Commission Order Nos. 29157 and 29206 in Case No. PAC-01-16. Staff has
reviewed the Agreement and agrees.Staff recommends that the Agreement be approved
pursuant to Commission Order. Does the Commission agree?
Scott Woodbury
Vld/M:PACEOl16 sw2
DECISION MEMORANDUM