HomeMy WebLinkAbout20091214_2783.pdfDECISION MEMORANDUM 1
DECISION MEMORANDUM
TO: COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
DATE: DECEMBER 9, 2009
SUBJECT: CASE NO. PAC-E-09-09 (PacifiCorp)
POWER PURCHASE AGREEMENT – BELL MOUNTAIN HYDRO, LLC
On December 4, 2009, PacifiCorp dba Rocky Mountain Power (PacifiCorp;
Company) filed an Application with the Idaho Public Utilities Commission (Commission)
requesting approval of a 20-year Power Purchase Agreement between PacifiCorp and Bell
Mountain Hydro, LLC (Bell Mountain) dated November 17, 2009 (Agreement).
Bell Mountain intends to construct, own, operate and maintain a Pelton-wheel
hydroelectric generating facility (Facility) for the generation of electric power located
approximately 40 miles north of Howe, Idaho, in Butte and Lemhi Counties at a location more
particularly described as: SW 1/4 of the SW 1/4, Section 7, Township 10N, Range 27E, Boise
Meridian. Bell Mountain warrants that the Facility will be a qualified small power production
facility (QF) under the applicable provisions of the Public Utility Regulatory Policies Act of
1978 (PURPA). Agreement ¶ 3.2.6.
The facility is described as the following:
Two creeks, Bell Mountain Creek and Mahogany Creek, feed into a two-mile
canal, which Seller has recently lined, and 16,000 feet of new steel pipe.
Seller has also installed a new Pelton-wheel and a new 290 kW generator.
The water is used both for irrigation and power production. Water flow is
year-round and irrigation season is from April to October. Seller has a non-
consumptive water right to generate power. Seller has the ability to store
approximately 10 acre-feet of water in the canal (the “Pond”), which is
equivalent to about seven hours of generation at the Facility Capacity Rating.
Seller has no right to directly or indirectly regulate the flow of water to the
Facility except the cycling, or storing, of approximately 10 acre-feet of water
in the canal immediately upstream of the Facility’s generating structure.
DECISION MEMORANDUM 2
Agreement, Exh. A.
The submitted Agreement, as reflected in the Application, is the result of negotiation
and compromise. PacifiCorp will pay Bell Mountain non-levelized conforming energy or non-
conforming energy purchase prices for net output adjusted for the month and on-peak/off-peak
hours in accordance with Commission Order Nos. 30423 (monthly and daily price multipliers),
30480 (SAR methodology – fuel cost component), and 30744 (Conforming Energy Annual
Rates). The parties recognizing the intermittent nature of the resource have also agreed to
include a mechanical availability guarantee (MAG) and a $5.10/MWh wind integration cost
adjustment. Agreement ¶ 5.1. In addition, the Agreement contains provisions for delay
liquidated damages (¶ 2.3) to secure the established scheduled commercial operation date of
December 15, 2009.
The nameplate rating of the Facility is 290 kW. Agreement, Exh. A. The estimated
annual generation is 1,102,530 kWh. Agreement, Exh. D. Under normal and/or average
conditions, the Facility will not exceed 10 aMW on a monthly basis. Should the Facility exceed
10 aMW on a monthly basis, PacifiCorp may except inadvertent energy at its sole discretion, but
will not purchase or pay for inadvertent energy. Agreement ¶ 5.3.
The Scheduled Commerical Operation Date of the Facility is December 15, 2009.
Agreement ¶ 2.2.4. Agreement ¶ 2.1 provides that the Agreement will not become effective until
the Commission has approved all of the Agreement’s terms and conditions and declares that all
payments PacifiCorp makes to Bell Mountain are just and reasonable and legitimate expenses, all
of which the Commission will allow PacifiCorp to recover in rates in Idaho in the event other
jurisdictions deny recovery of their proportionate share of said expenses.
COMMISSION DECISION
Commission Staff recommends that PacifiCorp’s Application in Case No. PAC-E-09-
09 (Power Purchase Agreement – PacifiCorp/Bell Mountain Hydro) be processed pursuant to
Modified Procedure, i.e., by written submission rather than hearing. Reference IDAPA
31.01.01.201-204. Does the Commission agree with the recommended procedure?
Scott Woodbury
Deputy Attorney General