20110801_3408.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: KARL T. KLEIN
DEPUTY ATTORNEY GENERAL

DATE: JULY 28, 2011

SUBJECT: IDAHO POWER’S APPLICATION FOR APPROVAL OF 2011 SERVICE
AGREEMENT WITH DOE, CASE NO. IPC-E-11-13

On July 7, 2011, Idaho Power Company applied to the Commission for an Order
approving a new special services agreement between Idaho Power and the U.S. Department of
Energy (DOE) for service at the Idaho National Engineering Laboratory. Idaho Power asks the
Commission to process the Application using Modified Procedure, a request with which the Staff
concurs.
BACKGROUND
The Commission approved Idaho Power’s current special services agreement (the
“2006 Agreement”) with the DOE in 2006. The 2006 Agreement stated that Idaho Power will
provide electric service under Schedule 30. The rates and charges for providing service under
Schedule 30 were subject to change in an appropriate ratemaking proceeding (the “tariff
standard,” as opposed to the “contract standard” where the rates are fixed in the contract).
The 2006 Agreement had a one-year term, subject to four, one-year renewal options.
Each option was exercised with the Commission’s approval. This extended the 2006
Agreement’s term through May 2011. As that date approached, however, the parties asked the
Commission to further extend the 2006 Agreement’s term to allow the parties more time to
negotiate a new special services agreement. The Commission approved the parties’ request and
extended the term until September 14, 2011. See Application at 2.
DECISION MEMORANDUM 2
Idaho Power and DOE subsequently negotiated and signed the new 2011 Agreement
on June 30, 2011. The 2011 Agreement will take effect on September 15, 2011, subject to
Commission approval. Idaho Power now seeks that approval.
2011 AGREEMENT
Idaho Power attached the 2011 Agreement to the Application. See Application
Attachment No. 1. The Company states that the 2011 Agreement is generally similar to the 2006
Agreement (there appears to be additional definition and clarifying language), with the primary
substantive changes being:
Term: The 2011 Agreement changes the term from a one-year term with
four one-year options, to a single five-year term that (if approved) will
begin on September 15, 2011, and expire on September 14, 2016. See
2011 Agreement, § 1.1 (Term of Authorization);

Contract Demand: The 2011 Agreement increases the contract demand
ceiling. Idaho Power notes that the initial contract demand amount is 45
MW, with a maximum contract demand ceiling of 55 MW. The DOE may
ask Idaho Power for additional demand above 55 MW, which may be
granted at Idaho Power’s discretion. The 2011 Agreement enables the
Company to assess a contract demand charge to the DOE in an effort to
allow “for more flexible rate design and for consistency with other large
special contract customers.” If assessed, the contract demand charge will
be contained in Schedule 30. See 2011 Agreement §§ 4 and 6;
Application at 3; and

Schedule 30: The parties anticipate that Idaho Power’s pending general
rate case (IPC-E-11-08) will result in new rates. Accordingly, while the
2011 Agreement will not immediately change Idaho Power’s Schedule 30
rates, the parties expect the Schedule 30 rates will be modified after the
Commission issues its final Order in the rate case. See Application at 3;
2011 Agreement,§ 6.1

MODIFIED PROCEDURE
Idaho Power asks the Commission to approve the 2011 Agreement under Modified
Procedure. See Application at 4. Staff concurs with Idaho Power’s request because the issues
presented may be adequately addressed through written submissions without a hearing.
Accordingly, Staff recommends that the Commission process the Application using Modified
Procedure with a 21-day comment period. See RP 201 and 202.
DECISION MEMORANDUM 3
COMMISSION DECISION
Does the Commission wish to process Idaho Power’s Application through Modified
Procedure and issue a Notice of Application and Modified Procedure with a 21-day comment
period?

M:IPC-E-11-13_kk