20150413_4650.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER RAPER
COMMISSION SECRETARY
COMMISSION STAFF

FROM: DAPHNE HUANG
DEPUTY ATTORNEY GENERAL

DATE: APRIL 10, 2015

SUBJECT: IDAHO POWER’S APPLICATION TO APPROVE AMENDMENTS TO
POWER PURCHASE AGREEMENTS REGARDING THE MID-C
MARKET INDEX, CASE NO. IPC-E-15-10

On April 2, 2015, Idaho Power Company filed an Application asking the Commission
to approve Amendments to three Power Purchase Agreements (PPAs) with projects that
reference Mid-Columbia (Mid-C) Market Energy Cost prices. Idaho Power asserts the
Amendments are “virtually identical, and cover the same issue as those submitted and approved”
in the settlement stipulation in Case No. IPC-E-13-15, and the First Amendment to Idaho
Power’s Agreement with United Materials of Great Falls, Inc. in Case No. IPC-E-14-21.
Application at 1.
BACKGROUND
The PPAs at issue in this case were approved in the following cases and Orders:
Seller Case Number PPA Approval Order
See id. at 2. Raft River and Hidden Hollow are qualifying facilities (QFs) under the Public
Utility Regulatory Policies Act (PURPA). Order Nos. 30485 at 2; 29928 at 1. USG Oregon’s
PPA is not a PURPA contract. Order No. 31087 at 2.
Each of the three PPAs references a Market Energy Cost or Mid-C Market Energy
Cost price. Application at 2. In the Hidden Hollow PPA, Market Energy Cost is defined with
reference to the Dow Jones Mid-C Index prices for non-firm energy, and correlates to Idaho
DECISION MEMORANDUM 2
Power’s Schedule 86 for Cogeneration and Small Power Production of Non-Firm Energy. Id. In
October 2013, the Dow Jones Mid-C Index was discontinued. Id.
On October 24, 2013, Idaho Power filed a tariff advice to update its tariff Schedule 86
to replace the old reference to the market index. Order No. 32945. The matter was processed
under Modified Procedure in Case No. IPC-E-13-25. The parties to that case executed a
stipulation to change the market index reference to the “Intercontinental Exchange (“ICE”) Mid-
Columbia Index.” Application at 3. The stipulation included a “revised formula for calculating
the non-firm price in Schedule 86.” Id. The parties also agreed “to amend the [PPAs] between
Idaho Power and each intervening party to reference the newer ICE index using the same
language as, and consistent with, the Schedule 86 language agreed upon in the Stipulation.” Id.
The Commission approved the stipulation in Order No. 33053. In that Order, the
Commission found it reasonable to allow amendment of any other existing PPA with Idaho
Power that contains reference to “the Dow Jones non-firm Mid-C electricity price index,” and
“to amend their respective agreements consistent with the terms of this Settlement Stipulation.”
Order No. 33053 at 4.
PROPOSED AMENDMENTS
Idaho Power has agreed, with the applicable sellers, to amend the three PPAs to
include the reference to the ICE index and revised formula, adopted for Schedule 86, as
approved in IPC-E-13-25. Application at 3. The Amendments provide for the switch to and use
of the agreed upon ICE index, from the time that the Dow Jones index was discontinued. Id.
Idaho Power made a similar request in Case No. IPC-E-14-21. In that case, Staff
recommended that the Commission approve the proposed Amendments without further process.
Idaho Power asks that its proposed Amendments in this case be approved upon Staff’s review,
without further process.
STAFF RECOMMENDATION
Consistent with the Commission’s prior Orders referenced herein, and Staff’s
recommendation in Case No. IPC-E-14-21, Staff recommends that the proposed Amendments in
this case be approved without further process.
DECISION MEMORANDUM 3
COMMISSION DECISION
Does the Commission wish to approve the Amendments without further process?

Daphne Huang
Daphne Huang
Deputy Attorney General

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