20020508Hobdey Letter.doc

May 8, 2002

Craig D. Hobdey
Hobdey & Hobdey
PO Box 176
Gooding, ID 83330-0176

Re: The PUC’s Case No. GNR-E-02-01

Dear Craig,

In your letter dated May 2, 2002, you inquired about the Commission’s case GNR-E-02-1 that examines the project size and contract length for Power Sale Agreements between PURPA qualifying facilities (QFs) and electric utilities, e.g., Idaho Power Company. In answer to your questions, the comment period for this case was closed March 15, 2002. The Commission decided to increase the allowable size of the PURPA facility from 1 MW to 5 MW and lengthen the terms of the contract from 5 years to 20 years. The Order has not been issued yet. The issue of “avoided cost” rates was not addressed.

You may also wish to review the United States Senate’s recent action on the “Energy Policy Act of 2002” that amended House Bill 4. I believe both the Senate and House versions of this Bill amend PURPA to delete the obligation of an electric utility to purchase energy from a QF if FERC finds that the QF “has access to independently administered, auction-based day ahead and real time wholesale markets for the sale of [its] electric energy.” See Section 244(a) of the Bill. The Bill is now headed to a conference committee.

I hope you find this information helpful.

Sincerely,

Donald L. Howell, II
Deputy Attorney General

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