20121016notice_of_partial_settlement_order_no_32665.pdf

Office of the Secretary
Service Date
October 16,2012
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE COMMISSION’S )
REVIEW OF PURPA QF CONTRACT )CASE NO.GNR-E-11-03
PROVISIONS INCLUDING THE )
SURROGATE AVOIDED RESOURCE (SAR))NOTICE OF PARTIAL
AND INTEGRATED RESOURCE PLANNING )SETTLEMENT STIPULATION
(IRP)METHODOLOGIES FOR )
CALCULATING PUBLISHED AVOIDED )REQUEST FOR COMMENT
COST RATES.)
_______________________________
)ORDER NO.32665
On August 15,2012,the Commission issued a Notice scheduling a settlement
conference in this case for parties to discuss two issues:(1)light load curtailment as proposed by
Idaho Power Company in its Schedule No.74 or an alternative process;and (2)power purchase
agreement (PPA)terms related to delay security or liquidated damages.Order No.32617.The
participating parties met in settlement conference on August 23,and September 7,2012.
Negotiations regarding curtailment were not fruitful.However,on October 2,2012,
a “Partial Settlement Stipulation”was filed on behalf of 13 parties in the case that generally
addresses the issue of delay security and liquidated damages in PURPA power purchase
agreements (PPAs).In this Notice,we invite the parties and members of the public to comment
on the Partial Settlement Stipulation.
THE PARTIAL SETTLEMENT STIPULATION
As a result of the settlement discussions,13 of the 25 parties that participated in the
settlement conference signed the Partial Settlement Stipulation.The signing parties agreed that
existing PPAs that have been approved by the Commission shall not be affected by the Partial
Settlement Stipulation.In addition,some of the PURPA qualifying facility (QF)parties that
signed the settlement are not necessarily affected by the issues contained in the Settlement
Stipulation,but nevertheless do not oppose settlement of these issues.The signing parties agreed
to settle the following issues and that all new PPAs approved after the date of the Partial
Settlement Stipulation conform to the terms of the Stipulation.
The signing parties agreed the Settlement Stipulation represents a compromise of the
position of the parties.The signing parties further assert that the Settlement Stipulation is
NOTICE OF PARTIAL
SETTLEMENT STIPULATION
REQUEST FOR COMMENT
ORDER NO.32665 1
reasonable and in the public interest.They urged the Commission to adopt the Settlement
Stipulation without condition or modification.
1.Calculation of the Security Deposit.The Parties agree that a security deposit or
performance bond (“the Security Deposit”)will be required for each new PURPA agreement
(PPA;FESA)entered into after the date upon which the Commission adopts and approves this
Settlement Stipulation.The purpose of the Security Deposit is to provide security for:(1)Delay
Damages during the Cure Period if the QF is not in commercial operation by the Scheduled
Commercial Operation Date set out in the PPA;and (2)Termination Damages if the QF cannot
cure a failure to achieve commercial operation and a party seeks termination of the PPA.The
Security Deposit shall be set at $45.00 per kilowatt (kW)of nameplate capacity for each new
PPA.The cash or other liquid Security Deposit will be forwarded to the utility no later than
thirty (30)days after the Commission issues its final Order approving the PPA.
2.Refund of Security Deposit.If the QF has achieved commercial operation in
accordance with the Scheduled Commercial Operation Date set out in the PPA,the utility will
promptly refund the Security Deposit to the QF.
3.Failure to Achieve Commercial Operation —Delay Damages.In the event the QF
fails to achieve commercial operation by the Scheduled Commercial Operation Date contained in
the PPA,Delay Damages shall be calculated based upon the difference between market rates at
the time the QF fails to achieve its Scheduled Commercial Operation Date and the avoided cost
rates contained in the PPA during the Cure Period.Delay Damages,if any,during the Cure
Period will be drawn from the Security Deposit held by the utility.If the Security Deposit is
insufficient to defray all of the Delay Damages,then the QF will promptly pay the outstanding
Delay Damages.If the QF achieves commercial operation during the cure period,any remaining
Security Deposit beyond the amount of any Delay Damages shall be refunded to the QF.
4.Cure Period.The defaulting party shall have one hundred twenty (120)days from
the Scheduled Operation Date to cure its default.
5.Failure to Cure.In the event the QF fails to achieve commercial operation within
the Cure Period,then the non-defaulting party may,at its option,collect its Delay Damages as
calculated in Paragraph No.3 above,terminate the Agreement,and calculate its Termination
Damages,if any.If the QF fails to achieve commercial operation within the cure period and the
NOTICE OF PARTIAL
SETTLEMENT STIPULATION
REQUEST FOR COMMENT
ORDER NO.32665 2
non-defaulting party elects to terminate the Agreement,the Security Deposit may be used to:(a)
first pay the Delay Damages arising during the cure period,if any;and (b)second pay
Termination Damages,if any,arising after the Cure Period for the remaining term of the
Agreement.
6.Termination Damages.The party claiming that the PPA is in default and seeking
termination of the Agreement shall communicate its notice of default and claim for any
Termination Damages to the other party within a reasonable time.The other party shall respond
within fifteen (15)days.In the event of a dispute regarding the calculation of Termination
Damages,either party may resort to a court of competent jurisdiction.
7.Undisputed Damages and Refunds.The utility may draw any undisputed Delay
Damages or Termination Damages from the Security Deposit.In the event that the Security
Deposit is insufficient to pay the undisputed damages,such undisputed damages will be paid
promptly by the defaulting party.If the Security Deposit exceeds the total amount claimed as
Delay Damages or Termination Damages,the utility shall promptly refund any portion of the
deposit that is in excess of the claimed Delay Damages or Termination Damages.
8.Security Deposit for Existing OF Projects.The Parties agree that a Security
Deposit shall not be required in situations where the parties are entering into a new PPA for an
existing QF project already in commercial operation so long as the new PPA is between the same
parties and there are no material changes or modifications to the existing QF project.
REQUEST FOR COMMENTS
YOU ARE HEREBY NOTIFIED that the Commission invites the parties and
members of the public to provide written comments in support or opposition of the Partial
Settlement Stipulation no later than October 25,2012.Written comments concerning the Partial
Settlement Stipulation should be mailed to the Commission at:
Commission Secretary
Idaho Public Utilities Commission
P0 Box 83720
Boise,ID 83 720-0074
Street Address for Express Mail:
472 W.Washington Street
Boise,ID 83702-5918
NOTICE OF PARTIAL
SETTLEMENT STIPULATION
REQUEST FOR COMMENT
ORDER NO.32665 3
Comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission’s home page located at www.puc.idaho.gov.Click the “Comments and Questions”
icon,and complete the comment form,using the case number as it appears on the front of this
document.
YOU ARE FURTHER NOTIFIED that formal parties in this docket must serve their
comments on other parties via electronic mail.
YOU ARE FURTHER NOTIFIED that the Commission will consider comments
regarding the Partial Settlement Stipulation with the other evidence offered in this case.
ORDER
IT IS HEREBY ORDERED that parties desiring to submit written comments in
support or opposition to the Partial Settlement Stipulation must do so no later than October 25,
2012.
IT IS FURTHER ORDERED that parties in this docket filing written comments shall
serve other parties with their comments via electronic mail.
NOTICE OF PARTIAL
SETTLEMENT STIPULATION
REQUEST FOR COMMENT
ORDER NO.32665 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this /;
day of October 2012.
PAUL KJELL/ANDEa PRESIDENT
REDRDON
MARSHA H.SMITH,COMMISSIONER
ATTEST:
/1 d .//7
1t /I
Jean D Jewell
COmmission Scretary
0:GNRE-11 -03 dh2 Partial Settlement Stipulation
NOTICE OF PARTIAL
SETTLEMENT STIPULATION
REQUEST FOR COMMENT
ORDER NO.32665 5