2001711_sw.doc

DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
RON LAW
LOU ANN WESTERFIELD
GENE FADNESS
RANDY LOBB
DON HOWELL
DAVE SCHUNKE
RICK STERLING
TONYA CLARK
BEVERLY BARKER
WORKING FILE

FROM: SCOTT WOODBURY

DATE: JULY 11, 2001

RE: CASE NO. IPC-E-01-23 (Idaho Power)
SCHEDULE 86 NON-FIRM ENERGY PURCHASE AGREEMENT
IDAHO POWER AND TAMARACK ENERGY PARTNERSHIP

On July 9, 2001, Idaho Power Company (Idaho Power; Company) filed an Application in Case No. IPC-E-01-23 requesting Commission approval of a tariff Schedule 86 Non-Firm Energy Purchase Agreement (Agreement). A copy of the May 2, 2001 Agreement accompanies the Application.
Tamarack presently operates 5 megawatts of electric generation capacity at its wood waste fire generating facility located near New Meadows, Idaho (the Project). The Project location is more particularly described as NW ¼ of Section 30, Township 19 North, Range 1 East, Boise Meridian, Adams County, Idaho. Tamarack currently sells all of the output of the Project to Idaho Power under a long-term power purchase contract. The Project is a qualified small power production facility (QF) under the applicable provisions of the Public Utility Regulatory Policies Act of 1978 (PURPA). Tamarack intends to develop an additional 2.5 megawatts of capacity at the Project. The first 1 megawatt is planned to be on line this fall with the balance to be added later.
Section 8 of the Agreement provides that “this Agreement shall not become effective until the Commission approves all terms and provisions hereof without change or condition and declares that all payments to made hereunder shall be allowed as prudently incurred expenses for ratemaking purposes.” Pursuant to Agreement the purchase price will be in accordance with Option A under Section 1 of tariff Schedule 86. The proposed on line date for the initial 1 megawatt of new generating capacity is November 1, 2001.
Idaho Power has reviewed the existing interconnection facilities and has determined that for the initial 1 megawatt generation increase, the existing interconnection facilities are adequate. If Tamarack desires to add additional capacity above the initial 1 megawatt (total of 6 megawatts) at this location, prior to any additional capacity being interconnected, Idaho Power states it will conduct a review of the facilities and submit the findings to the seller regarding additional interconnection facilities required and related charges.
As reflected in the Agreement, the Company’s Schedule 86 purchase prices will apply to monthly net energy deliveries exceeding the base kilowatt hours but less than the maximum kilowatt hours specified in Agreement Exhibit B.
Staff Analysis
Staff has reviewed the May 2, 2001 Idaho Power/Tamarack Schedule 86 Non-Firm Energy Agreement. The Agreement, as signed and submitted by the parties, contains non-firm energy rates in conformity with posted tariffs and applicable Commission Orders. Staff recommends that the Agreement be approved without further notice.
Commission Decision
Idaho Power has submitted a tariff Schedule 86 Non-Firm Energy Purchase Agreement with Tamarack Energy Partnership for Commission approval. Does the Commission find it reasonable to approve the Agreement without change or condition? Does the Commission find it reasonable to declare that all payments made under the Agreement shall be allowed as prudently incurred expenses for ratemaking purposes? Does the Commission agree that the Agreement can be approved without notice or further procedure?

Scott D. Woodbury

bls/M:ipce0123_sw
DECISION MEMORANDUM 2