28910.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

in the matter of THE APPLICATION OF IDAHO POWER COMPANY FOR APPROVAL OF AN AGREEMENT FOR SALE AND PURCHASE OF SURPLUS ENERGY BETWEEN IDAHO POWER COMPANY AND THE AMALGAMATED SUGAR COMPANY, LLC—TWIN FALLS FACILITY.
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CASE NO. IPC-E-01-35

ORDER NO. 28910

On October 19, 2001, Idaho Power Company (Idaho Power; Company) filed an Application with the Idaho Public Utilities Commission (Commission) requesting approval of an Agreement for Sale and Purchase of Surplus Energy (Agreement) dated August 11, 2001, between Idaho Power and Amalgamated Sugar Company, LLC (TASCO) under which Idaho Power agrees to purchase up to 3 MW of surplus electric energy from TASCO’s refined sugar production facility in Twin Falls at prices that are less than market-based non-firm energy prices. The term of the Agreement will run for five (5) years following the initial service date.
Pursuant to the Agreement, the electric energy to be sold by TASCO is non-firm energy. The surplus energy to be purchased from TASCO is priced at 85% of the monthly weighted average non-firm Dow Jones Mid-Columbia Index price. Setting the purchase price at a discount from market price, Idaho Power contends, assures that when the Company needs the energy, the price will always be more attractive than buying from the market. When it does not need the power, Idaho Power believes it should be able to resell the energy at the higher wholesale market price.
Idaho Power notes that the Agreement contains a new Section 9, which has previously not been included in contracts between Idaho Power and PURPA qualifying facilities. Section 9 entitled “Reliability Management System”, is required by the Western Systems Coordinating Council (WSCC) as a part of Idaho Power’s participation in the WSCC Reliability Management System.
Idaho Power requests that the Agreement be approved without change or condition and requests a Commission determination that all payments for purchases of energy incurred under the Agreement be allowed as prudently-incurred expenses for ratemaking purposes.

On November 9, 2001, the Commission issued Notices of Application and Modified Procedure in Case No. IPC-E-01-35. The deadline for filing written comments or protests was November 29, 2001. The Commission Staff was the only party to file comments. Staff notes that the purchase price under the submitted Agreement is identical to the price agreed to in a similar agreement between Idaho Power and Amalgamated Sugar’s Nampa plant. Reference Case No. IPC-E-01-26, ON 28865. Staff recommends that the Agreement between Idaho Power and TASCO for its Twin Falls plant be approved. Staff believes that the Agreement will help Idaho Power meet expected loads while reducing the Company’s reliance on purchases at full market price, thus minimizing power supply costs. Staff also recommends that the reasonably incurred costs associated with the Tasco Agreement be passed through the Company’s Power Cost Adjustment (PCA) mechanism like any other power supply expense.

COMMISSION FINDINGS
The Commission has reviewed and considered the filings of record in Case No. IPCE-01-35, including the comments and recommendations of the Commission Staff. Based on our review, we continue to find it reasonable to process this case pursuant to Modified Procedure, i.e., by written submission rather than by hearing. Reference IDAPA 31.01.01.204.
The Commission finds the proposed August 11, 2001, Surplus Energy Agreement to be a reasonable means of securing additional electric energy and minimizing the Company’s power supply costs. We further find it reasonable to authorize recovery of related and reasonably incurred expenses through the Company’s Power Cost Adjustment mechanism.

CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over Idaho Power Company, an electric utility, pursuant to the authority and power granted it under Title 61 of the Idaho Code and the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq., and the Public Utilities Regulatory Policies Act of 1978 (PURPA).
The Commission has the authority under PURPA and the implementing regulations of the Federal Energy Regulatory Commission (FERC) to set avoided costs, to order electric utilities to enter into fixed term obligations for the purchase of energy from qualifying facilities and to implement FERC Rules. Reference 18 C.F.R. Section 292.

O R D E R
In consideration of the foregoing, IT IS HEREBY ORDERED and the Commission does hereby approve the terms of the August 11, 2001 Agreement for Sale and Purchase of Surplus Energy between Idaho Power Company and Amalgamated Sugar Company, LLC (TASCO)—Twin Falls facility.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this _______ day of December 2001.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

vld/O:IPC-E-01-35_sw

ORDER NO. 28910 1

Office of the Secretary
Service Date
December 6, 2001