10302001.doc

DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
RON LAW
LOUANN WESTERFIELD
BILL EASTLAKE
TONYA CLARK
DON HOWELL
LYNN ANDERSON
DAVE SCHUNKE
RICK STERLING
RANDY LOBB
GENE FADNESS
WORKING FILE
FROM:
DATE:
OCTOBER 30, 2001 RE: CASE NO. IPC-E-01-35 (Idaho Power)
AGREEMENT FOR SALE AND PURCHASE OF SURPLUS ENERGY
IDAHO POWER/AMALGAMATED SUGAR (TASCO)

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) between Idaho Power and Amalgamated Sugar Company, LLC (TASCO) under which Idaho Power agrees to purchase surplus electric energy up to 3 MW 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 under the Surplus Energy Agreement is non-firm energy and will only be available when TASCO does not consume the electric energy in the Twin Falls plant. 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 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.
Idaho Power requests that the Application be processed pursuant to Modified Procedure, i.e., by written submission rather than by hearing. Reference Commission Rules of Procedure, IDAPA 31.01.01.201-204.
Commission Decision
Staff recommends that the Company’s Application be processed pursuant to Modified Procedure. Standard Modified Procedure comports with the requirements of both Idaho Power and Tasco. Does the Commission find the proposed procedure to be acceptable?

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

DECISION MEMORANDUM 2