20011115Decision Memo.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:
NOVEMBER 15, 2001 RE: CASE NO. IPC-E-01-40 (Idaho Power)
SCHEDULE 86—CSPP NON-FIRM ENERGY—AMENDMENT

On November 9, 2001, Idaho Power Company (Idaho Power; Company) filed an Application with the Idaho Public Utilities Commission (Commission) requesting approval of proposed changes and amendments to the Company’s existing tariff rate Schedule 86—Cogeneration and Small Power Production—Non-Firm Energy.
BACKGROUND
On January 22, 1997, the Commission issued Order No. 26750 approving the current Schedule 86. On May 3, 1999, the Commission issued Order No. 28033 approving the current methodology for computing the purchase price, or avoided energy cost, for non-firm purchases under Schedule 86. The purchase price section of Schedule 86 currently provides two options under which PURPA qualifying facilities can sell non-firm energy to the Company:
Option A. The purchase price is an amount equal to the monthly weighted average cost per kilowatt hour of the daily on-peak and off-peak Dow Jones Mid Columbia Electricity Price Index prices for non-firm energy published in the Wall Street Journal (Mid-C Index) minus $0.004 per kWh.
Option B. The Net Metering Option.
Description of Proposed Changes
Removal of Schedule 86 Option B.
Idaho Power has requested that the Commission approve a new tariff Schedule 84—Net Metering—which would take the place of Option B under Schedule 86. Reference Case No. IPC-E-01-39.
Tariff Eligibility Criteria
Idaho Power proposes to limit the applicability of Schedule 86 to PURPA qualifying facilities (QFs) with capacity name-plate ratings of less than 1 MW. This change, the Company contends, will bring Schedule 86 into conformity with the Commission’s current policy concerning qualifying facility purchase arrangements. Qualifying facilities smaller than 1 MW are entitled to Commission established published rates; but qualifying facilities larger than 1 MW are required to negotiate contracts with Idaho Power and to negotiate appropriate power purchase prices as a part of that contracting process.
Schedule 86 Purchase Price.
Idaho Power proposes to set the purchase price at an amount equal to eighty-five percent (85%) of the monthly weighted average Mid-C Index, consistent with several purchase and sale agreements the Company has recently entered into with various sellers. By establishing the purchase price as a percentage discount from the Mid-C Index, Idaho Power’s customers, the Company contends, can be confident that non-firm energy Idaho Power is obligated to purchase under Schedule 86 can be resold in the wholesale market at a price that will recover Idaho Power’s purchase costs plus transmission costs. Conversely, the Company contends that when Idaho Power desires to retain the non-firm energy delivered by a seller under Schedule 86, Idaho Power can be assured that the purchase price will be at least as beneficial as a wholesale non-firm market purchase.
Commission Decision
Idaho Power and Staff recommend that this case 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. Does the Commission find the proposed procedure to be acceptable? If not, what is the Commission’s preference?

vld/M:IPC-E-01-40_sw

DECISION MEMORANDUM 2