20020506Decision Memo.doc

DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
RON LAW
LOU ANN WESTERFIELD
TONYA CLARK
DON HOWELL
DAVE SCHUNKE
RICK STERLING
RANDY LOBB
ALDEN HOLM
DAN GRAVES
LYNN ANDERSON
GENE FADNESS
WORKING FILE

FROM:

DATE: MAY 6, 2002

RE: CASE NO. IPC-E-01-42 (Idaho Power)
POWER SUPPLY CONTRACT—IDAWEST/GARNET ENERGY
MOTION TO VACATE AND RESCHEDULE

Pursuant to Notice issued March 8, 2002, the following scheduling and hearing dates were established in Case No. IPC-E-01-42:
March 22, 2002 Prefile deadline IPCo supplemental direct testimony
May 24, 2002 Prefile deadline Staff/Invenor direct testimony
June 14, 2002 Prefile deadline Company rebuttal
June 26 (27, 28), 2002 Technical (and public) hearing

On April 17, 2002, Idaho Power issued a press release captioned “Idaho Power Advises Garnet It Wants a One Year Delay in Power Plant Construction.” In its Notice the Company advises the public that the Company had exercised its “option to delay” the guaranteed commercial operation date of Garnet until June 1, 2005. Reference Power Purchase Agreement ¶ 4.4.1. (See attached).
On April 23, 2002, the intervenor Idaho Rural Council/Citizens for Responsible Land Use (IRC/CFRLU) filed a Motion and supporting brief with the Commission requesting that the scheduled prefile dates and hearing in Case No. IPC-E-01-42 be vacated and rescheduled. The Intervenor seeks to defer scheduling in the case for a period of at least 90 days.
The Commission Staff in an Answer filed April 25th supports the Intervenor’s Motion. The SouthWest Idaho SouthEast Oregon Building and Trades Council filed a Statement of Non-opposition.
The parties requesting continuance do so on the basis that the discovery process has been slow and much more protracted than expected. It is also contended that the Company has failed to release a draft of its 2002 IRP, having purportedly assured parties the day before scheduling in this matter that the draft would be released “early April.” It is now going on mid-May and the prefile date for Staff and Intervenors is May 24.
Idaho Power in “Response in Opposition” filed April 25 and brief filed May 1 contends that the Company would be adversely affected by a delay in the current agreed upon schedule. Also filing in opposition to the Motion is Garnet Energy. As reflected in its Answer, Idaho Power has the option on or before September 1, 2002, to cancel the Power Purchase Agreement for any reason. Having exercised its “option to delay”, Idaho Power becomes responsible to make monthly progress payments to the turbine manufacturer effective September 23, 2002. If Idaho Power gives notice of cancellation of the PPA prior to August 15, 2002, Idaho Power can avoid paying $8.4 million in progress payments due on September 23, 2002. If the Company cancels after August 15, 2002, the progress payment obligation will be due, with additional monthly progress payments after September 23rd in the amount of $1,649,000. If the Power Purchase Agreement is not cancelled, these payments will be reimbursed.
Delaying this case an additional 90 days in order to review the draft 2002 IRP, the Company contends, will not provide Intervenors and Staff any more information regarding Idaho Power’s need for the Garnet contract than they currently have. Further delays, it contends, could seriously impact the online date of the Garnet facility and Idaho Power’s ability to serve customer loads without exposure to wholesale market prices or the inability to import sufficient market purchases to carry loads under adverse water and weather conditions.
Garnet Energy in an “Opposing Brief” filed May 1, 2002 notes with emphasis that “the fact that the 2002 IRP would be released for public comment in the spring of 2002 was known to intervenors and Commission Staff when all parties agreed to the June 26, 2002, hearing date.” Timing of the release and its substance, it contends, comes as no surprise to any of the parties and should not now provide a basis to delay the hearing.
On May 6, 2002, IRC/CFRLU and Commission Staff filed Reply Comments to the Company’s “Response in Opposition.”
Commission Decision
Intervenors IRC/CFRLU and Staff request a 60 to 90 day delay in scheduling in this case. Idaho Power and its affiliate Garnet Energy oppose the requested delay. Does the Commission find it reasonable to grant a delay? If so, how many days?

vld/M:IPCE0142_sw2

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