20040601Notice of Application Order No 29509.pdf

Office of the Secretary
Service Date
June 1 , 2004
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT
APPLICATION OF IDAHO POWER
COMPANY AND TAMARACK RESORT LLC
FOR APPROVAL OF AN AGREEMENT TO
PROVIDE ELECTRIC DISTRIBUTION
FACILITIES.
CASE NO. IPC-04-
NOTICE OF APPLICATION
NOTICE OF MODIFIED
PROCEDURE
NOTICE OF COMMENT
DEAD LINES
ORDER NO. 29509
On May 5, 2004, Idaho Power Company (Idaho Power, Company) and Tamarack
Resort LLC (Tamarack) jointly filed an Application requesting the Commission issue an Order
approving an Agreement dated May 3 , 2004, under which Idaho Power would provide certain
electrical distribution facilities to Tamarack pursuant to a special line installation agreement.
Idaho Power requested that this Application be processed by Modified Procedure. In this Notice
the Commission processes Idaho Power s Application under Modified Procedure and establishes
a written comment deadline.
BACKGROUND
Tamarack is developing a substantial four-seasons resort project ("Resort Project")
in Valley County, Idaho. Tamarack has indicated that at final build-out, the Resort Project will
be a complex featuring approximately 2 000 housing units, approximately 272 000 square feet of
commercial space, a golf course, ski lifts and other recreational amenities. The Resort Project
will have a combined electrical load of approximately 20 megawatts (MW). Because final build-
out is expected to take a number of years, Tamarack has requested that Idaho Power make 7.
Megavolt-Ampere (MV A) of electrical capacity available to the Resort Project by November 1
2004.
Because the Resort Proj ect will be located in an area where Idaho Power does not
have existing facilities of adequate capacity and desired phase and voltage, the delivery of power
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINES
ORDER NO. 29509
(capacity) to the Resort Project site will require the construction of: (1) underground and
overhead facilities and lines to interconnect with Idaho Power existing
transmission/distribution system ("Interconnection Facilities ), and (2) installation of additional
substation equipment and facilities ("the Substation Facilities ). The Interconnection Facilities
and the Substation Facilities are collectively referred to as the "Requested Facilities.
Rule H is the Company s tariff provision that generally governs line extensions. By
its terms Rule H does not apply to all line extensions, and the parties have agreed that this
agreement is not subject to or governed by Rule H. However, the parties have agreed to use
some of the principles contained in Rule H to address refunds of a portion of the contribution in
aid of construction ("CIAC") to be paid by Tamarack under the Agreement to Provide Electric
Distribution Facilities between Idaho Power and Tamarack ("the Agreement"
).
Installation of
distribution facilities within the boundaries of the Resort Project will be made in accordance with
Rule H.
THE AGREEMENT
YOU ARE HEREBY NOTIFIED that the parties have agreed that the Requested
Facilities will be constructed in two phases. Phase 1 facilities have already been constructed and
will provide not more than 2 MV A of three-phase power at a point of delivery located adjacent
to the boundaries of the Resort Project. A general description of the Phase 1 facilities is included
as Exhibit 1 to the Agreement. Idaho Power completed Phase 1 construction in November 2003.
Phase 2 construction will be performed during the 2004 construction season and will include the
construction of the Requested Facilities to provide 7.5 MV A of electrical capacity at the delivery
point. A general description of the Phase 2 Requested Facilities is included as Exhibit 2 to the
Agreement. Phase 2 construction is expected to be completed by Idaho Power on or before
November 1 , 2004.
YOU ARE FURTHER NOTIFIED that the total estimated cost of the design and
construction of the Requested Facilities is $2 704 886. Assuming Tamarack makes all of its
required payments on schedule, the contribution in aid of construction ("CIAC") to be paid by
Tamarack will not exceed $1 891 372. Tamarack has paid Idaho Power $1 055 375 for the Phase
1 Requested Facilities, and $764 798 for Phase 2 Requested Facilities. As provided in the
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ORDER NO. 29509
Agreement Tamarack has agreed to pay Idaho Power an additional $191 199 on or before
October 1 , 2004.
YOU ARE FURTHER NOTIFIED that Idaho Power will own, operate and maintain
the Requested Facilities constructed pursuant to this Agreement. Tamarack recognizes that it is
paying a proportionate share of the total costs of improving a portion of Idaho Power s utility
system, and recognizes that Idaho Power will utilize the improvements to the system to provide
service to other customers, and that the improvements will be a part of Idaho Power s electrical
transmission and distribution system.
YOU ARE FURTHER NOTIIFIED that in order to supply 7.5 MW of electrical
capacity to Tamarack with the power quality specifications requested by Tamarack, Idaho Power
had to construct a portion of the Interconnection Facilities outside the Resort Project boundaries
with a capacity greater than 7.5 MV A. Tamarack will not be entitled to use more than 7.5 MW
of capacity in the Interconnection Facilities.
YOU ARE FURTHER NOTIFIED that Idaho Power and Tamarack have agreed that
while this Agreement is not subject to Rule H, it would be reasonable to apply the Rule H refund
principles in effect at the time of this Agreement to a portion of the cost of the Interconnection
Facilities located outside the Resort Project boundaries. With this exception, the Agreement is
not related to nor governed by Rule H.
YOU ARE FURTHER NOTIFIED that because the Requested Facilities, funded in
part by the CIAC Tamarack is making, will create additional capacity that can be used to serve
future customer loads, the Company has agreed to collect contributions from other customers
attaching to facilities who utilize the Requested Facilities to receive electric service. These
contributions will be in the form of vested interest refunds and line capacity charges. Portions
the Interconnection Facilities subject to vested interest refunds and the maximum refund dollar
amounts are described more particularly in the Agreement. Vested interest refunds will be
collected for a ten-year period following the completion of the Phase 2 Requested Facilities.
YOU ARE FURTHER NOTIFIED that in order to equitably share the cost of the
facilities for which Tamarack is providing a substantial CIAC, Idaho Power has agreed to collect
a line capacity charge from all other customers attaching to facilities that utilize the Requested
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ORDER NO. 29509
Facilities to receive electric service. Line capacity charges would be assessed, collected and
refunded to Tamarack as follows:
(a) Idaho Power will inventory all lots that are currently being "served" but
are not connected that might attach to facilities that will utilize the
Requested Facilities to receive electrical service. These are the lots where
the customer(s) have previously paid to install facilities to receive power
on the lots, but the lots have not been connected. Capacity has previously
been reserved for these lots, and customers have been advised that power
is readily available to their lot. These lots will be exempt from paying the
line capacity charges.
(b) Schedule 01 , Residential, and Schedule 01 , N on-Residential Customers
(or their successor schedules) would pay $800 per connection.
(c) Customers receiving service under Schedules 7, 9, 19, 24, 45 and 46 (or
their successor rate schedules) would pay $40 per kW of connected load.
(d) Line capacity charges will be collected for a period ending five (5) years
after the completion of the Phase 2 Requested Facilities, currently
scheduled for November 1 2004.
(e) Line capacity charges collected by Idaho Power will be paid to Tamarack
on a quarterly basis without interest.
(f) Planned developments such as subdivisions will pay line capacity charges
at the time of the application (when the lots are "served") and not at the
time of the physical power connection to the individual lot.
(g) Cash allowances through Rule H would not be applicable to reduce line
capacity charges.
YOU ARE FURTHER NOTIFIED that collections and refunds for both line capacity
charges and vested interest payments will cease when Tamarack has been refunded 80% of the
total amount Tamarack has paid for distribution facilities. Idaho Power will include the tax
gross-up portion of Tamarack's payments in the amount subject to refund to Tamarack. The
total amount that could be refunded to Tamarack from vested interest payments and line capacity
charges would be $1 075 571.
YOU ARE FURTHER NOTIFIED that Tamarack will pay Idaho Power $546 909 for
substation capacity of 7.5 MW (2.5 MW for Schedule 19 load and 5 MW for non-Schedule 19
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ORDER NO. 29509
load). The prorated share for the non-Schedule 19 load of $364 606 (5000 kW/7500 kW = 67%
x $546 909) is eligible for refund. Refunds will be available for a ten-year period following the
completion of the Phase 2 Requested Facilities. Idaho Power will pay Tamarack $73 per kW of
load (based on estimated demand) for facilities installed within the Resort Project boundaries and
taking service under Rate Schedule 01 , 07, 09, 24, 45 and 46. The demand amount used for
refunding purposes will include a diversity factor and will be equivalent to the demand on the
substation. The estimated demand for a subdivision lot will be 10 kW per lot for a refund
amount of $730 per lot. Substation refunds to Tamarack will be made after the final 2004
payment, and only after the completion of the individual distribution work orders have been
completed. These refund payments will be made without interest and with a maximum refund
payout of $364 606.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filings of
record in Case No. IPC-04-12. The Commission has preliminarily determined that the public
interest may not require a hearing to consider the issues presented in this case, and that the issues
raised by the Company s filing may be processed under Modified Procedure , by written
submission rather than by hearing. IDAPA 31.01.01.201-204. In so doing, the Commission
notes that Modified Procedure and written comment have proven to be an effective means for
obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that the Commission will not hold a hearing in
this proceeding unless it rec~ives written protests or comments opposing the use of Modified
Procedure and stating why Modified Procedure should not be used. IDAP A 31.01.01.203.
YOU ARE FURTHER NOTIFIED that if no protests or comments are received
within the deadline, the Commission may consider the matter and enter its Order without a
hearing. If protests or comments are filed within the deadline, the Commission will consider
them and may set the matter for hearing or may decide the matter and issue its Order on the basis
of the written positions before it. Reference IDAP A 31.01.01.204.
NOTICE OF COMMENT DEADLINES
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission by
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINES
ORDER NO. 29509
later than July 16, 2004. The comment must contain a statement of reasons supporting the
comment. IDAP A 31.01.01.202.02. Persons desiring a hearing must specifically request a
hearing in their written comments. Written comments concerning this Application shall be
mailed to the Commission and the Applicant at the addresses reflected below:
COMMISSION SECRETARY BARTON L. KLINE
IDAHO PUBLIC UTILITIES COMMISSION MONICA B. MOENPO BOX 83720 GREGORY W. SAIDBOISE, IDAHO 83720-0074 IDAHO POWER COMPANY
PO BOX 70
BOISE, ID 83707-0070
Email: bk1ine(~jdahopower.com
mmoen~idahopower .com
said idaho ower.com
Street Address for Express Mail:
472 WWASHINGTON ST
BOISE, ID 83702-5983
STEVEN J. MILLEMAN
MILLEMANN, PITTENGER
& PEMBERTON, LLP
PO BOX 1066
MCCALL, ID 83638
Email: sjm~cit1jllic net
MCMAHAN
JEAN PIERRE BOESPFLUG
TAMARACK RESORT LLC
475 S. CAPITAL BLVD, SUITE 200
BOISE, ID 83702
These comments should contain the case caption and case number shown on the first page of this
document. Persons desiring to submit comments via e-mail may do so by accessing the
Commission s homepage located at www.puc.state.id.. Click the "Comments and Questions
icon, and complete the comment form, using the case number as it appears on the front of this
document. These comments must also be sent to the Applicant at the e-mail addresses listed
above.
YOU ARE FURTHER NOTIFIED that Idaho Power Company shall have until July
, 2004 to file a written response to any comments, if it so desires.
YOU ARE FURTHER NOTIFIED that Idaho Power s Application can be viewed
online at www.puc.state.id.by clicking on "File Room" and "Electric Cases " or it can
viewed during regular business hours at the Idaho Public Utilities Commission, 472 West
Washington Street, Boise, Idaho and Idaho Power Company located at 1221 West Idaho Street in
Boise, Idaho (388-2200).
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINES
ORDER NO. 29509
YOU ARE FURTHER NOTIFIED that the Commission has jurisdiction over this
matter and Idaho Power Company, an electric utility, pursuant to the authority and power granted
under Title 61 of the Idaho Code and the Commission s Rules of Procedure IDAPA
31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure
and the foregoing schedule be adopted.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this .:l
~f1o-.
day of May 2004.
J~~~
MARSHA H. SMITH, COMMISSIONER
ATTEST:
Ij ommlSSlon ecretary
O:IPCE0412 In
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINES
ORDER NO. 29509