20050228Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DATE:FEBRUARY 24, 2005
RE:CASE NO. IPC-05-3 (Idaho Power)
FIRM ENERGY SALES AGREEMENT-LEWANDOWSKI FARMS
On February 11 , 2005 , Idaho Power Company (Idaho Power; Company) filed an
Application with the Idaho Public Utilities Commission (Commission) requesting approval of a
Firm Energy Sales Agreement (Agreement) between Idaho Power and Lewandowski Farms
dated February 10, 2005. Under the Agreement Lewandowski Farms would sell and Idaho
Power would purchase electric energy generated by the Lewandowski Farms Wind Generation
Project (Project) located on Simco Road east of Boise in Elmore County, Idaho in an area more
particularly described as the NW Y4 of Section 23, Township 1 South, Range 4 East, Boise
Meridian Elmore County, Idaho. The Project consists of three (3) Micon, 108 kW wind
generation machines. The nameplate reading of the project is 324 kW with a maximum
generation capability of 400 kW.
Lewandowski Farms is currently interconnected and selling energy to Idaho Power
from this Project pursuant to a previously approved tariff Schedule 86 Non-Firm Energy
Purchase Agreement dated May 2, 2001 (as amended on May 28 , 2004). Reference Order
No. 28795. The Project will continue to be a Qualifying Facility (QF) under the applicable
provisions of the Public Utility Regulatory Policies Act of 1978 (PURP A).
As represented by Idaho Power, the Agreement with Lewandowski Farms comports
with the terms and conditions of Commission Order No. 29632 (Case No. IPC-04-, Bob
Lewandowski and Mark Schroeder vs. Idaho Power) and avoided cost Order No. 29646. The
DECISION MEMORANDUM
contract is for a five-year term and contains the published non-Ievelized avoided cost rates set
forth in Order No. 29646.
As reflected in Section 24 of the Agreement, the Agreement will not become effective
until the Commission has approved all the Agreement's terms and conditions and declares that
all payments that Idaho Power makes to Lewandowski Farms for purchases of energy will be
allowed as prudently incurred expenses for ratemaking purposes. The proposed effective date of
the Agreement is February 10, 2005.
STAFF ANALYSIS
Staff has reviewed the rates contained in the Agreement and finds that they comport
with Order No. 29646, the most recent Commission Order establishing avoided cost rates. Staff
further agrees with the representation of Idaho Power that the Agreement terms and conditions
comport with the Commission s Order No. 29632 in Bob Lewandowski and Mark Schroeder
complaint case No. IPC-04-10.As the contract terms have been litigated and the non-
levelized rates comport with the Commission published rates, Staff recommends that the
submitted Agreement be approved without further notice or procedure.
COMMISSION DECISION
The Lewandowski Farms Wind Generation Project and contract terms under
consideration were the subject of the recent complaint proceeding in Case No. IPC-04-10. The
contract terms and conditions comport with the Commission final Order No. 29632
(reconsideration Order No. 29682) and non-Ievelized rates established in Order No. 29646. The
tendered Agreement is meant to replace the Schedule 86 Non-Firm Agreement presently in
place.
Does the Commission agree that it is appropriate to approve the Idaho
Power/Lewandowski Farms Agreement without further notice or procedure?
Scott Woodbury
Vld/M:IPCEO503 sw
DECISION MEMORANDUM