20050308Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DATE:MARCH 7, 2005
SUBJECT:CASE NO. IPC-05- 7 (Idaho Power)
FIRM ENERGY SALES AGREEMENT - PILGRIM STAGE
On February 24, 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 Pilgrim Stage Station
Wind Park, LLC (Pilgrim Stage) dated February 18, 2005. Under the Agreement, Pilgrim Stage
will sell and Idaho Power will purchase electric energy generated by the Pilgrim Stage Project
located near Hagerman, Idaho in an area more particularly described as Sections 19, 24, 25 and
, Township 7 South, Range 12 East, Boise Meridian, Twin Falls County, Idaho. The Project
consists of seven (7) 1.5 MW GE wind turbines. The nameplate rating of the project is, 10.
MW. Under normal and/or average conditions the project will not exceed 10 aMW on a monthly
basis. If energy in excess of this amount (Inadvertent Energy) is accidentally generated, Idaho
Power will accept Inadvertent Energy that does not exceed the 10.5 MW maximum capacity
amount but will not purchase or pay for it. Agreement ~ 7.3.
The Pilgrim Stage Project will be a qualified small power production facility (QF)
under the applicable provisions of the Public Utility Regulatory Policies Act of 1978 (PURP A).
Pilgrim Stage has selected December 31 , 2005 as the scheduled operation date and January 15
2006 as the first energy date.
As represented by Idaho Power, the Agreement with Pilgrim Stage comports with the
terms and conditions of Commission Order No. 29632 (V.S Geothermal et. al v. Idaho Power)
DECISION MEMORANDUM
and avoided cost Order No. 29646. The contract is for a 20-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 Pilgrim Stage for purchases of energy will be allowed as
prudently incurred expenses for ratemaking purposes. The proposed effective date of the
Agreement is February 18, 2005.
COMMISSION DECISION
Idaho Power requests Commission approval of Firm Energy Sales Agreement with
Pilgrim Stage Station Wind Park, LLC. The contract is for a 20-year term and contains the non-
levelized published avoided cost rates for energy deliveries not exceeding 10 aMW on a monthly
basis. The Comnlission Staff recommends that the Colnpany s Application be processed
pursuant to Modified Procedure, i., by written submission rather than by hearing. Reference
Commission Rules of Procedure, IDAPA 31.01.01.201-204. Does the Commission agree with
the recommended procedure?
Scott D. Woodbury
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DECISION MEMORANDUM