20050426Final Order No 29773.pdf

Office of the Secretary
Service Date
April 25, 2005
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF A FIRM ENERGY SALES
AGREEMENT FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY
BETWEEN IDAHO POWER COMPANY
AND TUANA GULCH WIND PARK, LLC.
CASE NO. IPC-O5-
ORDER NO. 29773
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 Tuana Gulch Wind Park
LLC (Tuana Gulch) dated February 18 , 2005. Under the Agreement, Tuana Gulch will sell and
Idaho Power will purchase electric energy generated by the Tuana Gulch Project located near
Hagerman, Idaho in an area more particularly described as Sections 1 , 6, 7, 12, 18, and 19
Township 7 South, Range 12 East, Boise Meridian, Twin Falls County, Idaho and Sections 19 and
, Township 6 South, Range 13 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 10.5 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 17.
The Tuana Gulch 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).
As represented by Idaho Power, the Agreement with Tuana Gulch comports with the terms and
conditions of Commission Order No. 29632 (Us. Geothermal et al. v. Idaho Power) 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. Tuana Gulch has selected December 31 , 2005 as
the scheduled operation date and January 15 , 2006 as the first energy date. The proposed effective
date of the Agreement is February 18 2005.
ORDER NO. 29773
On March 15, 2005, the Commission issued Notices of Application and Modified
Procedure in Case No. IPC-05-9. The deadline for filing written comments was Tuesday, April
, 2005. Comments were filed by Commission Staff and a number of interested parties and
project area residents.
In its comments, Commission Staff notes that Tuana Gulch is one of four wind projects
proposed in the Bell Rapids area west of the City of Hagerman. Reference Thousand Springs
(Case No. IPC-05-6), Pilgrim Stage (Case No. IPC-05- 7) and Oregon Trail (Case No. IPC-
05-8). In addition to these four projects, Staff notes that the Fossil Gulch project previously
approved by the Commission is also located in the same vicinity. Construction of the Fossil
Gulch project is nearly complete. These four projects, in addition to the Fossil Gulch project
bring the total installed capacity in the vicinity to 50 MW. Staff recommends approval of the
Agreement with the Company recommended effective date of February 18 , 2005.
The comments filed by interested parties and area residents generally support
renewable energy and wind power. Concern was expressed regarding the siting of the towers
however. Many commenters had not expected to see the seven Fossil Gulch wind towers on the
rim, and believe that the placement of additional towers on or close to the rim will ruin the scenic
beauty in the valley and is unconscionable. It is recommended that the towers be sited west of the
rim, out of sight. The flashing aircraft warning lights on the existing Fossil Gulch windmills were
cited as an extremely annoying feature for the residents of the Hagerman Valley. Considering that
the valley floor is nearly 1 000 vertical feet below the tops of these towers, commenters suggest
that the lights need to be shielded so that the lights are only visible 200 feet above the ground level
at the towers. Lights should be shielded, they contend, to avoid light pollution on the ground.
One commenter suggests that it is important that the siting decisions be done in conformance with
environmental studies that minimize the impacts upon night-flying birds, bats , and raptor flyways.
It is also important, the commenter states, that habitat for prairie grouse (sage grouse, sharp-tailed
grouse, and lesser and greater prairie-chicken) be kept intact and not fragmented by wind turbine
development. Leks and traditional mating grounds, the commenter cautions, should be avoided.
The commenter assumes that environmental studies have been completed by competent scientists
and that the Applicants have configured their development proposals to conform with them.
One commenter notes that in the case of the proposed windmills, Exergy, the project
developer, is changing the viewshed along the Thousand Springs Scenic Byway. This, the
ORDER NO. 29773
commenter states, is a negative impact, but Exergy has an opportunity to offset that impact and
turn their presence into a plus for the local area. Instead of operating merely for their own profit
and to supply electricity to other regions, as a good neighbor, the commenter suggests that Exergy
could assist in local efforts to promote the Thousand Springs Scenic Byway, assist in the cost of
interpreting the wise uses of natural resources, aid in developing recreation attractions and tourism
businesses and support green energy education and resource protection in the Hagerman area.
Commission Findings
The Commission has reviewed the filings of record in Case No. IPC-05-, including
the underlying Agreement and filed comments. Idaho Power has presented a Firm Energy Sales
Agreement with Tuana Gulch for Commission consideration and approval. The Agreement is for
a 10.5 MW wind project located in the Hagerman area. As represented and pursuant to contract
under normal and/or average conditions the project will not exceed 10 aMW on a monthly basis.
We thus find that the project is qualified to receive the published avoided costs rates approved by
the Commission.
We find that all commenting parties support the development of wind energy.
Interested parties and local residents, however, have expressed concerns regarding the siting of the
turbines, environmental impact and light pollution. These issues, we note, are matters that fall
outside this Commission s statutory jurisdiction. We are informed by Commission Staff that
James Carkulis of Exergy, the developer of the project, has stated that these concerns are matters
that are the subj ect of ongoing discussions and matters that can be raised in other forums and
addressed during local conditional use permit hearings.
participate in those discussions and proceedings.
We encourage the commenters
The Commission finds that the Agreement submitted in this case contains acceptable
contract provisions and includes the non-Ieve1ized published rates approved by the Commission in
Order No. 29646. We find it reasonable that the submitted Agreement be approved without
further notice or procedure. IDAPA 31.01.01.204. We further find it reasonable to allow
payments made under the Agreement as prudently incurred expenses for ratemaking purposes.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over Idaho Power Company,
an electric utility, pursuant to the authority and power granted it under Title 61 of the Idaho Code
and the Public Utility Regulatory Policies Act of 1978 (PURP A).
ORDER NO. 29773
The Commission has authority under PURP A and the implementing regulations of the
Federal Energy Regulatory Commission (FERC) to set avoided costs, to order electric utilities to
enter into fixed term obligations for the purchase of energy from qualified facilities and to
implement FERC rules.
ORDER
In consideration of the foregoing, IT IS HEREBY ORDERED and the Commission
does hereby approve the February 18, 2005 Firm Energy Sales Agreement between Idaho Power
Company and Tuana Gulch Wind Park, LLC.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code 9 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this c2.S--f"'I'o-
day of April 2005.
/J~
MARSHA H. SMITH, COMMISSIONER
ATTEST:
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ORDER NO. 29773