20050308Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DATE:MARCH 7, 2005
SUBJECT:CASE NO. IPC-05-9 (Idaho Power)
FIRM ENERGY SALES AGREEMENT - TUANA GULCH
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 Proj ect 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 30 , 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 ~ 7.
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).
Tuana Gulch 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 Tuana Gulch 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 Tuana Gulch 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
Tuana Gulch Wind Park, LLC. The contract is for a 20-year term and contains the non-Ievelized
published avoided cost rates for energy deliveries not exceeding 10 aMW on a monthly basis.
The Commission Staff recommends that the Company 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.
recommended procedure?
Does the Commission agree with the
Scott D. Woodbury
blslM:IPCEO509 sw
DECISION MEMORANDUM