20050415Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:KIRA DALE PFISTERER
DATE:APRIL 13 2005
RE:CASE NO. IPC-05-
FIRM ENERGY SALES AGREEMENT-PRISTINE SPRINGS
On March 4, 2005, Idaho Power Company filed an Application requesting approval
of a Firm Energy Sales Agreement (Agreement) between Idaho Power and Pristine Springs, Inc.
dated February 18 , 2005. The new Agreement will replace an existing Firm Energy Sales
Agreement between Idaho Power and Pristine Springs approved by the Commission on
November 15 , 1994 and set to expire March 30 2005. See Order No. 25793.
On March 22, 2005, the Commission issued a Notice of Application and solicited
comments regarding the proposed Agreement. See Order No. 29738. No comments were
received other than those submitted by Commission Staff. However, during the comment period
Idaho Power filed a Motion requesting that the Commission approve an extension of the existing
Firm Energy Sales Agreement pending approval of the new Agreement. The Commission
granted the Motion in a decision meeting on April 5, 2005.
THE AGREEMENT
Under the proposed Agreement, Pristine Springs will sell and Idaho Power will
purchase electric energy generated by the Pristine Springs hydroelectric generation facility. The
facility is located on Warm Creek, north of Twin Falls, Idaho in an area more particularly
described as the NE Y4 of the NW Y4 of Section 29, Township 9 South, Range 17 East, Boise
Meridian, Jerome County, Idaho. The Pristine Springs facility will be a qualified small power
production facility (QF) under the applicable provisions of the Public Utility Regulatory Policies
Act of 1978 (PURP A).
DECISION MEMORANDUM
The Pristine Springs facility consists of a single hydroelectric generation unit. The
nameplate rating and maximum generation capability of the Pristine Springs facility is 125 kW.
The Agreement was developed pursuant to Commission Order Nos. 29632 (Us.
Geothermal et al. v. Idaho Power) and 29646 (setting avoided costs effective December 1
2004). In the proposed Agreement, the parties agree to a ten-year contract term and to use the
non-Ievelized published avoided cost rates as currently established by the Commission for
energy deliveries of no more than 10 average MW.
Because the Pristine Springs facility is currently interconnected and selling energy to
Idaho Power under an existing agreement, interconnection to the Company s distribution system
is completed. The previously established interconnection costs set out in the existing agreement
will be used to value the interconnection costs under the proposed Agreement. The applicable
monthly Schedule 72 charges will apply.
STAFF COMMENTS
Staff reviewed the Agreement and found that it comports with the terms and
conditions of Commission Order Nos. 29632 (Us. Geothermal) and 29646 (2004 avoided costs).
Staff confirmed that the contract is for a ten-year term and contains the published non-Ievelized
avoided cost rates set forth in Order No. 29646. Staff recommended approval of the Agreement
as well as the Motion allowing Idaho Power to extend the existing firm energy sales agreement
pending Commission approval of the new Agreement. Nonetheless, Staff noted that Idaho
Power should make certain to submit its future PURP A contracts with sufficient time to allow
for a public comment period prior to any Commission decision.
COMMISSION DECISION
Does the Commission wish to accept Staff s recommendation and approve the Pristine
Springs Agreement as presented by Idaho Power?
~ro
Kira D e Pfisterer
DECISION MEMORANDUM