20050315Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:KIRA DALE PFISTERER
DATE:MARCH 14, 2005
RE:CASE NO. IPC-05-
FIRM ENERGY SALES AGREEMENT-PRISTINE SPRINGS #3
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. Under the Agreement, Pristine Springs will sell and Idaho Power will
purchase electric energy generated by the Pristine Springs hydroelectric generation facility #3
located on Warm Creek, north of Twin Falls, Idaho in an area more particularly described as the
NW
y,.
of Section 19, Township 9 South, Range 17 East, Boise Meridian, Jerome County, Idaho.
The Pristine Springs facility #3 consists of a single 200 kW hydroelectric generation unit. The
nameplate rating and maximum generation capability of the Pristine Springs facility #3 is 200
kW.
THE AGREEMENT
The Pristine Springs facility #3 will be a qualified small power production facility
(QF) under the applicable provisions of the Public Utility Regulatory Policies Act of 1978
(PURPA). The Agreement was developed pursuant to Commission Order Nos. 29632 (V.
Geothermal et al. v. Idaho Power) and 29646 (avoided cost) and will replace the previously
approved Schedule 86, Uniform Agreement for the sale of non-firm energy dated March 23
2003. See Order No. 29234. In the proposed Agreement, the parties agree to a ten-year contract
term and to use the non-levelized published avoided cost rates as currently established by the
Commission for energy deliveries of no more than 10 aMW.
Because the Pristine Springs facility #3 is currently interconnected and selling energy
to Idaho Power under an existing Schedule 86, non-firm agreement, interconnection to the
DECISION MEMORANDUM
Company s distribution system is completed. The previously established interconnection costs
set out in the Schedule 86 will be used to value the interconnection costs under the proposed
Agreement. The applicable monthly Schedule 72 charges will apply.
Within the proposed Agreement, various requirements have been placed upon Pristine
Springs in order for Idaho Power to accept energy deliveries from the Pristine Springs facility #3.
Idaho Power proposes to monitor compliance with these initial requirements and, once the
requirements have been met, the existing Schedule 86 agreement will be terminated.
As reflected in Article 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 Pristine Springs 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.
STAFF RECOMMENDATION
The Commission Staff recommends that the Application be processed under Modified
Procedure, i., by written submission rather than a hearing. IDAP A 31.01.01.201-204.
COMMISSION DECISION
Does the Commission wish to process the Idaho Power Pristine Springs #3 Firm
Energy Sales Agreement under Modified Procedure?
Kira Dale Pfisterer
M:IPCEO512 - kdp
DECISION MEMORANDUM