20050331Comments.pdf

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KIRA DALE PFIS TERER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 6571
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UT1L\ltS COt1~1fSSION
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
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 PRISTINE SPRINGS, )
INC. FOR PRISTINE SPRINGS #3
CASE NO. IPC-O5-
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
attorney of record, Kira Dale Pfisterer, Deputy Attorney General, and in response to the Notice
of Application, Notice of Modified Procedure and Notice on Comment Deadline issued on
March 21 2005 , submits the following comments.
BACKGROUND
On March 4 , 2005 , Idaho Power Company (Idaho Power or Company) filed an
Application requesting approval of a Firm Energy Sales Agreement (Agreement) between Idaho
Power and Pristine Springs, Inc. for Pristine Springs #3 (Pristine Springs #3) dated February 18
STAFF COMMENTS MARCH 31 , 2005
2005. Under the Agreement, Pristine Springs #3 will sell and Idaho Power will purchase electric
energy generated by the Pristine Springs #3 hydroelectric generation facility located on Warm
Creek, north of Twin Falls, Idaho in an area more particularly described as the NW If4 of Section
, Township 9 South, Range 17 East, Boise Meridian, Jerome County, Idaho. The Pristine
Springs #3 facility consists of a single 200 kW hydroelectric generation unit. The nameplate
rating and maximum generation capability of the Pristine Springs #3 facility is 200 kW.
The Pristine Springs #3 facility 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 No. 29632 (Us.
Geothermal et at. v. Idaho Power) and Order No. 29646 (avoided cost) to replace the existing
Schedule 86 agreement for this facility. In the 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 average MW.
Because the Pristine Springs #3 facility is currently interconnected and selling energy
to Idaho Power under a Schedule 86, non-firm agreement, interconnection to the Company
distribution system is completed. The previously established interconnection costs set out in the
Schedule 86 agreement will be used to value the interconnection costs under the proposed
Agreement. The applicable monthly Schedule 72 charges will apply.
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 #3 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 ANALYSIS
Staff has reviewed the Agreement between Idaho Power and Pristine Springs #3 and
finds that it comports with the terms and conditions of Commission Order No. 29632 (Us.
Geothermal et at. v. Idaho Power) and avoided cost Order No. 29646. The contract is for a ten-
year term and contains the published non-Ievelized avoided cost rates set forth in Order
No. 29646.
STAFF COMMENTS MARCH 31 , 2005
The parties executed the contract on February 18 2005. This contract was submitted
contemporaneously with a similar contract for the Pristine Springs Project; however, there is one
distinct difference. This Agreement, Pristine Springs #3, is intended to replace an existing
Schedule 86 Uniform Agreement, whereas the Pristine Springs agreement is intended to replace
an existing 10-year Firm Energy Sales agreement.Because there is no generation commitment
under a Schedule 86 Uniform Agreement, such an agreement can be terminated at any time.
Under the terms of this Agreement for Pristine Springs #3 , the Schedule 86 Uniform Agreement
will be terminated effective as of the Operation Date of the Project-whenever it occurs. Thus
Schedule 86 rates should continue to be paid until the Pristine Springs #3 Project achieves its
Operation Date as defined in the contract.
RECOMMENDATION
Staff recommends approval of the Pristine Springs #3 Agreement as presented by Idaho
Power.
Respectfully submitted this ~lsr day of March 2005.
(JJ.
Kira Dale Pfist
Deputy Attorney General
Technical Staff:Rick Sterling
i:umisc:comments/ipceO5.12kfrps
STAFF COMMENTS MARCH 31 , 2005
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 31 sT DAY OF MARCH 2005
SERVED THE FOREGOING COMMENTS OF THE COMMISSION ST AFF, IN
CASE NO. IPC-05-, BY MAILING A COpy THEREOF POSTAGE PREPAID
THE FOLLOWING:
BARTON L KLINE
MONICA MOEN
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
RAND Y ALLPHIN
CONTRACT ADMINISTRATOR
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
WEND ELL STARKE
pros TINE SPRINGS IN
274 KAY DR
TWIN FALLS ID 83301
Jo .d2v7f!.
SECRET
CERTIFICATE OF SERVICE