20051206final_order_no_29928.pdf

Office of the Secretary
Service Date
December 6, 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 G2 ENERGY HIDDEN HOLLOW LLC
CASE NO. IPC-O5-
ORDER NO. 29928
On October 19, 2005 , Idaho Power Company (Idaho Power) filed its Application for
approval of a 20-year Firm Energy Sales Agreement (Agreement) for the sale and purchase of
electric energy with G2 Energy Hidden Hollow, LLC, a Georgia limited liability company (G2).
Under the Agreement, G2 will sell and Idaho Power will purchase electric energy generated by the
Hidden Hollow Landfill Gas Project located at Ada County s Hidden Hollow Landfill near Boise
(the Project). The nameplate rating ofthe Project is 3.2 MW.
The landfill gas project will be a qualified small power production facility (QF) under
the applicable provisions of the Public Utility Regulatory Policies Act of 1978 (PURPA). As
represented by Idaho Power, the Agreement with G2 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. G2 has selected March 1 2006 as the scheduled operation
date. The proposed effective date of the Agreement is October 11 2005.
On November 8, 2005, the Commission issued Notices of Application and Modified
Procedure in Case No. IPC-05-29. The deadline for filing written comments was November 29
2005. Comments were filed by Commission Staff and two interested members of the public. The
two comments from the public were both generally in favor of the Agreement.
Staff reviewed the Agreement and believes that it comports with the rates, terms and
conditions of Commission Order No. 29632 (Us. Geothermal, et al. v. Idaho Power) and avoided
cost Order No. 29646. Because the Project will utilize landfill gas as its fuel source, the
Commission s recent Order (Order No. 29839) temporarily restricting entitlement for wind
projects does not apply.
ORDER NO. 29928
In its comments, Staff noted that to its knowledge, the Project will be the first electrical
generation facility in the State to use landfill gas as its source. Staff is uncertain as to whether the
fuel supply will diminish over time and whether the Project can continue to produce its rated
output over the 20-year life of the Agreement. Staff is also uncertain as to whether the facility
equipment will endure over the full term of the Agreement. Nevertheless, because this is a non-
levelized Agreement, there will be no overpayment liability and thus no risk to Idaho Power or its
ratepayers if the Agreement is terminated early. Staff recommended that the Agreement be
approved.
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 G2 for Commission consideration and approval. The Agreement is
for a 3.2 MW Landfill Gas Project located in Ada County s Hidden Hollow Landfill near Boise.
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.
The Commission finds that the Agreement submitted in this case contains acceptable
contract provisions and includes the non-Ievelized 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.IDAP A 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 LA W
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).
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 NO. 29928
ORDER
IT IS HEREBY ORDERED and the Commission does hereby approve the October 11
2005 Firm Energy Sales Agreement between Idaho Power Company and G2 Energy Hidden
Hollow 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 ~ 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
(p t-11
day of December 2005.
1J~
MARSHA H. SMITH, COMMISSIONER
ATTEST:
ll
Commission Secretary
O:IPC-05-29 _cg2
ORDER NO. 29928