20051129Comments.pdf

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CECELIA A. GASSNER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BAR NO. 6977
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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 APPROV AL )
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-
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
attorney of record, Cecelia A. Gassner, Deputy Attorney General, and in response to the Notice
of Application and Notice of Modified Procedure issued in Order No. 29907 on November 8
2005 , submits the following comments.
BACKGROUND
On October 19 , 2005 , Idaho Power Company (Idaho Power; Company) filed an
Application with the Idaho Public Utilities Commission (Commission) requesting 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
STAFF COMMENTS NOVEMBER 29, 2005
Hollow Landfill Gas Project, located at Ada County s Hidden Hollow Landfill near Boise (the
Project). The nameplate rating of the Project is 3.2 MW. Under normal and/or average
conditions, the Project's generation will not exceed 10 aMW on a monthly basis. The
Agreement is for a 20-year term and contains the published non-Ievelized avoided cost rates set
forth in Order No. 29646.
STAFF ANALYSIS
As represented, G2 will be a qualified small power production facility (QF) under the
applicable provisions of the Public Utility Regulatory Policies Act of 1978 (PURP A). G2 has
selected March 1 , 2006 as the scheduled Operation Date for this facility.
Staff has 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 to published avoided cost rates does not apply.
To Staffs 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 s equipment will
endure over the full term of the Agreement. Nevertheless, because this is a non-Ievelized
Agreement, there will be no overpayment liability and thus no risk to Idaho Power or its
ratepayers if the Agreement is terminated early.
Section 24 ofthe Agreement provides that the Agreement will not become effective until
the Commission has approved all the Agreement's terms and conditions and declared that all
payments that Idaho Power makes to G2 for purchases of energy will be allowed as prudently
incurred expenses for ratemaking purposes. The proposed effective date of the Agreement is
October 2005.
STAFF COMMENTS NOVEMBER 29, 2005
RECOMMENDATION
Staff recommends approval of the Agreement with an effective date of October 2005.
Respectfully submitted this
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day of November 2005.
Ceceha A. G sner
Deputy Attorney General
Technical Staff: Rick Sterling
i :umisc:comments/ipceO5 .29cgrps
STAFF COMMENTS NOVEMBER 29, 2005
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 29TH DAY OF NOVEMBER 2005
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-05-, BY MAILING A COpy THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
BARTON L KLINE
MONICA MOEN
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
RANDY ALLPHIN
CONTRACT ADMINISTRATOR
IDAHO POWER CaMP ANY
PO BOX 70
BOISE ID 83707-0070
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SECRET AR
CERTIFICATE OF SERVICE