20060602notice_of_petition_for_declaratory_order.pdf

Office of the Secretary
Service Date
June 2, 2006
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF
MAGIC WIND LLC TO DETERMINE
EXEMPTION STATUS
BACKGROUND
CASE NO. IPC-O5-
NOTICE OF PETITION FOR
DECLARATORY ORDER
NOTICE OF
MODIFIED PROCEDURE
NOTICE OF
COMMENT /PROTEST
DEADLINE
On August 4, 2005, the Idaho Public Utilities Commission (Commission) in Case
No. IPC-05-, Order No. 29839, reduced the eligibility cap for avoided cost published rates
for non-firm wind projects from 10 aMW to 100 kW, required individual negotiation for larger
wind qualifying facilities (QFs), and established criteria for assessing QF contract entitlement.
Reference Public Utility Regulatory Policies Act of 1978 (PURP A). By Commission Order No.
29872 the date for grandfathering eligibility was changed from July 1 , 2004, the Notice of
Petition date, to August 4 2005, the date oflnterlocutory Order No. 29839.
On October 20, 2005 , Magic Wind LLC (Magic Wind) filed a Motion to Determine
Exemption Status with the Commission seeking a Commission determination that Magic Wind
was exempt from the rate eligibility cap established in Order No. 29839. The Motion was
accompanied by the supporting affidavit of Armand Eckert.
On November 4, 2005, Idaho Power Company (Idaho Power; Company) filed a
response to Magic Wind's Motion contending that the Company was without sufficient
information to verify the truth or falsity of the factual allegations contained in the affidavit of
Armand Eckert and was therefore denying same and requesting that the Motion be denied.
Following Idaho Power s response, there was an informal stay of proceedings.
NOTICE OF PETITION FOR
DECLARATORY ORDER
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
PETITION FOR DECLARATORY ORDER
YOU ARE HEREBY NOTIFIED that on April 26, 2006, Magic Wind requested a
Declaratory Order declaring that Magic Wind is entitled to receive from Idaho Power a Purchase
Power Agreement that establishes prices for surplus energy using the "modified PacifiCorp
method.Reference Order. No. 30000 , Case No. P AC-05-6 (Schwendiman); Reference
IDAP A 31.01.01.101 - Petition for Declaratory Order.
In Case Nos. IPC-04-8 and 04-, Order No. 29632, the Commission established a
90/110 performance band" requirement, a provision that defines the minimum degree of
predictability required for published rate eligibility. Under PURP A contracts submitted by Idaho
Power and approved by the Commission, the price to be paid for energy purchases outside of the
performance band is equal to 85% of the Mid-C market index price for each month. In Order
No. 30000, Case No. P AC-05-9 (Schwendiman) the Commission approved an alternate
mechanism (PacifiCorp method) for pricing energy deliveries that are outside the "90/110
performance band." The Schwendiman Agreement includes a computed set of fixed rates (Non-
Conforming Energy Purchase Prices) as a substitute for market-based rates.
Under a proposed Agreement submitted by Magic Wind to Idaho Power on April 5,
2006, Magic Wind submitted an Idaho Power template contract that was modified to include a
PacifiCorp-Schwendiman type fixed price mechanism for energy deliveries outside the 90/110
performance band, albeit proposing a different calculation of variable O&M expense (modified
PacifiCorp method).
Idaho Power by letter response dated April 25, 2006 states its belief that the draft
contract presented by Magic Wind on April 5 , 2006 fails to acknowledge the role that market
prices play in determining the cost Idaho Power is likely to incur should the Magic Wind project
fail to perform in accordance with the terms of the Agreement. The change that Magic Wind
proposes, Idaho Power contends, eliminates consideration of market prices and the determination
of costs Idaho Power will incur if Magic Wind does not provide the monthly amount of energy it
agreed to provide. Idaho Power notes that the Schwendiman Order No. 30000 stated the
Agreement did not set precedent. Idaho Power contends that the Company has fully satisfied its
mandatory purchase obligation under PURP A by offering to purchase the generation from Magic
NOTICE OF PETITION FOR
DECLARA TORY ORDER
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
Wind's proposed wind farm by entering into a firm Energy Sales Agreement in the form
previously signed and tendered by Magic Wind on June 14 2005. Reference October 20, 2005
Affidavit of Armand Eckert, p. 2. It is Idaho Power s belief that elimination of market prices
from consideration will shift costs and risks to customers that should be appropriately borne by
Magic Wind and that such shift is inconsistent with PURP A. As a result, Idaho Power proposes
to utilize the template contract it has signed with numerous QFs similar to Magic Wind.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filings of
record in Case No. IPC-05-34. We have also reviewed our Order No. 29632 in Case Nos.
IPC-04-8 and 04-10 and Order No. 30000 in Case No. PAC-05-6. The Commission has
preliminarily determined that the public interest regarding Magic Wind's Petition for Declaratory
Order may not require a hearing to consider the issues presented and that issues raised by the
Petition may be processed under Modified Procedure , by written submission rather than by
hearing. Reference Commission s Rules of Procedure, IDAPA 31.01.01.201-204.
YOU ARE FURTHER NOTIFIED that as the subject matter of the Petition for
Declaratory Order may have generic ramifications, the Commission is serving copies of this
Notice on Avista Corporation dba Avista Utilities and PacifiCorp dba Rocky Mountain Power.
YOU ARE FURTHER NOTIFIED that the deadline for filing written comments or
protests with respect to Magic Wind's Petition for Declaratory Order and the use of Modified
Procedure in Case No. IPC-05-34 is Monday, June 26, 2006.
YOU ARE FURTHER NOTIFIED that the deadline for filing reply comments is
Monday, July 3, 2006.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the deadline, the Commission may consider the matter on its merits and may
enter its Order without a formal hearing. If comments or protests are filed within the deadline
the Commission will consider them and in its discretion may set the matter for hearing or may
decide the matter and issue its Order based on the written positions before it. Reference IDAP A
31.01.01.204.
YOU ARE FURTHER NOTIFIED that written comments concerning Case
No. IPC-05-34 should be mailed to the Commission, Idaho Power Company, and Magic Wind
LLC at the addresses reflected below.
NOTICE OF PETITION FOR
DECLARA TORY ORDER
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
For Magic Wind:
Street Address for Express Mail:
Dean 1. Miller
McDevitt & Miller, LLP
420 W. Bannock Street
PO Box 2564 (83701-2564)
Boise, ID 83702
E-mail: ioe~mcdevitt-miller.com472 W. Washington Street
Boise, ID 83702-5983
For Idaho Power Company:
Barton L. Kline, Senior Attorney
Monica B. Moen, Attorney II
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E- Mail: bkline~idahopower.com
mmoen(~jdahopower.com
John R. Gale, VP Regulatory Affairs
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E-mail: rgale~idahopower.com
Street Address for Express Mail:
1220 W. Idaho Street
Boise, ID 83702
All comments should contain the case caption and case number shown on the first page of this
document.
Persons desiring to submit comments via e-mail may do so by accessing the
Commission s home page located at www.puc.idaho.gov. Click the "Comments and Questions
icon, and complete the comment form, using the case number as it appears on the front of this
document.
YOU ARE FURTHER NOTIFIED that the Petition for Declaratory Order in Case
No. IPC-05-34 together with other filings of record in the case may be viewed during regular
business hours at the offices of the Idaho Public Utilities Commission, 472 West Washington
Street, Boise, Idaho and at the principal office of Idaho Power Company, 1220 West Idaho
NOTICE OF PETITION FOR
DECLARATORY ORDER
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
Street, Boise, Idaho. In addition, the Petition may be viewed by accessing the Commission
homepage at www.puc.idaho.gov by clicking on "File Room" and then "Electric Cases.
DATED at Boise, Idaho this ~Jvi.
, PRESIDENT
MARSHA H. SMITH, COMMISSIONER
DENNIS S. HAN E , COMMISSIONER
ATTEST:
if'nJe D. Jewell
Commission Secretary
bls!N:IPC-05-34 sw
NOTICE OF PETITION FOR
DECLARATORY ORDER
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE