20060526Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:CECELIA A. GASSNER
DATE:MAY 25, 2006
SUBJECT:IN THE MATTER OF THE APPLICATION OF IDAHO POWER
COMPANY FOR APPROVAL OF A FIRM ENERGY SALES
AGREEMENT WITH CASSIA GULCH WIND PARK, LLC, CASE NO.
IPC-06-
On April 20 , 2006, Idaho Power Company ("Idaho Power" or "Company ) filed an
Application requesting approval of a Firm Energy Sales Agreement dated April 7, 2006 with
Cassia Gulch Wind Park, LLC ("Cassia Gulch"). Under the Agreement, Cassia Gulch would sell
and Idaho Power would purchase electric energy generated by Cassia Gulch's wind generating
facility near Hagerman, Idaho. The Company asks the Commission approve the Agreement and
declare that all payments for purchases of energy under the Agreement be allowed as prudently
incurred expenses for ratemaking purposes.
THE AGREEMENT
According to the Application, Cassia Gulch proposes to design, construct, install
own operate and maintain an 18.9 MW wind generating facility near Hagerman, Idaho (the
Facility ). The Facility will be a qualified small power production facility under the applicable
provisions of the Public Utility Regulatory Policies Act of 1978 ("PURP A"
Under the terms of the Agreement, Cassia Gulch has elected to enter into the
Agreement with Idaho Power for a 20-year term. Cassia Gulch further elected to contract with
the Company using the non-Ievelized published avoided cost rates as currently established by the
Commission for energy deliveries ofless than 10 aMW. All applicable interconnection charges
and monthly operation and maintenance charges under Schedule 72 will be assessed Cassia
Gulch.
DECISION MEMORANDUM
Cassia Gulch has elected August 31 , 2006 as the scheduled first energy date and
December 31 , 2006 as the scheduled operation date for the Facility. Certain requirements have
been placed on Cassia Gulch for Idaho Power to accept energy deliveries from the Facility.
Idaho Power will monitor compliance with these initial requirements, as well as ongoing
requirements throughout the term of the Agreement.
ST AFF RECOMMENDATION
Staff recommends the Company s Application be processed by Modified Procedure
with a 14-day comment period. This should allow sufficient time for interested parties to review
the Company Application and file their comments with the Commission. Reference
Commission Rules of Procedure, IDAPA 31.01.01.201-.204.
COMMISSION DECISION
Does the Commission preliminarily find that the public interest may not require a
hearing to consider the issues presented in this case, and that this case is appropriate for
Modified Procedure pursuant to' Commission Rules of Procedure 201 through 204?
Does the Commission approve of a comment period of 14 days?
M:IPC-O6-
DECISION MEMORANDUM