20060630final_order_no_30089.pdf

Office of the Secretary
Service Date
June 30, 2006
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 CKTVI ENERGY, LLC
ORDER NO. 30089
CASE NO. IPC-06-
On April 28 , 2006, Idaho Power Company ("Idaho Power" or "Company ) filed an
Application with the Idaho Public Utilities Commission ("Commission ) requesting approval of
a Firm Energy Sales Agreement (Agreement) between Idaho Power and CKTVI Energy, LLC
CKTVl") dated April 28 , 2006. According to the Application, CKTVI proposed to design
construct, install, own, operate and maintain an anaerobic digester gas-to-energy generating
facility to be located near Caldwell, Idaho (the "Facility ). Under the Agreement, CKTVI
would sell and Idaho Power would purchase electric energy generated by CKTVl's Treasure
Valley 1 Facility. The sum of the nameplate ratings of the single or multiple reciprocating
engine generation sets shall not exceed 3.2 MW.
On May 26, 2006, the Commission issued a Notice of Application and Modified
Procedure requesting any comments to the matter. See Order No. 30054. In addition to
comments filed by Staff, the Commission received four comments from members of the general
public.
As represented, the Facility will be a qualified small power production facility (QF)
under the applicable provisions of the Public Utility Regulatory Policies Act of 1978 (PURP A).
Idaho Power contends that the Agreement 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 Agreement is for a 20-year term and contains the published non-Ievelized
avoided cost rates set forth in Order No. 29646. CKTVI has selected March 31 , 2007 as the
scheduled operation date for the Facility.
COMMENTS
Based upon its review, Staff believes that the Agreement between CKTVI and Idaho
Power comports with the terms and conditions of Commission Order No. 29632 (Us.
ORDER NO. 30089
Geothermal, et al. v. Idaho Power). Section 24 of the 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 CKTVI for purchases of
energy will be allowed as prudently incurred expenses for ratemaking purposes. Staff
recommended approval of the Agreement.
All of the comments received from the general public voiced support of the
Application and using the biomass waste to generate electrical power. Commenters supported
the project as a way to lessen our dependence on fossil fuels, and suggested that recycling
biomass waste may lead to less air pollution.
COMMISSION FINDINGS
The Commission has reviewed the filings of record in Case No. IPC-06-
including the underlying Agreement and filed comments. Idaho Power has presented a Firm
Energy Sales Agreement with CKTV 1 for Commission consideration and approval.The
Agreement is for an anaerobic digester gas-to-energy generating facility to be located near
Caldwell, Idaho.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 cost rates approved by the Commission.
The Commission finds that the Agreement submitted in this case contains acceptable
contract provisions and includes the non-levelized 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. IDAPA 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 LAW
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. 30089
ORDER
IT IS HEREBY ORDERED that the Commission approves the April 28 , 2006 Firm
Energy Sales Agreement between Idaho Power Company and CKTVI Energy, 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 30
#--
day of June 2006.
PAUL K
MARSHA H. SMITH, COMMISSIONER
ATTEST:
~L\)rf.~Je . Jewell
Co mISSIOn Secretary
O:IPC-06-cg2
ORDER NO. 30089