HomeMy WebLinkAbout20061212Decision memo.pdfDECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DATE:NOVEMBER 27 2006
SUBJECT:CASE NO. IPC-06-29 (Idaho Power)
AGREEMENT FOR SALE AND PURCHASE OF SURPLUS ENERGY
IDAHO POWER! AMALGAMATED SUGAR (T ASCO)
On November 21 , 2006, Idaho Power Company (Idaho Power; Company) filed an
Application with the Idaho Public Utilities Commission (Commission) requesting approval of an
Agreement for Sale and Purchase of Surplus Energy (Agreement) between Idaho Power and
Amalgamated Sugar Company LLC (T ASCO) under which Idaho Power agrees to purchase
surplus electric energy up to 3 MW from T ASCO's refined sugar production facility in Twin
Falls at prices that are less than market-based non-firm energy prices.
The submitted Agreement dated November 20, 2006 replaces a prior Agreement
dated August 2001. The prior surplus energy agreement was approved by the Commission in
Order No. 28910 dated December 6, 2001. The prior agreement was for a five-year term that
expired in August 2006. The initial term of the new Agreement is for one contract year. The
Agreement renews automatically from year to year unless terminated pursuant to contractual
notice requirements.
As reflected in the Application, Idaho Power states that negotiation of the Agreement
and execution of the Agreement by T ASCO predated Order No. 30179 issued by the
Commission in Case No. IPC-06-, the Company s Application for authority to institute a
uniform Schedule 72 interconnection agreement. Therefore, the Agreement, the Company states
does not include the modifications approved in that Order.
DECISION MEMORANDUM
Idaho Power under the Agreement will purchase up to 3 MW of surplus electric
energy generated by the electric generating equipment located at the T ASCO Twin Falls plant.
The energy purchased will be surplus energy not otherwise consumed by T ASCO at the Twin
Falls plant. Electric energy to be sold under the Agreement is non-firm energy and will only be
available if T ASCO does not consume the electric energy in the Twin Falls plant. The surplus
energy to be purchased from TASCO is priced at 85% of the monthly weighted average non-firm
Dow Jones Mid-Columbia Index Price. Setting the purchase price at a discount from market
price, Idaho Power contends, assures that when the Company needs the energy, the price will
always be more attractive than buying from the market. When it does not need the power, Idaho
Power should be able to resale the energy at the higher wholesale market price.
Idaho Power requests that the Agreement be approved without change or condition
and requests a Commission determination that all payments for purchases of energy incurred
under the Agreement be allowed as prudently incurred expenses for ratemaking purposes.
Should the Commission approve the Agreement, Idaho Power intends to consider the effective
date of the Agreement to be November 20, 2006.
CO MMISSI ON D ECISI
Staff recommends that the Company s Application be processed pursuant to
Modified Procedure, i., by written submission rather than by hearing. Reference Commission
Rules of Procedure IDAPA 31.01.01.201-204. Does the Commission find the proposed
procedure to be acceptable?
Scott D. Woodbury
bls/M:IPC-O6-29 sw
DECISION MEMORANDUM