20070126notice_of_modified_procedure_order_no_30230.pdf

Office of the Secretary
Service Date
January 26, 2007
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF A POWER PURCHASE
AGREEMENT WITH TELOCASET WIND
POWER PARTNERS, LLC AND TO
IN CL UD E THE ASSOCIATED EXPENSES IN
THE COMPANY'S ANNUAL POWER COSTADJUSTMENT.
CASE NO. IPC-06-
NOTICE OF
MODIFIED PROCEDURE
NOTICE OF
COMMENT DEADLINE
ORDER NO. 30230
On December 15, 2006, Idaho Power filed an Application seeking approval of a
Power Purchase Agreement (PP A) with Telocaset Wind Power Partners, LLC. Idaho Power
asked that the expenses associated with the purchase of capacity and energy from the PP A be
included in the Company s annual Power Cost Adjustment (PCA). The Company requested that
its Application be processed by Modified Procedure.
On December 27, 2006, the Commission issued a Notice of Application and set a
deadline of January 10, 2007, for interested parties to petition for intervention. No petitions for
intervention were filed. Staff recommended processing the Application by Modified Procedure.
With this Order the Commission authorizes the use of Modified Procedure and establishes a
deadline for the filing of written comments.
THE APPLICATION
YOU ARE HEREBY NOTIFIED that this PPA is the result of Idaho Power
Request for Proposals (RFP) for 200 MW of wind-powered generation that originated with the
Company s 2004 Integrated Resource Plan (IRP). Application at 2. The Company issued an
RFP for 200 MW of wind-powered generation on January 13 2005. Id. In September 2005, the
RFP was revised to ask for 100 MW, instead of the 200 MW level, because of the quantity of
wind the Company anticipated receiving from PURPA qualifying facilities (QFs). Id. at 3. In
June 2006, Telocaset Wind Power Partners of Houston, Texas was selected as the preferred
bidder of the 2005 Wind RFP process. !d.
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINE
ORDER NO. 30230
YOU ARE FURTHER NOTIFIED that, according to the Application, Idaho Power
and Telocaset concluded negotiation of this PP A in December 2006. Id. at 4. The PP
guarantees an output of 196 000 MWh (annually) and has a planned capacity of 100.65 MW. Id.
The term of the PP A is 20 years, with an option for Idaho Power to extend the term of the
Agreement an additional 10 years. Id. If Telocaset should wish to sell the facility, the PPA
provides Idaho Power with a first right of refusal. Id.
YOU ARE FURTHER NOTIFIED that the project is located in eastern Oregon, and
would deliver its energy to a point on the LaGrande-Brownlee 230 kV transmission line. Id. at 4.
The project is expected to have an output profile with higher output coinciding with the summer
and winter peak demand. Id.
YOU ARE FURTHER NOTIFIED that prices under the PPA adjust seasonally and
start at a base rate of $48.00/MWh with an annual escalation rate of 3%. Id. No payment is
required for energy deliveries in excess of the maximum contract amount and Idaho Power will
retain all green energy tags from the project. Id. The PP A also provides that Telocaset will
deliver detailed forecasting data, including wind velocity and duration, to Idaho Power. Id. The
data will include real time access to the forecasting service used by the project, including
forecasts of energy to be delivered during the next hour, next day, and next week. Id. This is
expected to assist Idaho Power when integrating the wind generation into the Company
resource supply mix. Id. at 5.
YOU ARE FURTHER NOTIFIED that the PPA contains provisions, similar to the
90/110 percent delivery provisions contained in Idaho Power s QF contracts, which would
provide for damages and caps. Id. The PP A also contains penalties should the project fail to
deliver the guaranteed annual output of 196 000 MWh. Id. Additionally, the obligations of the
project will be secured by a guaranty issued by Goldman Sachs. Id. Should the credit rating of
Goldman Sachs fall below a predetermined level, Goldman Sachs will be required to post a
liquid form of performance assurance. Id. The obligations of Idaho Power will be secured by
Idaho Power s balance sheet. Id. The PP A also provided for certain "bridge" financing to
Telocaset by Idaho Power to cover Telocaset's cost exposure to acquire certain long lead-time
items, such as a transformer and certain engineering and design expenditures, while the
Commission is considering this Application. Id. at 5-6. Idaho Power states it will establish a
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINE
ORDER NO. 30230
reserve account and fund the cost to enable Telocaset to proceed prior to approval of the
Application. Id. at 6.
YOU ARE FURTHER NOTIFIED that Idaho Power requests that the Commission
issue an order finding that the PP A is prudent and approving inclusion of the prudently incurred
power purchase expenses associated with the PP A in the Company s annual PCA. Id. Idaho
Power requests that its Application be processed by Modified Procedure. Id.
YOU ARE FURTHER NOTIFIED that the Application, supporting workpapers
testimonies and exhibits have been filed with the Commission and are available for public
inspection during regular business hours at the Commission offices.The Petition and
testimonies are also available on the Commission s Website at www.puc.idaho.gov under "File
Room.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filing of
record in Case No. IPC-06-31. The Commission has preliminarily determined that the public
interest may not require a hearing to consider the issues presented in this case and that issues
raised by the Company s filing may be processed under Modified Procedure , by written
submission rather than by hearing. IDAPA 31.01.01.201-204. In so doing, the Commission
notes that Modified Procedure and written comments have proven to be an effective means for
obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that the Commission may not hold a hearing in
this proceeding unless it receives written protests or comments opposing the use of Modified
Procedure and stating why Modified Procedure should not be used. IDAP A 31.01.01.203.
YOU ARE FURTHER NOTIFIED that if no protests or written comments are
received within the deadline, the Commission will consider the matter and enter its Order
without a hearing. If protests or comments are filed within the deadline, the Commission will
consider them and may, in its discretion, set the matter for hearing or decide the matter and issue
its Order on the basis of the written positions before it. IDAPA 01.01.01.204.
NOTICE OF COMMENT/PROTEST DEADLINE
YOU ARE FURTHER NOTIFIED that the deadline for filing written comments
or protests with respect to the Application and the Commission s use of Modified Procedure in
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINE
ORDER NO. 30230
Case No. IPC-06-31 is February 22, 2007. Persons desiring a hearing must specifically
request a hearing in their written protests or comments.
YOU ARE FURTHER NOTIFIED that written comments concerning this case
should be mailed to the Commission and to the Company at the addresses reflected below.
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Street Address For Express Mail:
472 W. Washington Street
Boise, ID 83702-5983
Monica B. Moen
Jim Miller
Ric Gale
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E-mail: mmoen~idahopower.com
imiller(~jdahopower.com
rgale~idahopower.com
document.
These comments should contain the case caption and case number shown on the first page of this
Persons desiring to submit comments via e-mail may do so by accessing the
Commission s homepage 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. These comments must also be sent to the Applicant at the address( es) listed above.
FINDINGS/CONCLUSIONS
The Idaho Public Utilities Commission has jurisdiction over Idaho Power Company,
its Application seeking approval of a Power Purchase Agreement, and the issues involved in this
case by virtue of Title 61 , Idaho Code, including Idaho Code ~~ 61-129, 61-301 , 302, 303 , 61-
502, and 61-503 , and the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
The Commission has preliminarily determined that the public interest may not
require a hearing to consider the issues presented in this case, and that issues raised by the
Company s filing may be processed under Modified Procedure , by written submission
rather than by hearing. IDAPA 31.01.01.201-204. In so doing, the Commission notes that
Modified Procedure and written comments have proven to be an effective means for obtaining
public input and participation.
ORDER
IT IS HERBY ORDERED that this case be processed by Modified Procedure.
Persons interested in submitting written comments regarding this case or protesting the use
Modified Procedure should do so no later than February 22 2007.
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINE
ORDER NO. 30230
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ;2.~
day of January 2007.
MARSHA H. SMITH, COMMISSIONER
~~~
ENNIS S. H NS , C MMISSIONER
ATTEST:
CommIssIOn Secretary
O:IPC-06-dw2
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINE
ORDER NO. 30230