20070918notice_of_modified_procedure_ipc2.pdf

Office of the Secretary
Service Date
September 18 2007
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR CASE NO. IPC-O6-
APPROVAL OF A FIRM ENERGY SALES
AGREEMENT FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY
BETWEEN IDAHO POWER COMPANY
AND HOT SPRINGS WINDFARM LLC
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR CASE NO. IPC-O6-
APPROVAL OF A FIRM ENERGY SALES
AGREEMENT FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY NOTICE OF MOTION FOR
BETWEEN IDAHO POWER COMPANY APPROVAL OF GENERATION
AND BENNETT CREEK WINDFARM LLC INTERCONNECTION
AGREEMENTS
NOTICE OF
MODIFIED PROCEDURE
NOTICE OF
COMMENT/PROTEST DEADLINE
YOU ARE HEREBY NOTIFIED that on September 12, 2007, Idaho Power
Company (Idaho Power; Company) filed Motions with the Idaho Public Utilities Commission
(Commission) in Case Nos. IPC-06-34 and IPC-06-35 requesting approval of Generation
Interconnection Agreements (GIA) dated September 13, 2007 between the Company and Hot
Springs Windfarm LLC (Hot Springs) and Bennett Creek Windfarm LLC (Bennett Creek).
Interconnection service will be provided at 138 kV for the integration of 24 induction generator
wind turbines for Bennett Creek/Hot Springs Windfarms. The project's location is (Township
, Range 8E, Section 23) Elmore County, Idaho. The total project output is 39.6 MW. Total
transmission network upgrades (special facilities) cost is estimated to be $2 155 000. The
milestone date for construction completion is March 15 2008.
NOTICE OF MOTION FOR APPROV AL OF
GENERATION INTERCONNECTION AGREEMENTS
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
Firm Energy Sales Agreements (and First Amendments) were earlier approved by the
Commission between Idaho Power and Hot Springs in Case No. IPC-06-34 (Order Nos. 30246
and 30398) and Bennett Creek in Case No. IPC-06-35 (Order Nos. 30245 and 30399).
The Generation Interconnection Agreements are the first involving PURP A
generating facilities subject to Idaho Power Schedule 72 outside of the Twin Falls queue which
involve substantial upgrades to Idaho Power s transmission system. The allocation of costs from
the transmission upgrades for the two projects was not addressed in Commission Order No.
30414 in Case No. IPC-06-21 (the Cassia Gulch Wind Park and Cassia Wind Farm
(collectively Cassia) case).
In the Cassia case, the Commission approved a settlement which implemented a cost-
sharing arrangement (Cassia Formula) under which Idaho Power will contribute 25% of the cost
of the needed transmission upgrades, Cassia will make a non-refundable 25% contribution in aid
of construction (CIAC) to support the transmission upgrades and Cassia will make an advance in
aid of construction (AIAC) for the remaining balance of the cost ofthe upgrades. The AIAC will
be refunded to the Cassia projects over time if they fully perform their Firm Energy Sales
Agreements with Idaho Power.
In Order No. 30414, the Commission concluded that use of the Cassia Formula was
appropriate for the Cassia Wind Farms as well as the other PURP A generation projects in the
Twin Falls 138 kV transmission queue. However, the Commission did not authorize the
Company to automatically apply the Cassia Formula in other locations on its system where
transmission upgrades would be required. Instead, the Commission indicated that the application
of any terms or conditions approved as a part of the settlement in the Cassia case to other QF
interconnection requests "will depend on the specific characteristics of that situation." Order No.
30414, p. II.
In the GIAs between Idaho Power and Bennett Creek and Hot Springs, the parties
have agreed to apply the Cassia Formula to share the costs of the transmission upgrades.
In concluding that it is appropriate to use the Cassia Formula for sharing costs of
transmission upgrades, Idaho Power applied the Commission findings and conclusions in Order
No. 30414 as follows:
NOTICE OF MOTION FOR APPROVAL OF
GENERATION INTERCONNECTION AGREEMENTS
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
1. But for the construction of the Hot Springs and Bennett Creek
Windfarms, Idaho Power would not have constructed the transmission
upgrades described in the Generator Interconnection Agreements to
provide adequate service to its native load customers. Therefore, a
contribution by the developers of a portion of the transmission upgrade
cost is appropriate.
2. Idaho Power believes that in Order No. 30414, the Commission directed
the Company to assess the benefits of individual transmission upgrades
taking into consideration "the system wide benefits that accrue to all
customers on an integrated transmission grid." Order No. 30414, p. 10.
One way to approach that assessment is to compare the level of benefits
that the upgrades will provide to the system with the level of benefits
provided in the Cassia case. The Company acknowledges that it is nearly
impossible to precisely quantify the relative system benefits conferred by
two -distinct and geographically separate transmission upgrades.
However, transmission engineers can exercise their judgment and their
knowledge of transmission systems they have designed and operate.
Based on their informed judgment, Idaho Power s transmission engineers
are of the opinion that the transmission upgrades identified in the GIAs
will provide different benefits than the transmission system benefits the
Cassia upgrades will provide. Where the Cassia upgrade will install a
new transformer to interconnect the 230 and 138 kV transmission
systems in the western portion of the Magic Valley, the improvements
contemplated herein will upgrade (replace the line conductor) and update
(replace poles, insulators and hardware not capable of supporting the
larger conductor) an older transmission line. Some facilities on the line
interconnecting the Bennett Creek and Hot Springs projects may have
been providing service since 1921. The use of the Cassia Formula is
reasonable in this circumstance.
3. The Company is also of the opinion that the application of the Cassia
Formula in this case will maintain the balance between "the benefits
accruing to the customers of the grid with the cost responsibility of the
QF necessitating the timing and the construction of the upgrade." Order
No. 30414, p. II.
4. Hot Springs and Bennett Creek, like the QF projects in the Twin Falls
queue, will displace or defer the need for other or similar generation
projects in the Company s Integrated Resource Plan (IRP) that would
likely require related transmission investment by the Company. Order
No. 30414, p. II.
NOTICE OF MOTION FOR APPROVAL OF
GENERA TION INTERCONNECTION AGREEMENTS
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
5. Idaho Power believes that application of the Cassia Formula in this
instance will allow it to successfully defend a comparability claim
brought by Federal Energy Regulatory Commission (FERC)
jurisdictional customer claiming that Idaho Power and the Commission
had given unlawful, preferential treatment to QF resources.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filings of
record in Case Nos. IPC-06-34 and IPC-06-35 including the previously approved Firm
Energy Sales Agreements and First Amendments. The Commission has preliminarily found that
the public interest regarding the Company s Motions for Approval of Generation Interconnection
Agreements (GIA) between the Company and Hot Springs and Bennett Creek may not require a
hearing to consider the issues presented and that the issues raised may be processed under
Modified Procedure, Le., by written submission rather than by hearing. Reference Commission
Rules of Procedure, IDAPA 31.01.01.201-204.
YOU ARE FURTHER NOTIFIED that the deadline for filing written comments or
protests with respect to Idaho Power s Motion and the use of Modified Procedure in Case Nos.
IPC-06-34 and IPC-06-35 is Thursday, October 4, 2007.
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(s) 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(s) based on the written positions before it. Reference
IDAP A 31.01.01.204.
YOU ARE FURTHER NOTIFIED that written comments concerning Case Nos. IPC-
06-34 and IPC-06-35 should be mailed to the Commission and 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:
Barton L. Kline, Senior Attorney
Lisa D. Nordstrom, Attorney II
Idaho Power Company
1221 W. Idaho Street (83702)
PO Box 70
Boise, ID 83707-0070
E-mail: bkline(g?idahopower .com
lnordstrom(g?i dahopower. com472 W. Washington Street
Boise, ID 83702-5983
NOTICE OF MOTION FOR APPROVAL OF
GENERATION INTERCONNECTION AGREEMENTS
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
All comments should contain the case captions and case numbers 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 numbers as they appear on the front of this
document. These comments must also be sent to Idaho Power at the e-mail addresses listed
above.
YOU ARE FURTHER NOTIFIED that the Motions in Case Nos. IPC-06-34 and
IPC-06-35 may be viewed at www.puc.idaho.gov by clicking on "File Room" and "Electric
Cases " or can be viewed during regular business hours at the Idaho Public Utilities Commission
472 W. Washington Street, Boise, Idaho and at the general business office of Idaho Power
Company, 1221 West Idaho Street, Boise, Idaho.
DATED at Boise, Idaho this
g'f'/.. day of September 2007.
~IG ~Q(Je D. Jewell
Commission Secretary
bls/N:IPC-06-34 - IPC-06-35 - sw
NOTICE OF MOTION FOR APPROV AL OF
GENERATION INTERCONNECTION AGREEMENTS
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE