20130614Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
COMMISSION STAFF
FROM:CATULEEN MCHUGH
DATE:JUNE 11,2013
SUBJECT:CASE NO.IPC-E-06-34
INCLUSION OF OMITTED PRICING INFORMATION IN THE FIRM
ENERGY SALES AGREEMENT BETWEEN IDAHO POWER AND HOT
SPRINGS WINDFARM.
On May 14,2013,Idaho Power Company (Idaho Power;Company)submitted for
Commission approval an Application to include additional pricing information to the
December 20,2006,Firm Energy Sales Agreement (Agreement)between Idaho Power and Hot
Springs Windfarm.LLC (Hot Springs).The original Agreement is for a 20-year term and was
approved on February 20,2007,in Order No.30246.The First Amendment was approved on
August 8,2007,in Order No.30398.
BACKGROUND
In the original Agreement,Hot Springs selected December 31,2007 as the estimated
scheduled operation date for the Hot Springs Windfarm Project (Project).The pricing schedule
contained in that Agreement extended 20 years from that date (through 2027).In the First
Amendment,Hot Springs and Idaho Power agreed to amend the original Agreement to extend the
scheduled operation date for a period of approximately one year.However,at that time,the
pricing schedule in the Agreement was not updated to reflect the new scheduled operation date.
In April 2013,Hot Springs notified Idaho Power that the 20-year pricing schedule did not
extend for the full term of the Agreement.The pricing contained in the Agreement is based upon
the standard published avoided cost rates in effect at the time the Agreement was executed and in
accordance with Order No.29646.On May 3,2013,Idaho Power provided Hot Springs with a
DECtSION MEMORANDUM 1 JUNE 11,2013
letter setting forth the pricing to be applied to the last 12 months of the term of the Agreement
based upon the standard published avoided cost rates in effect at the time.
STAFF REVIEW
Idaho Power states in its Application that the Company attempted to notify’the
Commission of its additional pricing by letter.Commission Staff requested that Idaho Power file
an application seeking Commission approval of the pricing and verifying that Hot Springs
acquiesced in the pricing additions.Staff has verified that the prices provided by Idaho Power are
based upon the standard published avoided cost rates in effect at the time and in accordance with
OrderNo.29646.In addition,the Commission was notified by a letter dated May 31,2013,that
1-lot Springs agrees,understands and accepts the updated pricing.
STAFF RECOMMENDATION
Stall recommends that the Commission approve the inclusion of these additional prices
into the terms of the Agreement between Idaho Power and Hot Springs without further process.
COMMISSION DECISION
Does the Commission wish to approve,without further process,the inclusion of pricing
information so that the pricing schedule extends through the full term of the Agreement?
c&ttu 4ptL
Cathieen McHugh
iudrncrnosil,ot sprinus (2)doc
DECISION MEMORANDUM 2 JUNE Ii,2013