20070723Idaho Winds LLC comments.pdf

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Idaho Winds LLc
19 July 2007
Idaho Public Utilities Commission
472 West Washington Street
O. Box 83720
Boise, Idaho 83720-0074
Sent via e~mail to jean.jewell~puc.idaho.gov
Attention: Ms. Jean Jewell, Secretary
Subject: Case No. IPC-06-, Hot Springs Windfarm , LLC
./Case No. IPC-06-, Bennett Creek Windfarm , LLC
Comments of Idaho Winds LLC
First Amendments to Firm Energy Sales Agreements
Dear Ms. Jewell:
Please find attached for filing in the above referenced matters the Comments of Idaho Winds
LLC ("Comments") to Idaho Power Company s July 11 , 2007 Motions for Approval of
Amendments of Firm Energy Sales Agreements in connection with the Hot Springs Windfarm
and Bennett Creek Windfarm projects.
An original and seven (7) copies of our Comments for each Case are also being sent to you via
S. mail.
Please contact me if you have any questions at 925.388.0072.
Sincerely,
Idaho Winds LLC ~..?D"_--'
William Damon
Vice President
5356 N. Cattail Way. Boise, Idaho 83714
phone [phone] . e-mail wd~powerworks.com . www.powerworks.com
William Damon , Vice President
Idaho Winds LLC
5356 N. Cattail Way
Boise , Idaho 83714
Phone: [phone]
Fax: [phone]
wd(fYpowerworks.com
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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 HOT
SPRINGS WINDFARM , LLC
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
BENNETT CREEK WINDFARM, LLC
CASE NO. IPC-O6-
COMMENTS OF IDAHO WINDS LLC
TO IDAHO POWER'S MOTION FOR
APPROVAL OF AMENDMENT OF
FIRM ENERGY SALES
AGREEMENT
CASE NO. IPC-O6~
COMMENTS OF IDAHO WINDS LLC
TO IDAHO POWER'S MOTION FOR
APPROVAL OF AMENDMENT OF
FIRM ENERGY SALES
AGREEMENT
COMES NOW Idaho Winds LLC ("Idaho Winds ) and submits the following comments
to the July 11 , 2007 motions ("Motions ) of Idaho Power Company ("Idaho Power" or the
Company ) for orders of the Idaho Public Utility Commission (the "Commission ) approving
amendments ("Amendments ) to those two certain Firm Energy Sales Agreements, both
dated December 20, 2006, between Idaho Power and Hot Springs Windfarm , LLC ("Hot
Springs ), on the one hand , and Bennett Creek Windfarm, LLC ("Bennett Creek"), on the
other hand (individually, an "Agreement," and collectively, the "Agreements
Comments of Idaho Winds LLC
INTRODUCTION
These comments of Idaho Winds apply identically to both Motions of Idaho Power, in
connection with the Hot Springs Windfarm and Bennett Creek Windfarm projects, given that the
subject matter and details of both Motions and projects are identical.
The Motions of Idaho Power request that the Commission issue orders approving the
Amendments to the Agreements that (1) revise the wind turbine manufacturer and
specifications; (2) revise the scheduled operation date; and (3) provide liquid security ("Delay
Security ) in the amount of estimated Delay Liquidated Damages (as defined in the
Agreements). Idaho Power further requests in Section 11 of the Motions that the Commission
concur that Idaho Power propose a similar resolution in the form of Delay Security for those
other wind projects facing similar delays due to unanticipated interconnection delays. Idaho
Winds desires to comment only on the Delay Security matter.
BACKGROUND
Idaho Winds and Idaho Power have entered into that certain 20-year Firm Energy Sales
Agreement dated December 12 2006 (or power purchase agreement
, "
PPA") for the 18 MW
Alkali Wind Farm (the "Project"), which the Commission approved by Order No. 30253 on
February 26 , 2007 (Case No. IPC-O6-36). This Project is one of the "other wind projects in
the same area" that Idaho Power refers to in Section 11 of its Motions that face "similar delays
due to unanticipated (by the developer) interconnection delays." Idaho Winds is currently in
discussions with Idaho Power s delivery business unit and , like Hot Springs and Bennett Creek
it has become apparent that the Project will require network upgrades in order to accommodate
the Project's generation and the time required for completion of necessary studies and the
construction of necessary interconnection facilities and network upgrades will delay the
Project's online date beyond the December 31 , 2007 Scheduled Operation Date, triggering
Delay Liquidated Damages (the foregoing capitalized terms are as defined in the PPA).
Comments of Idaho Winds LLC
DELAY SECURITY UNFAIR AND OF NO VALUE
Even if Hot Springs and Bennett Creek are willing to provide Delay Security for their
projects, Idaho Winds should not be forced to do the same for its Project, or other developers
for their projects, because the imposition of a Delay Security is unfair to the developer. The
need for network upgrades , and the attendant studies, construction activities, and time
schedules, is determined by and through the control of Idaho Power-so why should the
developer, like Idaho Winds, be punished with the requirement to provide Delay Security? The
developer has not caused the delay.
Idaho Power claims in Section 10 of its Motions that it believes the Delay Security
provision "provides value for the Company and its customers " but Idaho Power offers no
substantiation of this value. Idaho Winds contends that the provision is of no value because, as
the Commission is reminded , the PPA includes a Delay Liquidated Damages provision and
Idaho Winds is contractually bound to pay such damages , if any, regardless of the posting of
any Delay Security. In its Order No. 30253 , the Commission s staff supported the inclusion of
this Delay Liquidated Damages provision in the PPA as it believed "it is reasonable for Idaho
Power to begin inserting damage provisions into PURPA contracts to provide a mechanism for
the Company to be made whole if it incurs higher costs to acquire replacement power " and with
no need for any type of Delay Security. As Idaho Power further states in Section 10 of its
Motions , this "provision is not currently in this or other OF contracts " but no overriding reason is
offered as to why it must be included in these Agreements or any other OF contracts.
CONCLUSION
If not for delays caused by Idaho Power s delivery business unit, the Alkali Project would
meet the Scheduled Operation Date. If Idaho Winds is not causing the delay, why should it be
punished by being required to provide Delay Security? Moreover, the Delay Liquidated
Damages provision of Alkali Project's PPA is adequate to protect Idaho Power and its
customers from any excess costs that might be incurred to purchase replacement power due to
Comments of Idaho Winds LLC
any Project startup delays for which Idaho Winds would be responsible, and the Commission
does not need to impose any unfair and extraneous Delay Security provision upon Idaho Winds
and its PPA, or upon any other developer in a similar situation.
DATED this 19th day of July, 2007
By:
ZJ~
William Damon , Vice President
Idaho Winds LLC
5356 N. Cattail Way
Boise , Idaho 83714
P: 925.388.0072
F: 925.388.0073
E: wd(fYpowerworks.com
Comments of Idaho Winds LLC
CERTIFICATE OF SERVICE
I hereby certify that on the 19th day of July, 2007, I caused to be served, via the
methodes) indicated below, true and correct copies of the foregoing document, upon:
Jean Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
O. Box 83720
Boise, ID 83720-0074
jean .jewell(fYpuc. idaho.gov
Scott Woodbury
Deputy Attorney General
Idaho Public Utilities Commission
O. Box 83720
Boise , ID 83720-0074
scott. wood bu ry(fYpuc. idaho. gov
Barton L. Kline, Senior Attorney
Monica B. Moen, Attorney II
Idaho Power Company
1221 West Idaho Street
O. Box 70
Boise, ID 83707
bkline~idahopower. com
mmoen(fYidahopower. com
Ric Gale
VP-Pricing and Regulatory
Idaho Power Company
1221 West Idaho Street
O. Box 70
Boise, ID 83707
c/o raliphin(fYidahopower.com
Dean J. Miller
Attorney for Hot Springs and Bennett Creek
McDevitt & Miller LLP
420 W. Bannock
Boise, ID 83701
c/o joe(fYmcdevitt-miller.com
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William Damon , Vice President
Idaho Wind LLC
Comments of Idaho Winds LLC