20080523Decision Memo.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER REDFORD
COMMISSIONER SMITH
COMMISSIONER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF
LEG AL
FROM:NEIL PRICE
DEPUTY ATTORNEY GENERAL
DATE:MAY 19,2008
SUBJECT:FIRM ENERGY SALES AGREEMENT BETWEEN IDAHO POWER
COMPANY AND DF-AP #1 LLC FOR THE BIG SKY WEST DAIRY
DIGESTER GENERATION FACILITY; CASE NO. IPC-08-09.
On April 28, 2008, Idaho Power Company ("Idaho Power" or "Company ) filed an
Application with the Commission seeking approval of its Firm Energy Sales Agreement with
DF-AP #1 LLC ("DF-AP") dated April 21 , 2008.
THE AGREEMENT
The Agreement entered into between Idaho Power and DF-AP dictates that DF-
would sell and Idaho Power would purchase a specified amount of electric energy generated by
the Big Sky West Dairy Digester Generation Facility ("Big Sky ) near Gooding, Idaho.
Application at
DF-AP "proposes to design, construct, install, own, operate and maintain an
anaerobic digester adjacent to the Big Sky Dairy near Gooding, Idaho. . ..Id. This facility
qualifies as a "small power production facility under the applicable provisions of the Public
Utilities Regulatory Policy Act of 1978 ("PURP A")" and will provide a total of 1.5 MW of
nameplate generation. Id. at 1-
The parties entered into the aforementioned Energy Sales Agreement on April 21
2008. The Application states that the Agreement was entered into pursuant to the terms and
conditions of prior Commission Orders; will have a 20-year term of effectiveness; utilizes the
Non-Levelized Published Avoided Cost Rates established by the Commission for energy
deliveries of less than 1 0 average MW"; and will not become effective until all of its terms and
DECISION MEMORANDUM
conditions have been approved by the Commission as "allowable expenses for ratemaking
purposes.Id. at 2. The Agreement also contains terms and conditions similar to other PURPA
Agreements previously approved by the Commission - "including provisions for delay damages
and delay security in the event the facility does not achieve its Scheduled Operation Date.Id.
DF-AP will begin delivering energy to Idaho Power s system on November 21 2008
and has set apart February 14, 2009 as its Scheduled Operation Date. Id. DF-AP must meet
certain requirements and preconditions under the Agreement prior to any energy deliveries to
Idaho Power s system. Id. Idaho Power states that it will monitor for compliance with these
terms throughout the term of the Agreement. Id. at 2-3. Finally, the Application states that the
Agreement dictates that "all applicable interconnection charges and monthly operation and
maintenance charges under Schedule 72 will be assessed to DF-AP and administered by Idaho
Power s delivery business unit." Id. at 3.
ST AFF RECOMMENDATION
Staff has reviewed Idaho Power s Application and recommends that it be processed
through Modified Procedure , i.e. through a written comment period in lieu of a hearing. See
IDAPA 31.01.01.201-204.
COMMISSION DECISION
Does the Commission wish to process Idaho Power s Application through Modified
Procedure with a 21-day comment period following a Notice of Application and Notice of
Modified Procedure?
~ ~
Neil Price
Deputy Attorney General
M:IPC-O8-
DECISION MEMORANDUM