20090619Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:T J GOLO
DATE:JUNE 18, 2009
RE:IDAHO POWER'S COMPLIANCE FILING FOR SCHEDULE 89;
CASE NO. IPC-08-
On June 16 2009, Idaho Power ("Company ) filed a compliance filing to update its
Schedule 89 rate. Schedule 89 is the Unit Avoided Energy Cost rate for Cogeneration and Small
Power Production that is updated in each general rate case and contains two components: 1) the
variable energy cost for the Valmy Power Plant based upon the most recent Commission-
approved net power supply expenses as calculated by the AURORA model and 2) the current
variable O&M per unit of energy associated with Valmy Power Plant. The Company filed a
revised Schedule 89 for Commission s approval following the issuance of Order No. 30754 as
part of its initial compliance filing. However, the Schedule 89 filed in that compliance filing was
inadvertently not updated to reflect the newly approved net power supply expenses and 2008
variable O&M.
In this compliance filing, the Company filed a revised Schedule 89 tariff sheet, which
contains the rate that is reflective of the approved AURORA simulation and the current variable
O&M portion in Order No. 30754. Staff verified the Company s rate calculation for Schedule
89. The Company added the net power supply cost as generated by AURORA and variable
O&M expenses associated with the Valmy Power Plant to derive the 2.829 cents per kilowatt-
hour rate for Schedule 89. Staff was able to replicate the calculation of the Company and verify
the new Schedule 89 rate. The Company stated that "to date, the Company has not applied the
incorrect rate for any Cogeneration and Small Power Production energy purchases or agreements
for purchases. As a result, there has been no impact to the Company or its customers.
DECISION MEMORANDUM - 1 -JUNE 18 2009
ST AFF RECOMMENDATION
Staff believes that the corrected rate filed by the Company for Schedule 89 reflects the
approved net power supply and variable O&M expenses associated with Valmy Power Plant
following the issuance of Order No. 30754, and therefore recommends that the Commission
approve the revised tariff sheet for Schedule 89 as filed by the Company.
CO MMISSI 0 N D ECISI
Does the Commission wish to approve Idaho Power s revised tariff sheet for Schedule 89
as filed in the compliance filing?
;k
i:udmemoslIPC Tariff Advice Schedule 89 Compliance Filing
DECISION MEMORANDUM - 2 -JUNE 18 , 2009