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Idaho Public Utilities Commission

Case No. IPC-E-08-13

July 1, 2008

Contact: Gene Fadness [phone], 890-2712

Website:
http://www.puc.idaho.govwww.puc.idaho.gov

Idaho Power seeks approval of power purchase agreement

Idaho Power Co. is seeking regulatory approval of an agreement to buy 83 megawatts per hour from a Montana generator during heavy load hours in the months of June, July and August.

Idaho Power is asking the Idaho Public Utilities Commission to approve a two-year power purchase agreement with PPL EnergyPlus, LLC, the marketing arm of PPL Montana. (PPL Montana acquired most of the generating assets sold by the former Montana Power Company when the state of Montana deregulated its electric utility industry several years ago.) The agreement with EnergyPlus replaces an Idaho Power/PPL Montana contract that expires at the end of August 2009. The agreement would be effective June 1 through Aug. 31, 2010, and June 1 through Aug. 31, 2011, providing electricity for 16 hours, six days a week, Monday through Saturday.

Idaho Power issued a request for bids to replace the expiring PPL Montana contract and EnergyPlus was the successful bidder. The price to be paid is $101 per MWh, including transmission costs.

The energy cost of $92.95 per MWh is competitive and favorable when compared to alternative resources, Idaho Power maintains. Heavy-load forward price curves in the regional market are slightly above the contract price. As a comparison, Idaho Power has already purchased heavy-load energy for August of this year at prices between $110 and $120 per MWh.

In addition to the power costs under the agreement, Idaho Power proposes to buy firm monthly transmission services across Northwestern Energy’s transmission system in Montana to Idaho Power’s Jefferson delivery point near the Montana-Idaho border. At current rates under Northwestern Energy’s open access transmission tariff, the maximum charge for monthly firm transmission service is $3.42 per kW of reserved capacity per month. After consideration of losses and transmission costs, Idaho Power would incur a total cost of $101 per MWh under the agreement.

Contracting with EnergyPlus is also advantageous, Idaho Power maintains, because of existing transmission constraints on the west side of Idaho Power’s system, which makes power purchases on the east side preferable.

The company requests that expenses associated with the purchase of the energy and the transmission capacity be included in the company’s annual Power Cost Adjustment which is filed in mid-April of every year and becomes effective for customers on June 1.

The commission is taking written comment through July 24 on whether the power purchase agreement with Energy Plus should be approved.

Comments are accepted via e-mail by accessing the commission’s homepage at
http://www.puc.idaho.gov/www.puc.idaho.gov and clicking on "Comments & Questions." Fill in the case number (IPC-E-08-13) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to [phone].

Documents related to this case, are available on the commission’s Web site. Click on “File Room” and then on “Electric Cases” and scroll down to the above case number.