20080827final_order_no_30631.pdf

Office of the Secretary
Service Date
August 27 2008
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
APPROV AL OF A SCHEDULE 86 NON-
FIRM ENERGY PURCHASE AGREEMENT
BETWEEN IDAHO POWER AND CARGILL
ENVIRONMENTAL FINANCE
ORDER NO. 30631
CASE NO. IPC-08-
On August 8, 2008 , Idaho Power Company (Idaho Power; Company) submitted for
approval a Uniform Agreement under Schedule 86 between Idaho Power and Cargill
Environmental Finance (Cargill) for the purchase of non-firm energy (Agreement). Application
Attachment A. Cargill is developing a 2.25 MW anaerobic digester near Hansen, Idaho
(Project). The Project will be a qualifying small power production facility under the applicable
provisions of the Public Utility Regulatory Policies Act of 1978 (PURP A).
Idaho Power and Cargill have entered into the July 28 , 2008 Agreement pursuant to
Idaho Power s Schedule 86, Cogeneration and Small Power Production-Non-Firm Energy tariff.
In accordance with Schedule 86, the purchase price will be equal to 85 percent of the weighted
average of the daily on-peak and off-peak Dow Jones Mid-Columbia Electricity Price Index for
non-firm energy.
The Project is already operational. After the Project has operated under the
Agreement for a reasonable period of time, Idaho Power expects that Cargill and Idaho Power
will enter into a long-term firm energy sales agreement for the Project.
The Company requests that all of the terms and conditions of the Agreement be
approved without change or condition and that all payments to be made under the Agreement be
allowed as prudently incurred expenses for ratemaking purposes.
Commission Findings
The Commission has reviewed the July 28, 2008 Idaho Power/Cargill Schedule 86
Non-Firm Energy Purchase Agreement. We find that the Agreement, as signed and submitted by
the parties, contains non-firm energy rates in conformity with posted tariffs and applicable
Commission Orders. We find it reasonable to allow payments made under the Agreement as
ORDER NO. 30631
prudently incurred expenses for ratemaking purposes. We also find that it is appropriate to
approve the Agreement without further notice.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over Idaho Power Company,
an electric utility, pursuant to the authority and power granted it under Title 61 of the Idaho Code
and the Public Utility Regulatory Policies Act of 1978 (PURP A).
The Commission has the authority under PURP A and the implementing regulations
of the Federal Energy Regulatory Commission (FERC) to set avoided costs, to order electric
utilities to enter into fixed-term obligations for the purchase of energy from qualified facilities
and to implement FERC rules.
ORDER
In consideration of the foregoing and as more particularly described above, IT IS
HEREBY ORDERED and the Commission does hereby approve the July 28 , 2008 Idaho
Power/Cargill Environmental Finance Schedule 86 Non-Firm Energy Purchase Agreement.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code ~ 61-626.
ORDER NO. 30631
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 27
r-J.
day of August 2008.
~\.e.-c.-L~\ ._
~~
MACK A. REDFORD, PRESIDENT
MARSHA H. SMITH, COMMISSIONER
JI . KEMPTON, CO SIONER
ATTEST:
bls/O:IPC-08-17 sw
ORDER NO. 30631