20090623Supplement to Motion.pdf

BARTON L. KLINE
Lead Counsel
IDAHO PUeUG . ..,
UTlUT1ES COMMiSSiON
VEl)
e¡IDA~POR~
An IDACORP Company
June 22, 2009
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-08-21
Special Contract to Supply Power to Hoku Materials, Inc.
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of Idaho Power
Company's Supplement to Motion to Delay Start Date in the above matter.
Very truly yours,0t~
Barton L. Kline
BLK:csb
Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise. 10 83702
"
BARTON L. KLINE (ISB No. 1526)
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: 208-388-6936
bkline(cidahopower.com
Inordstrom(cidahopower.com
RECEIVED
2009 JUN 22 PH~: 41
IDAHO PUBUc'
UTILITIES COMMIŠSION
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
APPROVAL OF A SPECIAL CONTRACT
TO SUPPLY POWER TO HOKU
MATERIALS, INC.
)
) CASE NO. IPC-E-08-21
)
) SUPPLEMENT TO MOTION TO
) DELAY START DATE
)
On May 28, 2009, Idaho Power Company ("Idaho Powet' or the "Company") filed
the above-referenced Motion which asked the Commission to authorize a delay in the
commencement date of the Energy Sales Agreement ("ESA") dated September 17,
2008, between Idaho Power Company and Hoku Materials, Inc., ("Hoku").
In support of its Motion, the Company and Hoku filed a letter agreement dated
May 27, 2009, ("Letter Agreement") in which they outlined the terms and conditions
under which they had agreed to delay the start date of the ESA, as well as other
changes to the ESA. These changes include various operating commitments,
SUPPLEMENT TO MOTION TO DELAY START DATE - 1
reductions in Hoku's contract demand levels during the summer of 2012, and the
application of Schedule 91, Energy Efficiency Rider, to Hoku's first block charges
beginning December 1, 2011.
In the Motion, the Company advised the Commission that the parties were
working on a formal amendment to the ESA to implement the agreements outlined in
the Letter Agreement. Idaho Power and Hoku have completed that process and
enclosed herewith for the Commission's review and approval is the Amended and
Restated ESA which implements the changes described in the Motion and the Letter
Agreement.
With this filing, the Company and Hoku have fully submitted their proposed
changes to the ESA and request that the Commission issue an Order approving the
Amended and Restated ESA without material change or condition.
DATED at Boise, Idaho, this 22nd day of June 2009.
~'""
BARTON L. KLINE
Attorney for Idaho Power Company
SUPPLEMENT TO MOTION TO DELAY START DATE - 2
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 22nd day of June 2009 I served a true and
correct copy of the SUPPLEMENT TO MOTION TO DELAY START DATE upon the
following named parties by the method indicated below, and addressed to the following:
Commission Staff
Neil Price
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
Scott Paul
Chief Operating Officer & General
Counsel
Hoku Materials, Inc.
One Hoku Way
Pocatello, Idaho 83204
SUPPLEMENT TO MOTION TO DELAY START DATE - 3
-l Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-l Email NeiI.Price(cpuc.idaho.gov
Hand Delivered
-LU.S. Mail
_ Overnight Mail
FAX
-l Email spaul(chokuscLcom
~
Barton L. Kline
AMENDED AND RESTATED ELECTRIC SERVICE AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
HOKU MATERIALS, INC
THIS AMENDED AND RESTATED AGREEMENT FOR ELECTRIC
SERVICE ("Agreement") is executed on June 19, 2009, by HOKU MATERIALS, INC, a
Delaware Corporation ("Hoku") and IDAHO POWER COMPANY, an Idaho Corporation
("Idaho Powet'). In consideration of the mutual covenants hereinafter set forth, the
parties hereby agree as follows:
SECTION 1 - SPECIAL CONTRACT
1.1 This Agreement is a Special Contract as described in Idaho
Power's Schedule 19. This Agreement supercedes and replaces the Agreement for
Electric Service between the parties dated September 17, 2008.
SECTION 2 - DEFINITIONS
When used in this Agreement:
2.1. "Commission" shall mean the Idaho Public Utilties Commission or
its successor agency.
2.2. "Construction Agreement" shall mean that certain Agreement for
Construction of Hoku Electric Substation and Associated Facilties dated as of
December 28, 2007, by and between Hoku and Idaho Power, as such may be amended
from time to time.
2.3. "Contract Load Factot' shall mean 90 percent for purposes of
establishing the energy blocks for monthly billng.
2.4. "Embedded Date" shall mean December 1, 2013.
2.5. "Embedded Rate" shall mean the demand and energy rates
detailed in the Company's then-effective Schedule 19T.
2.6. "Excess Demand" shall mean the average kilowatts supplied
during the coincident 15-consecutive-minute period of maximum use each day, adjusted
for Power Factor, which exceeds the Total Contract Demand.
2.7. "Excess Energy" shall mean any kilowatt-hours of energy supplied
to the Hoku Facility during the monthly biling period as measured by the metering
equipment located at the Points of Delivery that exceeds the sum of the First Block
Energy and the Second Block Energy.
2.8. "First Block Contract Demand" shall mean the monthly number of
kilowatts Idaho Power has agreed to make available to the Hoku Facilty in accordance
with the Scheduled Contract Demand in Section 6.
1
2.9. "First Block Energy" shall mean the kilowatt-hours determined by
multiplying the First Block Contract Demand by the number of hours in the billng period
multiplied by the Contract Load Factor.
2.10. "Hoku Facility" shall mean the Hoku Polysilicon Production
complex located on One Hoku Way, Pocatello, Idaho.
2.11. "Interconnection Facilities" shall mean all facilities which are
reasonably required by Prudent Electrical Practices and the National Electric Safety
Code to interconnect and deliver electrical power and energy to the Hoku Facility,
including, but not limited to, transmission facilties, substation facilities and metering
equipment.
2.12. "Minimum Biled Energy" shall mean the number of kilowatt-hours
determined by multiplying 50% of the Total Contract Demand for the billng month by the
number of hours in the billng month at the Contract Load Factor.
2.13. "Points of Delivery" shall mean the locations specified in
paragraph 5.2 where the electrical facilities owned by Hoku are interconnected to the
electrical facilities owned by Idaho Power and where power and energy are delivered by
Idaho Power for the purpose of providing electrical service for the operations of the Hoku
Facility.
2.14. "Power Factot' shall mean the percentage obtained by dividing
the maximum demand recorded in kW by the corresponding kilovolt-ampere (kVa)
demand established by Hoku.
2.15. "Prudent Electrical Practices" shall mean those practices, methods
and equipment that are commonly and ordinarily used in electrical engineering and utility
operation to operate electrical equipment and deliver electric power and energy with
safety, dependability, effciency and economy.
2.16. "Schedule 19" shall mean the Company's then effective Idaho
Retail Tariff Schedule 19T.
2.17. "Schedule 32" shall mean the Hoku tariff schedule of rates and
charges or its successor schedules.
2.18. "Scheduled Contract Demand" is defined in Section 6.1.1 below.
2.19. "Second Block Contract Demand" shall mean 25,000 kilowatts.
2.20. "Second Block Energy" shall mean the total kilowatt-hours
supplied to the Hoku Facilty during the monthly billng period as measured by the
metering equipment located at the Points of Delivery less the First Block Energy, but no
greater than 25,000 kilowatts multiplied by the number of hours in the biling period
multiplied by the Contract Load Factor.
2.21. "Total Contract Demand" shall mean the sum of the First Block
Contract Demand and the Second Block Contract Demand as specified in Section 6, and
as such may be modified pursuant to Section 6.2 below.
2.22. "Transformer Losses" shall mean energy losses resulting when a
transformer changes the voltage level of alternating current electricity. Transformer
losses will be accounted for in the initial metering installation.
2
SECTION 3 - TERM OF AGREEMENT
3.1 This Agreement shall become effective as provided in paragraph
15.1 and remain in effect through the Embedded Date and wil be automatically renewed
thereafter until either Hoku or Idaho Power terminates this Agreement as provided in
paragraph 4.1.
3.2 It is the intention of the parties that following the Embedded Date,
the parties shall enter into a new Special Contract whereby Hoku shall pay energy and
demand rates that are equal to the lesser of the then-applicable Schedule 19 rate or the
average of the contract rates in Idaho Power's then-effective other "Special Contracts".
These Special Contract rates wil remain in effect on an interim basis until the next final
Commission order in a general rate case proceeding.
3.3 Service under this Agreement wil commence December 1, 2009.
SECTION 4 - TERMINATION
4.1 Notice of Termination: After the Embedded Date, either party to
this Agreement shall have the right to terminate this Agreement by delivering written
notice of termination to the other party. The effective date of termination wil be specified
in the termination notice, but such effective date cannot be earlier than 12 months after
the date of the delivery of the notice of termination. If both parties give notice of
termination, the earliest effective date wil prevaiL. If the effective date of a termination
occurs before the new Special Contract is effective between the Parties as described in
Section 3.1 above, then the applicable energy and demand rates shall be the Embedded
Rate.
SECTION 5 - SERVICES TO BE PROVIDED
5.1 Supply Obligation: In accordance with Prudent Electrical Practices
and the provisions of this Agreement, Idaho Power wil furnish Hoku's total requirements
for electric power and energy at the Hoku Facility. Hoku wil not resell any portion of the
power and energy furnished under this Agreement.
5.2 Points of Delivery: Electric power and energy shall be delivered by
Idaho Power at each point generally described as the load side terminals of the
substation transformer 13.8 kilovolt disconnect switches at the Hoku Facility.
5.3 Adjustment for Transformer Losses: Metering on the load side of
the substation transformers wil be adjusted for Transformer Losses.
5.4 Description of Electric Service: Idaho Power shall supply three-
phase, 60 hz alternating current at nominal 13,800 volts, with a maximum steady state
variation of plus or minus five percent (5%) under normal system conditions. Consistent
with Prudent Electrical Practices, Idaho Power wil operate within the capability of its
existing system to minimize voltage level fluctuations, the normal frequency variation to
be within plus or minus 0.05 hz on a 60 hz base.
5.5 Available Capacity: Idaho Power wil make power available to
Hoku in an amount equal to the kilowatts of Total Contract Demand shown in Section
6.1.1.
3
5.6 Request for Proposals: During the initial term of the agreement, at
Hoku's request, Idaho Power wil use commercially reasonable efforts to obtain
proposals to supply power to meet Hoku's summer loads not served by Idaho Power.
Idaho Power wil customize such supply request to match Hoku's requirements. These
additional purchases are subject to Idaho Power's ability to deliver the power to Hoku
and Hoku's acceptance of the price and terms of the proposals. Hoku is responsible for
the full costs of these purchases and any associated transmission and ancilary service
expense to transport such purchases to the Hoku Facility.
5.7 Release of First Block Energy: With adequate notice and the
written consent of Idaho Power, Hoku may request a release .of all or part of its First
Block Energy purchase commitment in return for credit on its First Block Energy Charge.
The value of the credit wil be determined by mutual agreement and will take into
consideration the timing of the notice and Idaho Powets abilty to manage any supply
commitments made on Hoku's behalf.
SECTION 6 - CONTRACT DEMAND
6.1 Contract Demand Provisions prior to the Embedded Date: The
following provisions apply during the period of time from December 1, 2009 to the
Embedded Date, while Hoku is changing its load at the Hoku Facility.
6.1.1 Scheduled Contract Demand: Hoku agrees to contract for, and
Idaho Power agrees to provide power made available to the Hoku Facility in the
following amounts expressed in kilowatts (the "Scheduled Contract Demand"):
First Block Second Block
Time Contract Contract Total Contract
Period Demand Demand Demand
12/1/2009 - 12/31/2009........1,000 25,000 26,000
1/1/2010- 1/31/2010............8,000 25,000 33,000
2/1/2010- 2/28/2010............17,000 25,000 42,000
3/1/2010- 4/30/2010............19,000 25,000 44,000
5/1/2010- 6/15/2010............32,000 25,000 57,000
6/16/2010 - 8/15/2010..........18,000 25,000 43,000
8/16/2010 - 9/15/2010..........42,000 25,000 67,000
9/16/2010- 12/31/2010 .......57,000 25,000 82,000
1/1/2011- 6/15/2011............57,000 25,000 82,000
6/16/2011- 8/15/2011..........18,000 25,000 43,000
8/16/2011- 9/15/2011..........42,000 25,000 67,000
9/16/2011- 12/31/2011 .......57,000 25,000 82,000
1/1/2012 - 6/15/2012............57,000 25,000 82,000
6/16/2012 - 8/15/2012..........18,000 25,000 43,000
4
8/16/2012 ,. 9/15/2012..........42,000
9/16/2012 - 12/31/2012 .......57,000
1/1/2013 - 12/1/2013............57,000
25,000
25,000
25,000
67,000
82,000
82,000
6.2 Contract Demand Provisions after Initial Expansion: After the
Embedded Date, Hoku has the option to increase or decrease its Total Contract
Demand level as follows:
6.2.1 Increases to Total Contract Demand: Under the terms of this
Agreement, Hoku may increase the Total Contract Demand above 82,000 kilowatts by
increasing the First Block Contract Demand in increments of 1,000 to 10,000 kilowatts
per year up to a Total Contract Demand of 175,000 kilowatts. Hoku wil notify Idaho
Power in writing of the additional capacity requirements at least one year in advance.
The new Total Contract Demand wil be in effect for a minimum of one year. Increases
to Total Contract Demand are subject to the availabilty of adequate capacity in Idaho
Power's facilities to provide the requested service.
6.2.2 Decreases to Total Contract Demand: After the Embedded Date,
Hoku may decrease the Total Contract Demand by reducing the First Block Contract
Demand in decrements of 1,000 kilowatts. Total Contract Demand may not be
decreased below 25,000 kilowatts. Hoku wil notify Idaho Power in writing of the
decrease in capacity requirements at least one year in advance. The new Total Contract
Demand will be in effect for a minimum of one year.
6.3 Excess Demand: Prior to the Embedded Date, and subject to
Section 6.2.1 above, the availabilty of power in excess of the Total Contract Demand is
not guaranteed, and if the average kilowatts supplied at the Hoku Facilty during the 15-
consecutive-minute period of maximum use each day, adjusted for power factor,
exceeds the Total Contract Demand, Idaho Power may curtail service to the Hoku
Facility. Idaho Power reserves the right to install, at any time, at Hoku's expense, any
device necessary to protect Idaho Power's system from damage which may be caused
by the taking of Excess Demand. Hoku wil be responsible for any damages to Idaho
Power's system or damages to third parties resulting from the taking of Excess Demand.
Hoku agrees to use its best reasonable efforts to monitor its electric loads and to advise
Idaho Power as soon as possible of the potential for Excess Demand at the Hoku
Facility. Excess Demand wil be subject to the Daily Excess Demand Charge and the
Monthly Excess Demand Charge specified in Schedule 32.
6.4 Proration: Bilings during months that contain a change in the
Scheduled Contract Demand wil be prorated.
SECTION 7 - FACILITIES FOR DELIVERY TO HOKU FACILITY
7.1 Additional Facilties: The parties acknowledge that they have
separately entered into the Construction Agreement, pursuant to which Hoku is paying
Idaho Power to construct the Interconnection Facilties necessary to provide the Total
Contract Demand under this Agreement. Idaho Power represents and warrants to Hoku
that none of the charges set forth in Schedule 32 include any cost reimbursement or
adjustment that is already being paid by Hoku pursuant to the Construction Agreement,
and that such Interconnection Facilities are suffcient to supply the Scheduled Contract
Demand. To the extent that additional transmission and/or substation Interconnection
5
Facilties are required to provide additional service pursuant to Section 6.2.1 above,
special arrangements wil be made in a separate Agreement between Hoku and Idaho
Power.
7.2 Operation and Maintenance: Idaho Power wil operate and
maintain Interconnection Facilities necessary to provide service to the Hoku Facilty.
Such Interconnection Facilities include Interconnection Facilties paid for by Hoku,
including those paid for by Hoku pursuant to the Construction Agreement. Idaho Power
shall operate and maintain such Interconnection Facilities in accordance with Prudent
Electrical Practices.
SECTION 8 - CHARGES TO BE PAID BY HOKU TO IDAHO POWER
8.1 Rates and Charges: The rates and charges for electrical power,
energy and other services provided by Idaho Power to the Hoku Facilty are identified by
component in Schedule 32. The total amount to be paid by Hoku for electric service to
the Hoku Facility wil be the sum of the components identified on Schedule 32.
8.2 Power Factor: When the Hoku Facilty's Power Factor is less than
95 percent during the 15-consecutive-minute period of maximum use for the monthly
biling period, Idaho Power wil determine the Total Biling Demand by multiplying the
metered demand in kilowatts by 0.95 and dividing that product by the Power Factor.
8.3 Biling and Metering Provisions: Idaho Power will install and
maintain suitable metering equipment for each Point of Delivery so that coincident
demand and energy consumption can be determined for the billng period.
8.4 First Block Contract Demand Charge: The First Block Contract
Demand Charge is fixed and is not subject to change through the Embedded Date. After
the Embedded Date, the Contract Demand Charge is subject to change and revision by
order of the Commission. After the Embedded Date, Idaho Power wil advocate for
Commission acceptance of the ratemaking treatment for the Special Contract described
in Section 3.2 above.
8.5 First Block Energy Charge: The First Block Energy Charge and
Excess Energy Charge are fixed and are not subject to change through the Embedded
Date. After the Embedded Date, the Energy Charge and Excess Energy Charge are
subject to change and revision by order of the Commission. After the Embedded Date,
Idaho Power will advocate for Commission acceptance of the ratemaking treatment for
the Special Contract described in Section 3.2 above.
8.6 Second Block Charges: The Second Block Contract Demand
Charge and the Second Block Energy Charge wil increase or decrease uniformly with
any base rate change authorized by the Commission that is applicable to Idaho Power's
Tariff Schedule 19T through the Embedded Date. After the Embedded Date, the
Second Block Contract Demand Charge and the Second Block Energy Charge are
subject to change and revision by order of the Commission.
8.7 Power Cost Adjustment: The Power Cost Adjustment (PCA) rate
as defined under Idaho Power's Tariff Schedule 55 wil be applied to the Second Block
Energy only. The PCA rate will not apply to the First Block Energy or to Excess Energy.
8.8 Conservation Program Funding Charge: The Conservation
Program Funding Charge as specified in Idaho Power's Tariff Schedule 91 for Schedule
19 wil be applied to the sum of the Second Block Charges, Excess Demand Charges,
6
and Excess Energy Charges. Beginning December 1, 2011, the Conservation Program
Funding Charge wil also apply to First Block Charges.
8.9 Minimum Energy Charges: Each month Hoku wil be biled for the
actual metered kilowatt-hours of energy, but no less than the Minimum Billed Energy
amount defined in Section 2.12.
SECTION 9 - PAYMENT OF BILLS/SETTLEMENTS
9.1 Billng Data: Hoku shall pay Idaho Power for all services provided
under this Agreement. Invoices for payment for electric services shall be prepared and
submitted to Hoku monthly. All invoices or bills shall contain such data as may be
réasonably required to substantiate the biling.
9.2 Payment Procedure: All bills or accounts for electric service owed
by Hoku to Idaho Power hereunder shall be due and payable within fifteen (15) days
following Hoku's receipt of a bil. Payment wil be made by electronic transfer of funds.
Idaho Power wil provide Hoku with current ABA routing numbers and other necessary
instructions to facilitate the electronic transfer of funds.
SECTION 10 - ACCESS TO PREMISES
10.1 During the term of this Agreement, and for a reasonable period
following termination, Idaho Power shall have access to the Hoku Facility premises at all
times for the purposes of reading meters, making installations, repairing and removing
Interconnection Facilities and Idaho Power equipment and for other proper purposes
hereunder.
SECTION 11 - ASSIGNMENT
11.1 This Agreement shall be binding upon the heirs, legal and
personal representatives, successors and assigns of the parties hereto.
SECTION 12 - LIABILITY
12.1 Each party agrees to protect, defend, indemnify and hold
harmless the other party, its officers, directors, and employees against and from any and
all liability, suits, loss, damage, claims, actions, costs, and expenses of any nature,
including court costs and attorney's fees, even if such suits or claims are completely
groundless, as a result of injury to or death of any person or destruction, loss or damage
to property arising in any way in connection with, or related to, this Agreement, but only
to the extent such injury to or death of any person or destruction, loss or damage to
property is not due to the negligence or other breach of legal duty of such other party;
provided; however, that each party shall be solely responsible for claims of and payment
to its employees for injuries occurring in connection with their employment or arising out
of any workman's compensation law.
12.2 Limitation of Liabilty: Neither party shall, in any event, be liable to
the other for any special, incidental, exemplary, punitive or consequential damages such
as, but not limited to, lost profis, revenue or good will, or interest, whether such loss is
based on contract, warranty, negligence, strict liabilty or otherwise.
7
SECTION 13 - MODIFICATIONS OF CONTRACT
13.1 This Agreement may not be modified except by writing, duly
signed by both parties hereto.
SECTION 14 - COMMISSION JURISDICTION
14.1 This Agreement and the respective rights and obligations of the
parties hereunder, shall be subject to (1) Idaho Power's General Rules and Regulations
as now or hereafter in effect and on file with the Commission and (2) to the jurisdiction
and regulatory authority of the Commission and the laws of the State of Idaho.
14.2 The terms, conditions, and rates set forth in this Agreement and
Schedule 32 are subject to the continuing jurisdiction of the Commission. The rates
under this Agreement are subject to change and revision by order of the Commission
upon a finding, supported by substantial competent evidence, that such rate change or
revision is just, fair, reasonable, sufficient, nonpreferential, and nondiscriminatory. It is
the parties' intention by such provision that the rate making standards to be used in
making any revisions or changes in rates, and the judicial review of any revisions or
changes in rates, wil be the same standards that are applicable to Idaho intrastate tariff
rates.
SECTION 15 - COMMISSION APPROVAL
15.1 This Agreement shall become effective upon the approval by the
Commission of all terms and provisions hereof without change or condition.
8
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IDAHO POWER COMPANY
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