20130515Pricing Information.pdf

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An IDACORP Company
JULIA A. HILTON
Corporate Counsel
ihiltonäidahopower.com
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May 14, 2013
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise Idaho 83702
Re: Case No, TPC O?Z4'
Cassia Gulch Wind Park, LLC, and Tuana Springs Energy, LLC —Application
Dear Ms. Jewell:
Enclosed for filing in the above matter are an original and seven (7) copies of Idaho
Power Company's Application.
Very truly yours,
Jia A. 4H11ton
JAH:csb
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
JULIA A. HILTON (ISB No. 7740)
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
ihiltonidahopower.com
dwaIkeridahoDower.com
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
INCLUSION OF OMITTED PRICING
INFORMATION IN THE FIRM ENERGY
SALES AGREEMENT AMONG IDAHO
POWER COMPANY AND CASSIA GULCH
WIND PARK, LLC, AND TUANA SPRINGS
ENERGY, LLC.
CASE NO. IPE.On1L/
APPLICATION
In accordance with Idaho Code § 61-503 and RP 052 and RP 201, Idaho Power
Company ("Idaho Power" or "Company") hereby respectfully applies to the Idaho Public
Utilities Commission ("Commission") for an order including additional pricing information
in the Firm Energy Sales Agreement ("Agreement") among Idaho Power and Cassia
Gulch Wind Park, LLC ("Cassia Gulch") and Tuana Springs Energy, LLC ("Tuana
Springs") (Cassia Gulch and Tuana Springs shall be collectively referred to as "Tuana")
whereby Tuana sells and Idaho Power purchases electric energy generated by the
Tuana project. Idaho Power initially sought to provide this information to the
APPLICATION -1
Commission via a letter. However, Commission Staff requested that the Company
submit this information via an application.
In support of this Application, Idaho Power represents as follows:
I. INTRODUCTION
1.On August 11, 2009, in Case No. IPC-E-09-24, Idaho Power filed an
application with the Commission for approval of the Agreement. The Commission
approved the Agreement on October 5, 2009 in Order No. 30917.
2.The terms of the Agreement state that the Agreement will be in effect for
20 years, beginning upon the project's actual Operation Date. See page 11 of the
Agreement in Case No. IPC-E-09-24. Due to delays, the Operation Date did not occur,
and therefore the term of the Agreement did not begin, until 12 months after the
anticipated Operation Date. The Agreement contains pricing information for the 20
years following the scheduled Operation Date. However, because the Operation Date
was delayed, the 20-year pricing schedule within the Agreement does not extend
through the full term of the Agreement.
3.In April 2013, Tuana notified Idaho Power that the 20-year pricing
schedule did not extend for the full term of the Agreement. The pricing contained in the
Agreement is a blend of prices. Prior to entering into this Agreement, Idaho Power and
Cassia Gulch Wind Park, LLC, were parties to a Public Utility Regulatory Policies Act of
1978 contract ("Previous Agreement") containing standard published avoided cost rates
in accordance with Order No. 29646. This current Agreement contains prices based
upon the standard published avoided cost rates from the Previous Agreement as well as
negotiated rates due to the increased size of the Tuana project.
APPLICATION -2
4. On May 3, 2013, Idaho Power provided Tuana with a letter setting forth
the pricing to be applied to the last 12 months of the term of the Agreement, which
spans over the years 2029 and 2030. Attachment 1. In order to determine the
appropriate rates that are in line with the pricing within the Agreement, Idaho Power
analyzed the components that went into the negotiated rate with Tuana. Idaho Power
identified an escalation value of approximately 2.3 percent for the portion of the rate
based upon the standard published avoided cost rates set forth in Order No. 29646.
Idaho Power was unable to identify a similar escalation value to the other portion of the
rate. With that in mind, Idaho Power determined it was fair and equitable to apply a 2.3
percent escalation to the energy prices as set forth the last year in the Agreement to
arrive at appropriate pricing for the remaining portion of the Agreement. As described in
the Company's May 3, 2013 letter, Idaho Power's proposed pricing for the final 12
months of the Agreement is as follows:
Season 1 - (73.50 %)
Year Mills/kWh
2029 76.05
2030 77.81
Season 2 - (120.00 %)
Mills/kWh
124.17
127.03
Season 3 - (100.00 %)
Mills/kWh
106.79
109.25
Season 3 - (100.00 %)
Mills/kWh
99.34
101.63
Season 3 - (100.00 %)
Mills/kWh
103.47
105.86
Heavy Load Purchase Price
Season I - (73.50 %) Season 2 - (120.00 %)
Year Mills/kWh Mills/kWh
2029 78.49 128.14
2030 80.30 131.10
Light Load Purchase Price
Season I - (73.50 %) Season 2 - (120.00 %)
Year Mills/kWh Mills/kWh
2029 73.01 119.21
2030 74.70 121.96
All Hours Energy Price
APPLICATION -3
5. Idaho Power requests that the Commission approve the inclusion of these
additional prices into the terms of the Agreement in order to clarify the rates in effect for
the final 12 months of the Agreement.
II. MODIFIED PROCEDURE
6.Idaho Power believes that a technical hearing is not necessary to consider
the issues presented herein and respectfully requests that this Application be processed
under Modified Procedure; i.e., by written submissions rather than by hearing. RP 201,
et seq. The Company stands ready to present the testimony in support of this
Application in a technical hearing if the Commission determines such a hearing is
required.
III. COMMUNICATIONS AND SERVICE OF PLEADINGS
7.Communications and service of pleadings with reference to this
Application should be sent to the following:
Julia A. Hilton
Regulatory Dockets
Idaho Power Company
P.O. Box 70
Boise, ID 83707
ihiIton(äidahopower.com
dockets(äidahopower.com
Randy Allphin
Energy Contracts Leader
Idaho Power Company
P.O. Box 70
Boise, ID 83707
rallphinidahopower.com
IV. REQUEST FOR RELIEF
8. As described in greater detail above, Idaho Power respectfully requests
that the Commission issue an order approving the inclusion of the above-described
pricing terms for the last year of the Agreement and finding it reasonable to allow these
payments made under the Agreement as prudently incurred expenses for ratemaking
purposes.
APPLICATION -4
DATED at Boise, Idaho, this 14th day of May 2013.
JbdAA.HIL N
Attorney for Idaho Power Company
APPLICATION -5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 14 th day of May 2013 I served a true and correct
copy of the foregoing APPLICATION upon the following named parties by the method
indicated below, and addressed to the following:
Commission Staff
Kristine Sasser
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-0074
Cassia Gulch Wind Park, LLC, and Tuana
Springs Energy, LLC
Richard Free
Director, Utility & Regulatory Process Support
Bennett Creek Windfarm, LLC
do Exelon Wind, LLC
4601 Westown Parkway, Suite 300
West Des Moines, Iowa 50266
X Hand Delivered
U.S. Mail
_Overnight Mail
FAX
X Email kris.sasser(puc.idaho.ciov
Hand Delivered
X U.S. Mail
Overnight Mail
FAX
X Email Richard.FreecexeIoncorp.com
E--f
-Oiln
Christa Bearry, Legal Assistant
APPLICATION -6
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E- O/
IDAHO POWER COMPANY
ATTACHMENT 1
An IDACORP Company
May 3, 2013
Cassia Gulch Wind Park, LLC and Tuana Springs Energy, LLC
do Exelon Wind, LLC
Attn: Richard Free, Director, Utility and Regulatory Process Support
4601 Westown Parkway, Suite 300
West Des Moines, IA 50266
Sent Via: Email ([e-mail] ), Certified Mail
Subject: Tuana Springs Expansion - Project Number - 31315150
Dear Richard,
Recently you contacted Idaho Power regarding your discovery that the pricing schedules contained in
Article VII of the Firm Energy Sales Agreement (Agreement) between Cassia Gulch Wind Park, LLC-
Tuana Springs Energy, LLC and Idaho Power Company dated August 5, 2009 did not extend through
the full 20 year term of the Agreement.
.As you are aware, this project was an expansion of the existing Cassia Gulch Wind Park and the
energy prices contained within this new Agreement for the larger, expanded project was a blending of
the published avoided cost energy prices contained within the original Cassia Gulch Wind Park
Agreement and the negotiated avoided cost prices that were applicable at the time of the expansion of
this project. The original Cassia Gulch Wind Park Pricing schedule contained avoided cost values
directly from IPUC order 29646, and the pricing schedule associated with the expansion was a
negotiated pricing schedule applicable to projects over the published rate eligibility cap. The IPUC
approved this new Agreement and the new pricing schedule in IPUC order 30917 on October 5, 2009.
The Agreement does contain a 20 year pricing schedule through the calendar year of 2028. However
due to the actual Operation Date being May 14, 2010, the full 20 year term of the Agreement will
extend to May, 2030, which unfortunately is beyond the pricing schedule contained within the
approved Agreement.
In order to extend the pricing schedule to include prices for the years 2029 and 2030 we have reviewed
the Agreement and various information used in the negotiations of the Agreement. A key component
of the price negotiations for the new Agreement was to maintain the energy values within the original
Cassia Gulch Wind Park Agreement and to add the negotiated value of the expansion, as this new
larger project now exceeded the 10 average MW eligibility cap. Thus, a blending of these two energy
values was used. In reviewing the original pricing within the Cassia Gulch Wind Park Agreement that
was in accordance with IPUC Order 29646, we have calculated the annual energy price escalation
within that pricing schedule to be approximately 2.3 % per year. As the negotiated energy values of
Page I of2
the expansion took into account Idaho Power energy needs and forecasted energy prices, there is no
consistent escalation pattern within that serious of values. Thus, we have applied a 2.3% escalation to
the 2028 energy prices within the approved pricing schedule and calculated the 2029 and 2030 energy
prices for this Agreement to be the following:
Article VII: PURCHASE PRICE AND METHOD OF PAYMENT
7.1 Heavy Load Purchase Price:
Season 1 - (73.50 %) Season 2 - (120.00 %)
Year Mills/kWh Mills/kWh
2029 78.49 128.14
2030 80.30 131.10
7.2 Light Load Purchase Price:
Season 1 - (73.50 %) Season 2 - (120.00 %)
Year Mills/kWh Mills/kWh
2029 73.01 119.21
2030 74.70 121.96
7.3 All Hours Energy Price:
Season 1 - (73.50 %) Season 2 - (120.00 %)
Year Mills/kWh Mills/kWh
2029 76.05 124.17
2030 77.81 127.03
Season 3 - (100.00 %)
Mills/kWh
106.79
109.25
Season 3 - (100.00 %)
Mills/kWh
99.34
101.63
Season 3 - (100.00 %)
Mills/kWh
103.47
105.86
Idaho Power will file this information with the IPUC and ask that it be included with the original
agreement. However, if the IPUC determines that additional information or specific IPUC approval of
this information is required such prices shall not be effective until such Commission approval is
obtained.
If you have any questions please do not hesitate to contact me.
Sincerely,
..
1e&M
Energy Contract Coordinator, Sr.
Idaho Power CompanyPower Suppy
208-388-2265
Jglenn(idahopower.com
cc: Donovan Walker (IPC)
Randy Aliphin (IPC)
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P0 Box 70 Boise, Idaho 83707 1 221 W Idaho St. Boise, Idaho 83702