20091002Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL

DATE: OCTOBER 2, 2009

SUBJECT: CASE NO. IPC-E-09-25 (Idaho Power)
FIRM ENERGY SALES AGREEMENT – IDAHO WINDS LLC

On September 10, 2009, Idaho Power Company (Idaho Power; Company) filed an
Application with the Idaho Public Utilities Commission (Commission) requesting approval of a
20-year Firm Energy Sales Agreement between Idaho Power and Idaho Winds LLC (Idaho
Winds) dated September 1, 2009 (Agreement).
Idaho Winds proposes to design, construct, own, operate and maintain a 21 MW wind
generating facility located approximate six miles northwest of Glenns Ferry in Elmore County,
Idaho. The location of the project is more particularly described as Section 16, Township 5 S,
Range 9 E, Boise Meridian, Elmore County, Idaho. Idaho Winds warrants that the facility to be
known as the Sawtooth Wind Project will be qualified small power production facility (QF)
under the applicable provisions of the Public Utility Regulatory Policies Act of 1978 (PURPA).
This is the second firm energy sales agreement executed by Idaho Power and Idaho Winds LLC
for this location. Reference Case No. IPC-E-06-36, Order No. 30253 (Alkali Wind Project).
The Application states that the Agreement comports with the terms and conditions of
the various Commission Orders applicable to PURPA agreements for wind resources. Order
Nos. 30415 (daily load shape adjustment), 30488 (wind integration adjustment; Mechanical
Availability Guarantee), 30738 (SAR non-fuel cost variables), and 30744 (published avoided
cost rates). The Agreement contains non-levelized published avoided cost rates as currently
established by the Commission for energy deliveries of less than 10 aMW.
DECISION MEMORANDUM 2
The nameplate rating of the facility is 21 MW. Under normal and/or average
conditions, the facility will not exceed 10 aMW on a monthly basis. Should the facility exceed
10 aMW on a monthly basis, Idaho Power will accept the energy (Inadvertent Energy) that does
not exceed the maximum capacity amount; however, the Company will not purchase or pay for
this Inadvertent Energy. ¶ 7.5. Idaho Winds has selected October 31, 2012, as the first energy
date and December 31, 2012 as the Scheduled Operation Date. Appendix B-3.
As reflected in the Application, in conformance with Commission Order No. 30488,
this Agreement includes a Mechanical Availability Guarantee (MAG) (¶ 6.4), wind integration
cost reduction (¶ 7.1), and wind forecasting cost sharing (Appendix E). In addition, the
Agreement contains provisions for Delay Liquidated Damages (¶ 5.3) and associated Delay
Security (¶ 5.7) to secure the established Scheduled Operation Date of December 31, 2012.
Idaho Winds has been advised and understands that delays in the interconnection process do not
constitute excusable delays in achieving the Scheduled Operation Date and if the Scheduled
Operation Date is not achieved, delay damages will be assessed.
Agreement Paragraph 21.1 provides that the Agreement will not become effective
until the Commission has approved all of the Agreement’s terms and conditions and declares that
all payments Idaho Power makes to Idaho Winds for purchases of energy from the Sawtooth
Wind Project will be allowed as prudently incurred expenses for ratemaking purposes.
COMMISSION DECISION
Commission Staff and Idaho Power recommend that the Application in Case No.
IPC-E-09-25 be processed pursuant to Modified Procedure, i.e., by written submission rather
than by hearing. Reference IDAPA 31.01.01.201-204. Does the Commission agree with the
recommended procedure?

Scott Woodbury
Deputy Attorney General

bls/M:IPC-E-09-25_sw