20101022Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

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

FROM: KRISTINE SASSER
DEPUTY ATTORNEY GENERAL

DATE: OCTOBER 22, 2010

SUBJECT: IDAHO POWER’S MOTION TO APPROVE A GENERATOR
INTERCONNECTION AGREEMENT, CASE NO. IPC-E-09-25

On September 10, 2009, Idaho Power filed an Application with the Commission
requesting approval of a 20-year Firm Energy Sales Agreement between Idaho Power and Idaho
Winds LLC dated September 1, 2009. The Application was processed by Modified Procedure.
After reviewing and considering the Application and comments filed by Staff and other
interested parties in the case, the Commission found it reasonable to accept termination of the
Alkali Wind Project contract and approve the September 1, 2009, Firm Energy Sales Agreement
between Idaho Power and Idaho Wind LLC for the Sawtooth Wind Project. Order No. 30964.
THE MOTION
On October 5, 2010, Idaho Power filed a Motion with the Commission for approval
of a Generator Interconnection Agreement (Agreement) between Idaho Winds LLC and Idaho
Power regarding the Sawtooth Wind Project (Project). The Company’s Motion states that
interconnection of the Project is provided at 138 kV at an estimated cost to the Project of
approximately $844,000. The addition of the Project to Idaho Power’s system requires
substantial network transmission system upgrades at an estimated cost of approximately
$2,176,000. The estimated milestone date for construction completion is July 22, 2011.
This Agreement is the second outside of the Twin Falls queue involving PURPA
generating facilities subject to Idaho Power’s Schedule 72 which require substantial upgrades to
Idaho Power’s transmission system. The Commission first authorized a sharing formula for
transmission upgrade costs outside of the Twin Falls queue in Case Nos. IPC-E-06-34 and IPC-
DECISION MEMORANDUM 2
E-06-35 – Hot Springs Windfarm and Bennett Creek Windfarm, respectively.1 Idaho Power
asserts that the Sawtooth Wind Project will be interconnected to the same transmission line as
the Hot Springs and Bennett Creek projects and the network transmission upgrades required to
interconnect will have a similar impact. Therefore, as a similarly situated project, Idaho Power
and Idaho Winds LLC believe it is appropriate for this Agreement to include the cost sharing
allocation developed and accepted in the Cassia case2 and approved by the Commission in the
Hot Springs and Bennett Creek interconnection agreement.
The Company requests that its Motion be processed by Modified Procedure.
STAFF RECOMMENDATION
Staff has reviewed the Motion and recommends that the case proceed by Modified
Procedure.
COMMISSION DECISION
Does the Commission find that the public interest may not require a hearing to
consider the issues presented, and that this proceeding may be processed under Modified
Procedure?

M:IPC-E-09-25_ks

1 These windfarm projects shared the same developer, interconnection, and generator interconnection agreement. 2 25% of the costs of transmission upgrade will be provided by the project as a non-refundable contribution in aid of
construction (CIAC); 25% of the costs will be funded by Idaho Power and included in Idaho Power’s rate base; 50%
of the costs will be funded by the project as an advance in aid of construction (AIAC) subject to refund. These costs
will be rate based using standard regulatory accounting principles. Order No. 30414.