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Home My WebLink About20100122notice_of_application.pdfOffice of the Secretary Service Date January 22, 2010 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF IDAHO POWER COMPANY'S APPLICATION FOR APPROV AL OF A REPLACEMENT SPECIAL CONTRACT WITH MICRON TECHNOLOGY, INc. CASE NO. IPC-O9- NOTICE OF APPLICATION NOTICE OF MODIFIED PROCEDURE NOTICE OF COMMENT/PROTEST DEADLINE YOU ARE HEREBY NOTIFIED that on December 31 , 2009, Idaho Power Company (Idaho Power; Company) filed an Application with the Idaho Public Utilities Commission (Commission) requesting approval of a new special contract between Idaho Power and Micron Technology, Inc. (Micron) dated December 29, 2009 (Replacement Agreement). The Replacement Agreement is intended to replace the "current special contract" or Electric Service Agreement (ESA) between Idaho Power and Micron which has been in effect since August 31 , 1995 (Current Agreement), as amended. BACKGROUND Idaho Power s current approved tariff Schedule 19 (Large Power Service) provides that electric service to customers with loads greater than 25 MW will be provided pursuant to a special contract. Idaho Power and Micron have operated under a special contract, the Current Agreement, since August 31 , 1995. Since the Current Agreement between Micron and Idaho Power was initially approved by the Commission in 1995, there have been a number of amendments and extensions of the Current Agreement. Beginning January 1 , 2009, Idaho Power has been serving Micron under an Interim Bridge Agreement and under Schedule 26A, while Micron was undergoing significant restructuring of its operations. Order Nos. 30721 , 30871. Both the Bridge Agreement and Schedule 26A expired on December 31 2009. On January 1 2010, service to Micron reverted back to the Current Agreement and Schedule 26, which has been updated throughout the year to reflect Commission-authorized rate changes. NOTICE OF APPLICATION NOTICE OF MODIFIED PROCEDURE NOTICE OF COMMENT/PROTEST DEADLINE The Current Agreement obligates Idaho Power to provide Micron up to 140 000 kW of contract demand. Micron s current contract demand is 85 000 kW. Micron has requested that its contract demand be reduced to 60 000 kW. Micron has also requested that it be given additional flexibility to increase or decrease its contract demand to respond more quickly to changes in market conditions. Idaho Power is willing to provide Micron with additional operational flexibility and to reduce its contract demand but it needs reciprocal commitments from Micron to give it time to adjust its resource levels to respond to Micron s increasing or decreasing amounts of contract demand and reduction in the total contract demand that will be available to Micron. In recognition of the fact that the Current Agreement has previously been amended several times and the fact that the parties have negotiated and agreed on several new items and conditions that they find to be mutually beneficial, Idaho Power and Micron have entered into the Replacement Agreement. Application, Atch. 1. Schedule 26 is the tariff that contains the rates and charges to be paid by Micron. A new Schedule 26 reflecting the provisions of the Replacement Agreement is included with the Application as Attachment 2. Summary of Revisions to Current Agreement The principal differences between the Replacement Agreement and the Current Agreement are as follows: a. The 85 000 kW Contract Demand in the Current Agreement is reduced to 000 kW in the Replacement Agreement. This change is an operating benefit to Idaho Power and an economic benefit to Micron in that Micron will not be paying for capacity it does not need. Replacement Agreement ~ 6. b. The total maximum 140 000 kW Contract Demand in the Current Agreement is reduced to 120 000 kW in the Replacement Agreement. This reduced maximum capacity obligation is a planning benefit to Idaho Power, yet provides Micron some headroom generally equivalent to the substation capacity at the current site. Replacement Agreement ~ 6.2. c. In the Replacement Agreement, Micron is permitted to increase its Contract Demand in 1 000 kW increments on three months' notice rather than the one-year notice provided in the Current Agreement. In the Replacement Agreement, any new Contract Demand will be in effect for a minimum of six months rather than the one-year term in the Current Agreement. In the Replacement Agreement, Micron cannot increase its NOTICE OF APPLICATION NOTICE OF MODIFIED PROCEDURE NOTICE OF COMMENT/PROTEST DEADLINE total Contract Demand more than 10 000 kW in any six-month period. Replacement Agreement ~ 6. d. In the Replacement Agreement, decreases to Contract Demand require three months' prior written notice and the new decreased contract demand will be in effect for a minimum of six months. Replacement Agreement ~ 6.2. Changes to Schedule The changes to rates incorporated in Schedule 26 are designed to recover the same average cents-per-kilowatt-hour as authorized by the Commission in Case No. IPC-09-08. The Contract Demand Charge has been lowered from the current $1.94 per kW to $1.30 per kW. The Scheduled Monthly Contract Demand provision and the initial implementation of the daily excess demand charge have been removed and covered in the Replacement Agreement. The Billing Demand Charge has been increased to $8.48 per kW from $7.48 per kW. The Energy Charge remains the same as under the current tariff. The Monthly O&M provision has been r~moved because it has not been applicable for a number of years. These costs have since been captured in other rate charges. Idaho Power requests that the Commission issue an Order approving the Replacement Agreement and the rates and charges set out in its proposed amendment to tariff Schedule 26. YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filings of record in Case No. IPC-09-35. The Commission has preliminarily found that the public interest in this matter may not require a hearing to consider the issues presented and that issues raised by the Company s filing may be processed under Modified Procedure , by written submission rather than by hearing. Reference Commission Rules of Procedure, IDAP 31.01.01.201-204. YOU ARE FURTHER NOTIFIED that the deadline for filing written comments or protests with respect to Idaho Power s Application and the use of Modified Procedure in Case No. IPC-09-35 is Thursday, February 11 2010. NOTICE OF APPLICATION NOTICE OF MODIFIED PROCEDURE NOTICE OF COMMENT/PROTEST DEADLINE YOU ARE FURTHER NOTIFIED that if no written comments or protests are received within the deadline, the Commission may consider the matter on its merits and may enter its Order without a formal hearing. If comments or protests are filed within the deadline the Commission will consider them and in its discretion may set the matter for hearing or may decide the matter and issue its Order based on the written positions before it. Reference IDAP A 31.01.01.204. YOU ARE FURTHER NOTIFIED that written comments concerning Case No. IPC- 09-35 should be mailed to the Commission, the Company and Micron at the addresses reflected below. Commission Secretary Idaho Public Utilities Commission PO Box 83720 Boise, ID 83720-0074 Street Address for Express Mail: Barton L. Kline Lisa D. Nordstrom Idaho Power Company 1221 West Idaho Street (83702) PO Box 70 Boise, ID 83707-0070 E-mail: bkline(fYjdahopower.com lnordstrom~idahopower .com472 W. Washington Street Boise, ID 83702-5918 John R. Gale, Vice President Regulatory Affairs Idaho Power Company 1221 West Idaho Street (83702) PO Box 70 Boise, ID 83707-0070 E-mail: rgale~idahopower.com Rick Malmgren Micron Technology, Inc. 8000 Federal Way PO Box 6 Boise, ID 83707-0006 E-mail: remalmgrenCfYmicron.com All comments should contain the case caption and case number shown on the first page of this document.Persons desiring to submit comments via e-mail may do so by accessing the Commission s home page located at www.puc.idaho.gov. Click the "Comments and Questions icon and complete the comment form using the case number as it appears on the front of this NOTICE OF APPLICATION NOTICE OF MODIFIED PROCEDURE NOTICE OF COMMENT/PROTEST DEADLINE document. These comments must also be sent to Idaho Power and Micron at the e-mail addresses listed above. YOU ARE FURTHER NOTIFIED that the Application in Case No. IPC-09- may be viewed at www.puc.idaho.gov by clicking on "File Room" and "Electric Cases " or can be viewed during regular business hours at the Idaho Public Utilities Commission, 472 West Washington Street, Boise, Idaho and at the principal business office ofIdaho Power, 1221 West Idaho Street, Boise, Idaho. DATED at Boise, Idaho this ,;2) day of January 2010. ;/. Z~- D. MPT , P SIDENT MARSHA H. SMITH, COMMISSIONER . ~ ~ ~~-"',-'\.-" ",- L~, MACK A. REDFORD, COMMISSIONER ATTEST: Je D. Jewell Commission Secretary bls/O:IPC-09-35 sw NOTICE OF APPLICATION NOTICE OF MODIFIED PROCEDURE NOTICE OF COMMENT/PROTEST DEADLINE