20100526notice_of_application_ipc.pdf

Office of the Secretary
Service Date
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
May 26 2010
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF A FIRM ENERGY SALES
AGREEMENT FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY
BETWEEN IDAHO POWER COMPANY
AND CARGILL INCORPORATED
. )
) CASE NO. IPC-IO-
) NOTICE OF APPLICATION
) NOTICE OF
) MODIFIED PROCEDURE
) NOTICE OF
) COMMENT/PROTEST DEADLINE
YOU ARE HEREBY NOTIFIED that on May 5 2010, Idaho Power Company (Idaho
Power; Company) filed an Application with the Idaho Public Utilities Commission
(Commission) requesting approval of a 10-year Firm Energy Sales Agreement between Idaho
Power and Cargill Incorporated (Cargill) dated May 4 2010 (Agreement).
Under the terms of the Agreement, Cargill will sell and Idaho Power will purchase
electric energy generated by the Bettencourt B6 Dairy Anaerobic Digester Power Project (B6
Facility) located near Jerome, Idaho. The location of the B6 Facility is more particularly
described as Section 19, Township 8 S, Range 16 E, Boise Meridian, Gooding County, Idaho.
Appendix B-2. Cargill warrants that the B6 Facility is a qualifying facility (QF) under applicable
provisions of the Public Utility Regulatory Policies Act of 1978 (PURP A). ~ 3.
The B6 Facility is already providing energy to Idaho Power under an existing Non-
Firm Schedule 86 Agreement (June 30, 2009). ~ 4.1. The nameplate rating of the B6 Facility is
2.25 MW. Appendix B-1. The Maximum Capacity Amount is 2.13 MW. Appendix B-
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 the Inadvertent Energy. ~ 7.
Cargill has elected a Scheduled Operation Date 30 days past the date the Agreement
is approved by the Commission. Appendix B-
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
The Agreement contains the non-levelized published avoided cost rates approved in
Order No. 30744 and comports with the terms and conditions of Order Nos. 30738 (SAR non-
fueled cost variables) and 30415 (daily load shape adjustment). ~ 7.
Idaho Power notes that the purchase rates set forth in the Agreement, Order No.
30744, had on the May 4, 2010, date of contract signing been replaced by the lower rates of
Order No. 30125 approved by the Commission on March 16, 2010, in Case No. GNR-lO-
Idaho Power recites that the Commission has previously determined grandfathering eligibility for
(older and higher) published avoided cost rates by requiring (1) a signed power sales agreement
be executed prior to the change in rates; or (2) a meritorious complaint filed with the
Commission demonstrating project maturity and that but for the actions of the utility a sales
agreement would have been signed prior to the change in rates. Although not filing a complaint
with the Commission, by signing the Agreement and voluntarily presenting it to the
Commission, Idaho Power has nevertheless concluded that Cargill meets the second test of the
Commission and should be entitled to the rates established by Order No. 30744.
In determining that Cargill was entitled to grandfathering under the higher rates of
Order No. 30744, the Company concluded that Cargill satisfied the following grandfathering
criteria prior to March 16 2010:
a. Interconnection and Transmission
Filed an interconnection application; and
11.Received and accepted an interconnection feasibility study report for
the project and paid any requested study deposits (or established credit)
for the next phase of the interconnection process in accordance with
Schedule 72; and
111.Received confirmation from Idaho Power that transmission capacity is
available for the project and/or received accepted transmission capacity
study results and cost estimates.
b. Purchase Power Agreement
An agreement was materially complete and would have been executed
by both parties prior to March 16, 2010, and except for routine Idaho
Power final processing, an agreement would have been executed prior
to March 16 2010.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
It is Idaho Power s opinion that the Cargill B6 Facility meets all of the above-referenced criteria.
The Interconnection and Transmission criteria were met at the time the B6 Facility was
interconnected with Idaho Power to make sales of non-firm energy under the Schedule 86
Agreement.
With respect to the Power Purchase Agreement criteria, the Company contends that
Cargill and Idaho Power had finally resolved all outstanding contract issues and that Cargill had
agreed to execute the Agreement after being notified that the B6 project had passed Idaho
Power s final internal review process. Both parties expected final review to be a relatively
straightforward process given that the parties had recently executed a substantially similar Firm
Energy Sales Agreement for the Dry Creek Dairy Anaerobic Digester Project which was
approved by the Commission in Order No. 31034 issued on April 1 , 2010. The B6 Facility
Agreement was commercially and legally similar to the Dry Creek Firm Energy Sales
Agreement. Approximately 10 days prior to March 16 2010, Idaho Power s management started
the process of reviewing the agreed-upon draft for final approval and execution. The final
Sarbanes-Oxley review process and the routine internal approval had not been completed as of
March 16 2010.
In further support of its request for grandfathering, Idaho Power states that the B6
Facility is a small project that is already certified as a QF and is currently selling power to Idaho
Power under a Schedule 86 contract. The Agreement also contains the most recent contract
terms and conditions, including the liquidated damages and security provisions previously
approved by the Commission in the contracts for the Arena Drop hydro project and in the
contracts for the Dry Creek anaerobic digester projects, Order Nos. 31060 and 31034
respectively.
Agreement ~ 21.1 provides that the Cargill Agreement will not become effective until
the Commission has approved all of the Agreement's terms and conditions and declared that all
payments Idaho Power makes to Cargill for purchases of energy from the Facility will be
allowed as prudently incurred expenses for ratemaking purposes.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filings of
record in Case No. IPC-10-15. 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
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
submission rather than by hearing.
31.01.01.201-204.
Reference Commission Rules of Procedure IDAP A
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-10-15 is Wednesday, June 16,2010.
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
31.01.01.204.
YOU ARE FURTHER NOTIFIED that written comments concerning Case No. IPC-
1 0-15 should be mailed to the Commission and the Company at the addresses reflected below.
Commission Secretary Donovan E. Walker, Senior Counsel
Idaho Public Utilities Commission Lisa D. Nordstrom, Lead CounselPO Box 83720 Idaho Power Company
Boise, ID 83720-0074 PO Box 70
Boise, ID 83707-0070
E-mail: dwalker(0idahopower.com
Inordstrom(0idahopower. com
Street Address for Express Mail:
472 W. Washington Street
Boise, ID 83702-5918 Randy C. Allphin
Energy Contract Administrator
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E-mail: rallphin(0idahopower.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
document. These comments must also be sent to Idaho Power at the e-mail addresses listed
above.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
YOU ARE FURTHER NOTIFIED that the Application in Case No. IPC-10-
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 W.
Washington Street, Boise, Idaho and at the general business office of Idaho Power Company,
1221 W. Idaho Street, Boise, Idaho.
DA TED at Boise, Idaho this d.
1-;'day of May 2010.
w. ~-JI D. KEMPT , P SIDENT
iSWL LL-&.L
MARSHA H. SMITH, COMMISSIONER
MACK A. REDFORD, COMMISSIONER
ATTEST:
€iTJI
~AJ
J a D. Jewell
missIOn Secretary
bls/O:IPC-IO-
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE