20100603notice_of_application_ipc2.pdf

Office of the Secretary
Service Date
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
June 3, 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 NEW ENERGY TWO, LLC (SWAGER
FARMS)
) CASE NO. IPC-IO-
) NOTICE OF APPLICATION
) NOTICE OF
) MODIFIED PROCEDURE
) NOTICE OF
) COMMENT/PROTEST DEADLINE
YOU ARE HEREBY NOTIFIED that on May 25, 2010, Idaho Power Company
(Idaho Power; Company) filed an Application with the Idaho Public Utilities Commission
(Commission) requesting approval of a IS-year Firm Energy Sales Agreement between Idaho
Power and New Energy Two, LLC dated May 24 2010 (Agreement).
Under the terms of the Agreement, New Energy will sell and Idaho Power purchase
electric energy generated by the Swager Farms Dairy Anaerobic Digester Power Project
(Facility) located near Buhl in Twin Falls County, Idaho. The location of the Facility is more
particularly described as Section 21 , Township 10 S, Range 15 E, Clover Quadrangle, Twin Falls
County, Idaho. Appendix B-2. New Energy warrants that the Facility is a qualifying facility
(QF) under applicable provisions of the Public Utility Regulatory Policies Act of 1978 (PURP A).
~ 3.
The nameplate rating of the Facility is 2 MW. Appendix B-1. The Maximum
Capacity Amount is 2 MW. Appendix B-4. 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.
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). ~ 7.1. New Energy has selected
a Scheduled Operation Date of October 1 2012. Appendix B-
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
Idaho Power notes that the purchase rates set forth in the Agreement, Order No.
30744, had on the May 24, 2010, date of contract signing been replaced by the lower rates of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-O1.
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 New Energy meets the second test of
the Commission and should be entitled to the rates established by Order No. 30744.
In determining that New Energy was entitled to grandfathering under the higher rates
of Order No. 30744, the Company concluded that New Energy satisfied the following
grandfathering criteria prior to March 16 2010:
a. Interconnection and Transmission
Filed an interconnection application; and
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
HI.Received confirmation from Idaho Power that transmission capacity is
available for the project and/or received an 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.
It is Idaho Power s opinion that the New Energy 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.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
With respect to the Power Purchase Agreement criteria, the Company contends that
New Energy and Idaho Power had resolved all material outstanding contract issues. Both parties
expected the final review to be a relatively straightforward process. However, in early February,
the Company became aware of some new procedural requirements from the Federal Energy
Regulatory Commission (FERC) that affected the way that the Facility would qualify for a
network resource designation and thereby obtain the transmission needed to bring the power to
be generated by the Facility from the interconnection to the Company load centers. The new
procedure required some changes to the internal process at Idaho Power. Idaho Power embarked
upon interpreting the regulations and implementing a process to be in compliance. In Idaho
Power s opinion the Agreement would have been signed by both parties prior to March 16 2010
except for the time required by Idaho Power to implement the new internal transmission and
network resource process and, as a result, the Facility should qualify for a contract including the
Order No. 30744 rates. New Energy is current in all its interconnection study payments and so
long as New Energy continues to provide requested information in a timely manner and pay
invoices on time, it appears that the interconnection can be completed in time for New Energy to
achieve its Scheduled Operation Date for the Facility.
In further support of its request for grandfathering, Idaho Power states that the
Facility Agreement 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 the Dry Creek anaerobic digester projects
contracts, Order Nos. 31060 and 31034, respectively.
Agreement ~ 21.1 provides that the New Energy 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 New Energy 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-l7. 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.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
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-1O-17 is Wednesday, June 23, 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-
10-l7 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: dwalkercq?idahopower.com
lnordstromcq?idahopower. 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: rallphincq?idahopower.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.
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.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
Washington Street, Boise, Idaho and at the general business office of Idaho Power Company,
1221 W. Idaho Street, Boise, Idaho.
DATED at Boise, Idaho this J J day of June 2010.
~/.
1M D. KEMP , P SIDENT
J&JL
MARSHA H. SMITH, COMMISSIONER
~ 'D~J
MACK A. REDFORD , COMMISSIONER
ATTEST:
Commission Secretary
bls/IPC-IO-17 sw
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE