20101208Comments.pdf

KRISTINE A. SASSER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BARNO. 6618
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR APPROVAL ) CASE NO. IPC-E-IO-26
OF A FIRM ENERGY SALES AGREEMENT )
WITH AGPOWER JEROME, LLC FOR THE ) COMMENTS OF THE
SALE AND PURCHASE OF ELECTRIC ) COMMISSION STAFFENERGY. )
)
COMES NOW the Staff of the Idaho Public Utilties Commission, by and through its
Attorney of record, Kristine A. Sasser, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure issued in Order No. 32116 on November 16,2010, in
Case No. IPC-E- 1 0-26, submits the following comments.
BACKGROUND
On October 20,2010, Idaho Power Company fied an Application with the Commission
requesting approval of a 20:.year Firm Energy Sales Agreement (the "Agreement") between Idaho
Power and AgPower Jerome, LLC (AgPower) dated October 13,2010. The Application states that
AgPower would sell and Idaho Power would purchase electric energy generated by the Double A
Digester Project (the "Facility") located in Lincoln County, Idaho. AgPower selected a Scheduled
Operation Date of January 1,2012, for its Facilty.
STAFF COMMENTS 1 DECEMBER 8, 2010
The Agreement between Idaho Power and AgPower is for a term of 20 years. The maximum
capacity of the Facilty is expected to be 4.5 MW: Idaho Power warants that the Agreement comports
with the terms and conditions of the various Commission orders applicable to PURP A agreements
(Order Nos. 30415, 30488, 30738, and 30744). Application at 2.
STAFF ANALYSIS
Staff believes that the only issue of real significance in this case is whether AgPower is entitled
to grandfathered rates. On April 9, 2010, AgPower fied a complaint against Idaho Power with the
Commission alleging that AgPower was entitled to a contract containing the higher avoided cost rates
of Order No. 30744 (rates superseded on March 16,2010, by Order NO.3 1 025). Idaho Power fied an
answer on May 5, 2010, alleging that AgPower was not entitled to Order No. 30744 avoided cost rates
because AgPower was disputing damage and security provisions that are part of Idaho Power's
"standard" terms and conditions for PURP A agreements. Application at 6.
Subsequent to AgPower's complaint, the paries entered into negotiations to attempt to resolve
their dispute over damage and security provisions. As evidenced by the submitted Agreement, the
paries have resolved their dispute. The Agreement contains the most recent terms and conditions,
including liquidated damages and security provisions. Idaho Power asserts that, but for the
disagreement as to the damage and security provisions, the Agreement would have been signed by both
paries prior to March 16,2010. As such, Idaho Power submits that, although the Agreement is dated
October 13,2010, AgPower should be entitled to the avoided cost rates set out in Order No. 30744
("grandfathered" rates). In effect, the Agreement contains all of the terms, conditions and rates that
Idaho Power maintained were appropriate in the beginning, before the dispute arose.
Idaho Power maintains that this Agreement is similarly situated to other power purchase
agreements approved by this Commission that contain grandfathered avoided cost rates. Staff agrees.
Consequently, Staff believes that the Agreement should be approved as submitted.
RECOMMENDATIONS
Staf recommends that the Commission approve all of the Agreement's terms and conditions
and declare that all payments made by Idaho Power to AgPower for purchases of energy wil be
allowed as prudently incured expenses for ratemaking puroses.
STAFF COMMENTS 2 DECEMBER 8, 2010
OitRespectfully submitted this 0
Technical Staff: Rick Sterling
i: umisc: commentsipce i O.26ksrps.doc
STAFF COMMENTS
day of December 2010.
~,¿L~AKris~ &lr co
Deputy Attorney General
3 DECEMBER 8, 2010
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 8TH DAY OF DECEMBER 2010,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. IPC-E-1O-26, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
DONOV AN E WALKER
LISA D NORDSTROM
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: dwalkerrgidahopower.com
lnordstromrgidahopower .com
RANDY C ALLPHIN
ENERGY CONTRACT ADMINISTRATOR
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: rallphinrgidahopower.com
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CERTIFICATE OF SERVICE