20110113final_order_no_32159.pdf

Office of the Secretary
Service Date
January 13, 2011
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF A FIRM ENERGY SALES
AGREEMENT WITH J.M. MILLER
ENTERPRISES, INC. FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY.
ORDER NO. 32159
CASE NO. IPC-I0-
On November 15, 2010, Idaho Power Company filed an Application with the
Commission requesting approval of a 10-year Firm Energy Sales Agreement (the "Agreement"
between Idaho Power and J.M. Miller Enterprises, Inc. (J.M. Miller) dated November 1 , 2010.
The Application states that J.M. Miller would sell and Idaho Power would purchase electric
energy generated by the Sahko Hydro Project (the "Facility ) located near Filer, Idaho. The
Company requested that its Application be processed by Modified Procedure.
On December 8, 2010, the Commission issued a Notice of Application and Notice of
Modified Procedure setting a 21-day comment deadline. Staff was the only party to file
comments. By this Order, the Commission approves the Agreement between Idaho Power and
M. Miller without change or condition and declares that all payments made by Idaho Power to
M. Miller be allowed as prudently incurred expenses for ratemaking purposes.
THE AGREEMENT
The Application states that J.M. Miller is currently selling energy from this Facility
to Idaho Power under a Schedule 86 non-firm agreement dated September 7 , 2005 , approved by
the Commission in September 2005. Order No. 29874; Application at 2. The Agreement
specifies that the existing agreement shall be terminated at the time the Facility achieves its
Operation Date as specified within the presently submitted Agreement.
The Agreement is for a term of 10 years and contains the current non-levelized
published avoided cost rates established by the Commission in Order No. 31025 for energy
deliveries of less than 10 average megawatts ("aMW"). The nameplate rating of the Facility is
5 MW. Interconnection for this Facility was completed in association with the existing
Schedule 86. Id. at 4. Therefore, all applicable interconnection charges and monthly operation
and maintenance charges have already been assessed and collected from J.M. Miller regarding
this Facility.
ORDER NO. 32159
As this Facility is already providing energy to Idaho Power under an existing
Schedule 86 agreement, lM. Miller selected a Scheduled Operation Date of 30 days past the date
this Agreement is approved by the Commission. By its own terms, the Agreement will not
become effective until the Commission has approved all of the Agreement's terms and
conditions and declares that all payments made by Idaho Power to J.M. Miller for purchases of
energy will be allowed as prudently incurred expenses for ratemaking purposes. Agreement ~
21.1.
THE COMMENTS
Staff reviewed the Agreement and confirmed that it comports with all of the tenns
and conditions of the various Commission Orders applicable to PURP A agreements. Staff noted
that the Agreement is substantially identical to other recently-approved contracts and, therefore
presents no new issues that merit additional discussion.
Although Idaho Power filed a Joint Petition with the Commission on November 5
2010, seeking a reduction in the published avoided cost rate eligibility cap from 10 aMW to 100
, Idaho Power does not believe that this Agreement should be impacted by that filing. Staff
agrees. The Agreement was signed by the parties prior to the filing of the Joint Petition and the
subsequent Notice of Filing issued by the Commission. Therefore, Staff recommended the
Commission approve all of the Agreement's terms and conditions and declare that all payments
made by Idaho Power to lM. Miller for purchases of energy be allowed as prudently incurred
expenses for ratemaking purposes.
FINDINGS AND CONCLUSIONS
The Idaho Public Utilities Commission has jurisdiction over Idaho Power, an electric
utility, and the issues raised in this matter pursuant to the authority and power granted it under
Title 61 of the Idaho Code and the Public Utility Regulatory Policies Act of 1978 (PURP A). The
Commission has authority under PURP A and the implementing regulations of the Federal
Energy Regulatory Commission (FERC) to set avoided costs, to order electric utilities to enter
into fixed-term obligations for the purchase of energy from qualified facilities (QFs) and to
implement FERC rules.
The Commission has reviewed the record in this case, including the Application, the
November 1 , 2010 Agreement, and the comments and recommendations of Commission Staff.
As represented and pursuant to contract, under normal and/or average conditions the Facility will
not exceed 10 aMW on a monthly basis. As such, we find that the lM. Miller project is
ORDER NO. 32159
qualified to receive the non-levelized published avoided cost rates in effect on the date of
contract signing.
Based on the record established in this case, we find that the proposed Agreement
contains acceptable contract provisions including the non-Ievelized published avoided cost rates
approved by the Commission in Order No. 31025. We further find it reasonable to allow
payments made under the Agreement as prudently incurred expenses for ratemaking purposes.
ORDER
IT IS HEREBY ORDERED that the November 1 , 2010, Firm Energy Sales
Agreement between Idaho Power and lM. Miller Enterprises, Inc. is approved without change or
condition.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code ~ 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this /J..
fi.
day of January 2011.
~-II.
D. KEMPTON, P SIDENT
~A~ d &JLARSHA H. SMITH, COMMISSIONER
ATTEST:
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Commission Secretary
O:IPC-l 0-37 _ks2
ORDER NO. 32159