20110110notice_of_application_order_no_32156.pdf

Office of the Secretary
Service Date
January 10 2011
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR CASE NO. IPC-I0-
APPRO V AL OF A FIRM ENERGY SALES
AGREEMENT WITH HIDDEN HOLLOW NOTICE OF APPLICATION
ENERGY 2, LLC FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY.NOTICE OF
MODIFIED PROCEDURE
ORDER NO. 32156
On December 10, 2010, Idaho Power Company filed an Application with the
Commission requesting approval of a 20-year Firm Energy Sales Agreement (Agreement)
between Idaho Power and Hidden Hollow Energy 2, LLC (Hidden Hollow) dated December 8
2010. The Application states that Hidden Hollow would sell and Idaho Power would purchase
electric energy generated by the Hidden Hollow Landfill Gas Project (Facility) located near
Boise, Idaho. Idaho Power requests that its Application be processed by Modified Procedure.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that the Application states that Hidden Hollow
proposes to design, construct, install, own, operate and maintain a 3.2 MW landfill gas
generating facility to be located at Ada County s Hidden Hollow Landfill (Landfill). Application
at 2. An existing 3.2 MW landfill gas-powered generating unit owned by G2 Energy Hidden
Hollow, LLC (G2) is already operating at the Landfill. Order No. 29928. Hidden Hollow is
proposed by a separate affiliate company utilizing the same landfill gas reserves as its fuel
source.
A. The Agreement
YOU ARE FURTHER NOTIFIED that, because this Facility utilizes the same
landfill gas fuel source as the previously approved G2 project, Idaho Power has negotiated
provisions for the Hidden Hollow project intended to preserve the value of the G2 contract while
still enabling additional generation to be developed at this location. The Hidden Hollow
Agreement provides that the first 1100 scfm of fuel is dedicated to the generation units under the
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32156
G2 contract.The Hidden Hollow Agreement also allows Idaho Power to audit the fuel
distribution to the various generation units. By these terms, the parties ' intent is to preserve the
value of the lower rates applicable to power provided under the G2 contract and prevent the
Hidden Hollow Facility from providing power at a higher cost before G2's nameplate capacity is
reached.
YOU ARE FURTHER NOTIFIED that Idaho Power warrants that the Agreement
comports with the terms and conditions of the various Commission Orders applicable to PURP
agreements (Order Nos. 30415 and 31025). The Agreement is for a term of 20 years and
contains the current non-Ievelized published avoided cost rates established by the Commission in
Order No. 31025 for energy deliveries of less than 10 average megawatts ("aMW"). The
Application states that, should the Commission approve the Agreement, Idaho Power intends the
effective date of the Agreement to be December 8 , 2010 - the date the parties entered into the
Agreement.
YOU ARE FURTHER NOTIFIED that Hidden Hollow selected February 28 , 2012
as its Scheduled First Energy Date and its Scheduled Operation Date. Agreement, Appendix B.
Idaho Power asserts that various requirements have been placed upon the Hidden Hollow
Facility in order for Idaho Power to accept the Facility's energy deliveries. Idaho Power states
that it will monitor the Facility s compliance with initial and ongoing requirements through the
term of the Agreement. The Application maintains that all applicable interconnection charges
and monthly operational or maintenance charges under Schedule 72 will be assessed to Hidden
Hollow. Idaho Power states that the Facility is currently in good standing with the generator
interconnection process. Hidden Hollow and Idaho Power have agreed to liquidated damages
and security provisions of $45 per kW of nameplate capacity. Agreement, ~~ 5., 5.
YOU ARE FURTHER NOTIFIED that, 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 Hidden Hollow for purchases
of energy will be allowed as prudently incurred expenses for ratemaking purposes. Agreement ~
21.1.
I The 1100 scfm is an engineering calculated value of the quantity of the average fuel quality required to operate the
first generation units at their nameplate capacity.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32156
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission s Rules
of Procedure, IDAPA 31.01.01.201 through .204. The Commission notes that Modified
Procedure and written comments have proven to be an effective means for obtaining public input
and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission no later
than twenty-one (21) days from the service date of this Order. The comment must contain a
statement of reasons supporting the comment. Persons desiring a hearing must specifically
request a hearing in their written comments. Written comments concerning this Application
shall be mailed to the Commission and Idaho Power at the addresses reflected below:
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise ID 83720-0074
Street Address for Express Mail:
Donovan E. Walker
Lisa D. Nordstrom
Idaho Power Company
1221 West Idaho Street
PO Box 70
Boise ID 83707-0070
Mail: dwalker~idahopower.com
lnordstrom(g;,i dahopo wer. com472 W. Washington Street
Boise ID 83702-5918
Randy C. Allphin
Energy Contract Administrator
Idaho Power Company
1221 West Idaho Street
PO Box 70
Boise ID 83707-0070
Mail: rallphin(g;,idahopower.com
These 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 'Nww.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
ORDER NO. 32156
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set, the Commission will consider this matter on its merits and
enter its Order without a formal hearing. If written comments are received within the time limit
set, the Commission will consider them and, in its discretion, may set the same for formal
hearing.
YOU ARE FURTHER NOTIFIED that the Application and Agreement have been
filed with the Commission and are available for public inspection during regular business hours
at the Commission offices. The Application and Agreement are also available on the
Commission s web site at www.puc.idaho.gov by clicking on "File Room" and then "Electric
Cases.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission s jurisdiction 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 and to implement FERC rules.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure.
Interested persons and the parties may file written comments no later than 21 days from the
service date ofthis Order.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32156
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this jO-f'A
day of January 2011.
ATTEST:
~AJ.
D. Jewell
C mmission Secretary
O:IPC-!O-44 ks
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32156
MARSHA H. SMITH, COMMISSIONER
5tA
MACK A. REDFO
- -= . .
MISSIONER