20110131Comments.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 Commìssìon Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR APPROV AL )
OF A FIRM ENERGY SALES AGREEMENT )
WITH SE HAZELTON A, L.P. FOR THE SALE )
AND PURCHASE OF ELECTRIC ENERGY. )
)
CASE NO. IPC-E-IO-45
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Publìc Utìltìes Commìssìon, by and through ìts
Attorney of record, Krìstìne A. Sasser, Deputy Attorney General, and ìn response to the Notìce of
Applìcatìon and Notìce of Modìfied Procedure ìssued ìn Order No. 32157 on Januar 10,2011, ìn
Case No. IPC-E-10-45, submìts the fol1owìng comments.
BACKGROUND
On December 10,2010, Idaho Power Company fied an Applìcatìon wìth the Commìssìon
requestìng approval of a 15-year Fìrm Energy Sales Agreement (Agreement) between Idaho Power
and SE Hazelton A, L.P. (Hazelton) dated December 8, 2010. The Applìcatìon states that Hazelton
would sell and Idaho Power would purchase electrìc energy generated by the Hazelton A
Hydroelectrìc Project (Facìlty) located near Jerome, Idaho.
The Applìcatìon states that Hazelton has, ìn complìance wìth an existing agreement
approved by the Commìssìon ìn February 1989 (Order No. 22326), desìgned, constructed, ìnstalled,
STAFF COMMENTS 1 JANUARY 31, 2011
owns, operates and maìntaìns an 8.1 MW hydroelectrìc generatìng facìlty. i The present Agreement
has been negotìated to replace the exìstìng agreement whìch expìred on December 31, 2010. Idaho
Power warants that the Agreement comports wìth the terms and condìtìons of the varìous
Commìssìon Orders applìcable to PURP A agreements (Order Nos. 30415 and 31025).
The Agreement contaìns the current non-Ievelìzed publìshed avoìded cost rates establìshed
by the Commìssìon ìn Order No. 31025 for energy delìverìes of less than 10 average megawatts
("aMW"). The nameplate ratìng of the Facìlìty ìs 8.1 MW. Hazelton has elected January 1,201 i,
as ìts Fìrst Energy Date and Scheduled Operatìon Date.
Sìnce thìs Facìlìty ìs already ìnterconnected and operatìng under ìts exìstìng agreement, the
processìng to attaìn the Fìrst Energy and Scheduled Operatìon Date under thìs Agreement wìl
ìnclude revìew and eìther acceptance or updatìng of prevìously provìded documentatìon as well as
any new requìrements as specìfied by thìs Agreement. Applìcatìon at 4. The Applìcatìon states
that, should the Commìssìon approve the Agreement, Idaho Power ìntends the effectìve date of the
Agreement to be January i, 2011.
Idaho Power maìntaìns that the Facìlty ìs ìn complìance wìth the Company's curent Tarìff
Schedule 72 and ìnterconnectìon and transmìssìon processes. Even though the Facìlìty wìl
continue to utìlze ìts exìstìng ìnterconnectìon and transmìssìon facìltìes and capacìty, Idaho Power
wìl requìre completìon of a Generator Interconnectìon Agreement (GIA) and Transmìssìon Servìce
Requests (TSR) ìn order to brìng the Facìlty up-to-date wìth Idaho Power's current tarìffs and
processes. Hazelton and Idaho Power have agreed to lìquìdated damages and securìty provìsìons of
$45 per kW of nameplate capacìty. Agreement, ~~ 5.3.2, 5.8.1.
By ìts own terms, the Agreement wìl not become effectìve until the Commìssìon has
approved al1 of the Agreement's terms and condìtìons and declares that all payments made by Idaho
Power to Hazelton for purchases of energy wìl be allowed as prudently ìncurred expenses for
ratemakìng puroses. Agreement ~ 21.1.
STAFF ANALYSIS
As stated earlìer, the Agreement submìtted for approval ìs successor agreement to an earlìer
20-year power sales agreement for the same facìlty that expìred on December 31, 2010. The
Hazelton A project has operated successfully for 20 years, and Staff has no reason to belìeve that ìt
i Hazelton is an irigation canal hydroelectric facilty that generates power only during the irrigation season.
STAFF COMMENTS 2 JANUARY 31, 2011
cannot contìnue to operate successfully for the proposed 15-year term of the new Agreement. The
project ìs stìl certìfied as a Qualìfyìng Facìlty under FERC rules; consequently, Staffbelìeves that
ìt ìs entìtled to a new power sales agreement at publìshed avoìded cost rates.
Staff has revìewed the Agreement and confirms that ìt comports wìth al1 of the terms and
condìtìons of the varous Commìssìon Orders applìcable to PURP A agreements. The Agreement ìs
substantìal1y ìdentìcal to other recently-approved contracts, and presents no new ìssues that merìt
dìscussìon by Staff.
Although Idaho Power fied a Joìnt Petìtìon wìth the Commìssìon on November 5,2010,
seekìng a reductìon ìn the publìshed avoìded cost rate elìgìbìlty cap from 10 aMW to 100 k W2,
Idaho Power does not belìeve that thìs Agreement should be ìmpacted by that filìng. Staff agrees.
The Agreement was sìgned by Hazelton A on December 7, 2010 and by Idaho Power on December
8,2010. Moreover, the fiìng of the Applìcatìon seekìng approval of the Agreement was prìor to
December 14,2010, the effectìve date establìshed by the Commìssìon for ìts decìsìon ìn Case No.
GNR-E-10-04 on whether to grant the Joìnt Petìtìon to reduce the publìshed avoìded cost elìgìbìlty
cap.
RECOMMENDATIONS
Staff recommends that the Commìssìon approve al1 of the Agreement's terms and condìtìons
and declare that al1 payments made by Idaho Power to Hazelton for purchases of energy wìl be
al10wed as prudently ìncurred expenses for ratemakìng purposes.
Respectful1y submìtted thìs 31 ~ day of January 201 i.
~Q.a.~_~eAšasser
Deputy Attorney General
Technìcal Staff: Rìck Sterlìng
i: umisc: commentsipce i 0.45ksrps comments
2 Case No. GNR-E-lO-04.
STAFF COMMENTS 3 JANUARY 31, 2011
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 31sT DAY OF JANUARY 2011,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-1O-45, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
DONOVAN E WALKER
LISA D NORDSTROM
IDAHO POWER COMPANY
POBOX 70
BOISE ID 83707-0070
E-MAIL: dwalker(iìdahopower.com
lnordstrom(iidahopower.com
RANDY C ALLPHIN
ENERGY CONTRACT ADMIN
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: rallphìn(iidahopower.com
STEVE CHAMPAGNE
SE HAZELTON A, LP
ONE TECH DR STE 220
ANDOVER MA 01810
-.~
SECRETAR
CERTIFICATE OF SERVICE