20110110notice_of_application_order_no_32154.pdf

Office of the Secretary
Service Date
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
January 10 2011
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR A
DETERMINATION REGARDING A FIRM
ENERGY SALES AGREEMENT BETWEEN
IDAHO POWER AND DEEP CREEK WIND
PARK, LLC
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR A
DETERMINATION REGARDING A FIRM
ENERGY SALES AGREEMENT BETWEEN
IDAHO POWER AND COTTONWOOD WIND
PARK, LLC
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR A
DETERMINATION REGARDING A FIRM
ENERGY SALES AGREEMENT BETWEEN
IDAHO POWER AND ROGERSON FLATS
WIND PARK, LLC
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR A
DETERMINATION REGARDING A FIRM
ENERGY SALES AGREEMENT BETWEEN
IDAHO POWER AND SALMON CREEK WIND
PARK, LLC
) CASE NO. IPC-I0-
) CASE NO. IPC-I0-
) CASE NO. IPC-I0-
) CASE NO. IPC-I0-
) NOTICE OF APPLICATIONS
) NOTICE OF
) MODIFIED PROCEDURE
) ORDER NO. 32154
On December 10, 2010, Idaho Power Company filed Applications requesting an
Order accepting or rejecting four 20-year Firm Energy Sales Agreements (Agreements) between
Idaho Power and Deep Creek Wind Park, LLC; Cottonwood Wind Park, LLC; Rogerson Flats
Wind Park, LLC; and Salmon Creek Wind Park, LLc. The four projects (Facilities) are all
located near Rogerson, Idaho. The identical Applications recite that each wind generating
project will have a maximum capacity amount of 20 MW. The projects will all be "qualifying
facilities" (QFs) under the applicable provisions of the federal PURP A. Idaho Power requests
that its Applications be processed by Modified Procedure.
NOTICE OF APPLICA nONS
NonCE OF MODIFIED PROCEDURE
ORDER NO. 32154
NOTICE OF APPLICATIONS
YOU ARE HEREBY NOTIFIED that, on December 10 2010, Idaho Power and each
of the four wind projects entered into their respective Agreements. Under the terms of the
Agreements, the wind projects each agree to sell electric energy to Idaho Power for a 20-year
term using the current non-Ievelized published avoided cost rates as currently established by the
Commission in Order No. 31025 for energy deliveries of less than 10 aMW. Idaho Power
warrants that the Agreements comport with the terms and conditions of the various Commission
Orders applicable to PURPA agreements for a wind resource. Order Nos. 30415 30488 30738
and 31025.
A. The Agreements
YOU ARE FURTHER NOTIFIED that each Facility has selected May 30, 2012, as
its Scheduled First Energy Date and June 30, 2012, as its Scheduled Operation Date.
Agreement, Appendix B. Idaho Power asserts that various requirements have been placed upon
the Facilities in order for Idaho Power to accept the Facilities ' energy deliveries. Idaho Power
states that it will monitor the Facilities' compliance with initial and ongoing requirements
through the term of the Agreements. The parties have each agreed to liquidated damages and
security provisions of$45 per kW of nameplate capacity. Agreement, ~~ 5., 5.
YOU ARE FURTHER NOTIFIED that Idaho Power asserts that it has advised each
Facility of the Facility s responsibility to work with Idaho Power s delivery business unit to
ensure that sufficient time and resources will be available for delivery to construct the
interconnection facilities, and transmission upgrades if required, in time to allow each Facility to
achieve its June 30, 2012 , Scheduled Operation Date. The Applications state that each Facility
has been advised that delays in the interconnection or transmission process do not constitute
excusable delays and if a Facility fails to achieve its Scheduled Operation Date delay damages
will be assessed. Application at 6. The Applications further maintain that each Facility has
acknowledged and accepted the risk inherent in proceeding with its Agreement without
knowledge of the requirements of interconnection and possible transmission upgrades. Id. at 7.
YOU ARE FURTHER NOTIFIED that Idaho Power states that each Facility has also
been made aware of and accepted the provisions in each Agreement and Idaho Power s approved
Schedule 72 regarding non-compensated curtailment or disconnection of its Facility should
certain operating conditions develop on Idaho Power s system. The Applications note that the
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32154
parties ' intent and understanding is that "non-compensated curtailment would be exercised when
the generation being provided by the Facility in certain operating conditions exceeds or
approaches the minimum load levels of (Idaho Power s) system such that it may have a
detrimental effect upon (Idaho Power s) ability to manage its thermal , hydro, and other resources
in order to meet its obligation to reliably serve loads on its system.Id.
YOU ARE FURTHER NOTIFIED that, by their own terms, the Agreements will not
become effective until the Commission has approved all of the terms and conditions and declares
that all payments made by Idaho Power to the Facilities for purchases of energy will be allowed
as prudently incurred expenses for ratemaking purposes. Agreement ~ 21.
YOU ARE FURTHER NOTIFIED that Idaho Power s Applications specifically note
the Joint Petition filed with the Commission on November 5 , 2010, requesting an immediate
reduction in the published avoided cost rate eligibility cap from 10 aMW to 100 kW.
Application at 2. The Commission is processing the case by Modified Procedure with a date
scheduled for oral argument. Order No. 32131. Idaho Power states that it is aware of and in
compliance with its ongoing obligation under federal law, FERC regulations, and Idaho Public
Utilities Commission Orders to enter into power purchase agreements with PURP A QFs. Id.
3. However, Idaho Power asserts in each of its wind park Applications that "the request in this
Application. . . is made with the specific reservation of rights and incorporation of the averments
set forth in the Joint Petition regarding the possible negative effects to the (sic) both the utility
and its customers of additional and unfettered PURP A QF generation on system reliability,
utility operations, and costs of incorporating and integrating such a large penetration level of
PURPA QF generation into the utility s system.
YOU ARE FURTHER NOTIFIED that Idaho Power s Applications maintain "that
the continuing and unchecked requirement for the Company to acquire additional intermittent
and other QF generation regardless of its need for additional energy or capacity on its system not
only circumvents the Integrated Resource Planning process and creates system reliability and
operational issues, but it also increases the price its customers must pay for their energy needs.
Id. at 4.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal hearing for these four Applications and will proceed
NOTICE OF APPLICA nONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32154
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 the four Applications have been filed with the
Commission and are available for public inspection during regular business hours at the
Commission offices. The Applications 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 any person desiring to state a position on
these Applications or any individual Application may file a written comment in support or
opposition with the Commission within 21 days from the 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 any of
these Applications 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:
472 W. Washington Street
Boise, ID 83702-5918
Donovan E, Walker, Senior Counsel
Lisa Nordstrom, Lead Counsel
Idaho Power Company
1221 West Idaho Street
PO Box 70
Boise , ID 83707-0070
Mail: dwalker(illidahopower. com
lnordstrom(illidahopower. com
Randy C. Allphin
Energy Contract Administrator
Idaho Power Company
1221 West Idaho Street
PO Box 70
Boise , ID 83707-0070
Mail: rallphin(illidahopower.com
Comments should contain the case captions and case numbers 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 numbers as they appear on the front of this
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32154
document. These comments must also be sent to Idaho Power at the e-mail addresses listed
above.
YOU ARE FURTHER NOTIFIED that Idaho Power may file reply comments (if
necessary) no later than 23 days after the service date of this Order.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set, the Commission will consider each Application on its merits
and enter Orders 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 all proceedings in these cases 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 regarding these Applications
will be conducted pursuant to the Commission s Rules of Procedure, IDAPA 31.01.01.000
seq.
ORDER
IT IS HEREBY ORDERED that these cases be processed under Modified Procedure.
Interested persons and the parties may file written comments within 21 days of the date of this
Order.
IT IS FURTHER ORDERED that Idaho Power may file reply comments no later than
23 days after the date of this Order.
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32154
DONE by Order ofthe Idaho Public Utilities Commission at Boise, Idaho this
j()
day of January 2011.
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MD. KEMPT , P IDENT
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MARSHA H. SMITH, COMMISSIONER
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MACK A. REDFORD, COMMISSIONER
ATTEST:
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J a D. Jewell
Commission Secretary
O:IPC-I 0-47 _IPC-IO-IPC-1O-49 _IPC-E- I 0-
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32154