20110224notice_of_applications_order_no_32189.pdf

Office of the Secretary
Service Date
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
February 24 2011
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR A
DETERMINATION REGARDING A FIRM
ENERGY SALES AGREEMENT BETWEEN
IDAHO POWER AND MURPHY FLAT MESA
LLC
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR A
DETERMINATION REGARDING A FIRM
ENERGY SALES AGREEMENT BETWEEN
IDAHO POWER AND MURPHY FLAT
ENERGY, LLC
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR A
DETERMINATION REGARDING A FIRM
ENERGY SALES AGREEMENT BETWEEN
IDAHO POWER AND MURPHY FLAT WIND
LLC
) CASE NO. IPC-10-
) CASE NO. IPC-10-
) CASE NO. IPC-10-
) NOTICE OF APPLICATIONS
) NOTICE OF
) MODIFIED PROCEDURE
) ORDER NO. 32189
On December 16, 2010, Idaho Power Company filed Applications requesting
acceptance or rejection of three 20-year Firm Energy Sales Agreements (Agreements) between
Idaho Power and Murphy Flat Mesa, LLC; Murphy Flat Energy, LLC; and Murphy Flat Wind
LLc. All three projects (Facilities) are located near Murphy, Idaho. The projects will 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 APPLICATIONS
YOU ARE HEREBY NOTIFIED that, on December 15 , 2010, Idaho Power and each
of the three wind projects entered into their respective Agreements. Brian Jackson, Manager of
American Wind Group, LLC signed each Agreement as the authorized manager of each QF
Facility. Applications at 2. 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
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32189
deliveries of less than 10 aMW. Applications at 4. The nameplate rating of each Facility is 25
MW. Under normal and/or average conditions, each Facility will not exceed 10 aMW on a
monthly basis. Idaho Power warrants that the Agreements comport with the terms and
conditions of the various Commission Orders applicable to PURP A agreements for wind
resources. Order Nos. 30415, 30488, 30738 and 31025.
A. The Agreements
YOU ARE FURTHER NOTIFIED that each Facility has selected December 31
20 II , as its Scheduled First Energy Date and December 31 , 2012 , as its Scheduled Operation
Date. Applications at 5. 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. 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
December 31 , 2012 , Scheduled Operation Date.
YOU ARE FURTHER NOTIFIED that Idaho Power asserts 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. Id. at 7. 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. The
parties have each agreed to liquidated damage and security provisions of $45 per kW of
nameplate capacity. Agreement ,-r,-r 5.3.2
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
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
NOTICE OF APPLICA nONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32189
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." Applications at 7-
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,-r 21.
YOU ARE FURTHER NOTIFIED that Idaho Power s Applications specifically note
the Joint Petition it 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 k
Applications at 2. Idaho Power states that it is aware of and in compliance with its ongoing
obligation under federal law, FERC regulations, and Commission Orders to enter into power
purchase agreements with PURPA QFs. Id. at 3. However, Idaho Power asserts in each of its
Applications that the Commission has specifically directed the utility "to assist the Commission
in its gatekeeper role of assuring that utility customers are not being asked to pay more than the
Company s avoided cost for (its) QF contracts.Id. at 3-4. Idaho Power further states 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 three Applications 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
these Applications or any individual Application may file a written comment in support or
opposition with the Commission no later than March 17 2011. The comment must contain a
statement of reasons supporting the comment. Persons desiring a hearing must specifically
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32189
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:
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(~jdahopower.com
lnordstromrilli dahopower. 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: rallphinrillidahopower.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
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 March 24, 2011.
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 the three Applications have been filed with
the Commission and are available for public inspection during regular business hours at the
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32189
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 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 no later than March 17 , 20 II.
IT IS FURTHER ORDERED that Idaho Power may file reply comments no later than
March 24 2011.
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32189
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this iff-/'
day of February 2011.
/.~
. KE PTON, PRE DENT
MARSHA H. SMITH, COMMISSIONER
MACK A. REDFORD, COMMISSIONER
ATTEST:
fii;:t
E\ . t .AJ n D. Jew
Commission Secretary
O:IPC-IO-56 IPC-IO-57 IPC-IO-58 ks
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32189