20110310notice_of_application_order_no_32203.pdf

Office of the Secretary
Service Date
March 10 2011
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR A CASE NO. IPC-ll-
DETERMINATION REGARDING A FIRM
ENERGY SALES AGREEMENT WITH NOTICE OF APPLICATION
WESTERN DESERT ENERGY, LLC FOR
THE SALE AND PURCHASE OF NOTICE OF
ELECTRIC ENERGY MODIFIED PROCEDURE
ORDER NO. 32203
On February 2, 2011 , Idaho Power Company filed an Application requesting
acceptance or rejection of a 20-year Firm Energy Sales Agreement (Agreement) between Idaho
Power and Western Desert Energy, LLc. The project (Facility) is located near Oreana, Idaho.
The project will be a "qualifying facility" (QF) under the applicable provisions of the federal
PURP A. Idaho Power requests that its Application be processed by Modified Procedure.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that, on January 28 , 2011 , Idaho Power and
Western Desert entered into an Agreement wherein Western Desert proposes to design,
construct, install, own, operate, and maintain a 5 MW (maximum capacity) wind generating
Facility. Under the terms of the Agreement, the Facility agrees 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. Application at 4. Under normal and/or average conditions, the Facility will not exceed
10 aMW on a monthly basis. Idaho Power warrants that the Agreement comports 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 Agreement
YOU ARE FURTHER NOTIFIED that the Facility has selected September 1 , 2012
as its Scheduled First Energy Date and December 1 , 2012, as its Scheduled Operation Date.
Applications at 5. Idaho Power asserts that various requirements have been placed upon the
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
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32203
term of the Agreement. Idaho Power asserts that the Facility has been advised that delays in the
interconnection or transmission process do not constitute excusable delays and if the Facility
fails to achieve its Scheduled Operation Date delay damages will be assessed. Id. at 6. The
parties have each agreed to liquidated damage 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 terms and conditions and declares
that all payments made by Idaho Power to the Facility for purchases of energy will be allowed as
prudently incurred expenses for ratemaking purposes. Agreement ~ 21.
YOU ARE FURTHER NOTIFIED that Idaho Power s Application specifically notes
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
Application at 2. 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 PURPA QFs. Id. at 3. However, Idaho Power
asserts 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. 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 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.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32203
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 April 7, 2011. 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:
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(fYidahopower.com
lnordstrom(fYi dahopower. co m
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
472 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(fYidahopower.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 www.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 the 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 April 14, 2011.
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.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32203
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, IDAP A 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 April 7, 2011.
IT IS FURTHER ORDERED that Idaho Power may file reply comments no later
than April 14, 2011.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32203
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this /0 r/..
day of March 2011.
ATTEST:
fi-dJD. Jew
Commission Secretary
O:IPC-II-OI ks
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32203
D. KE TON RES ENT
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fuL
MARSHA H. SMITH, COMMISSIONER
~~ISSJONER