20110217Application.pdf

1SIDA~POR~
An IDACORP company
DONOVAN E. WALKER
Lead Counsel
dwalker~idahopower.com
February 17, 2011
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilties Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-11-02
IN THE MATTER OF THE PETITION OF IDAHO POWER COMPANY FOR
AN EXTENSION OF TIME FOR CONTINUATION OF ELECTRICAL
SERVICE BETWEEN IDAHO POWER COMPANY AND THE UNITED
SrnTES DEPARTMENT OF ENERGY
Dear Ms. Jewell:
Enclosed for filng please find an original and seven (7) copies each of Idaho
Power Company's Petition to Extend Term of Special Contract and Motion for Admission
Pro Hac Vice of Idaho Power Company in the above matter.
C1
Donovan E. Walker
DEW:csb
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise. ID 83707
DONOVAN E. WALKER (ISB No. 5921)
JASON B. WILLIAMS
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalker(âidahopower.com
jwilliams(âidahopower.com
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
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zan FEB 17 PM 3: 32
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF
IDAHO POWER COMPANY FOR AN
EXTENSION OF TIME FOR
CONTINUATION OF ELECTRICAL
SERVICE BETWEEN IDAHO POWER
COMPANY AND THE UNITED STATES
DEPARTMENT OF ENERGY.
)
) CASE NO. IPC-E-11-02
)
) PETITION TO EXTEND TERM OF
) SPECIAL CONTRACT
)
)
)
Idaho Power Company ("Idaho Powet' or "Company") in accordance with Idaho
Code §§ 61-501, 502, and 503, and RP 56 (IDAPA 31.01.01.056), hereby respectfully
petitions the Idaho Public Utilties Commission ("Commission") for an Order approving
an extension of the term of the special contract between the Company and the United
States Department of Energy ("DOE") allowing for the continuation of electric service
between Idaho Power and DOE.
In support of this Petition, Idaho Power represents as follows:
I. BACKGROUND
1. The DOE, through its Idaho operations office, operates the facilties at the
Idaho National Laboratory Site located approximately 50 miles west of Idaho Falls,
PETITION TO EXTEND TERM OF SPECIAL CONTRACT - 1
Idaho ("INL Site"). The DOE and its predecessors have been customers of Idaho
Power for many years. Idaho Power supplies electric service to DOE under a special
contract, in accordance with the rates and charges set out in Electric Service Rate
Schedule 30 ("Schedule 30") and its successor schedules.
2. The current special contract between Idaho Power and DOE was
approved by the Commission on May 8, 2006, by Order No. 30030 issued in Case No.
IPC-E-06-12 ("2006 Agreement"). The initial term for the 2006 Agreement ran from May
15, 2006, through May 14, 2007. The 2006 Agreement gives DOE the option to request
up to four, one-year extensions of the 2006 Agreement. The 2006 Agreement has
previously had four additional one-year extensions, all of which were approved by the
Commission. The first extension from May 15, 2007, to May 14, 2008, was approved by
Order No. 30314 in Case No. IPC-E-07-11. The second extension from May 15, 2008,
to May 14, 2009, was approved by Order No. 30536 in Case No. IPC-E-08-08. The
third extension from May 15,2009, to May 14, 2010, was approved by Order No. 30816
in Case No. IPC-E-09-14. The fourth extension from May 15, 2010, to May 14, 2011,
was approved by Order No. 31075 in Case No. IPC-E-10-14 (the "2010 Extension").
Because there are no more options to extend the term of the 2006 Agreement, the 2006
Agreement is set to expire on May 14, 2011.
3. Idaho Power and DOE have worked dilgently toward negotiating a new
special contract to replace the 2006 Agreement. However, the parties need an
additional 120 days past the expiration of the current term which ends on May 14, 2011,
with which to finalize negotiations and execute a new agreement.
4. In April 2010, Idaho Power convened an internal team of legal and
regulatory personnel to begin outlining the issues associated with negotiating a new
PETITION TO EXTEND TERM OF SPECIAL CONTRACT - 2
contract with DOE for the INL Site. Throughout May and June 2010, Idaho Power
personnel continued to work internally on legal, regulatory, and technical issues related
to a new contract. In June and July 2010, Idaho Power field personnel reviewed the
facilties serving the INL Site to determine whether any metering or facilities
management issues existed. In August 2010, Idaho Power engineering personnel
continued to conduct further technical analysis associated with providing service to the
INL Site. By September 2010, Idaho Power had identified, at a general level, potential
new terms and conditions to consider proposing to DOE for the new contract. In
October 2010, Idaho Power conducted a study to evaluate the revenue impacts
associated with implementing the proposed new terms and conditions.
5. Idaho Power and DOE engaged in various levels of dialogue during
November and December 2010 discussing a new contract for the INL Site. Discussions
between Idaho Power and DOE representatives are ongoing.
6. DOE has indicated that they have many steps they must complete as part
of the government contracting process prior to being in a position to execute a new
contract. DOE facilities seeking to enter into electric service agreements are required to
follow a specific DOE procurement process. This process entails several steps, each of
which requires representatives of a DOE facility to prepare information for review and
approval by DOE headquarters in Washington, DC. DOE representatives at the INL
Site have begun this internal procurement process and expect that the administrative
aspects of it wil be completed within the next 60 days.
7. Based upon initial discussions between DOE and Idaho Power, DOE
expects that it wil take at least four months from now for it to be in a position to execute
a new contract with Idaho Power. In particular, DOE anticipates that it wil need to
PETITION TO EXTEND TERM OF SPECIAL CONTRACT - 3
consult with representatives of several DOE Program Ofces to better understand future
electrical requirements at the INL Site as well as examine what factors may cause the
INL Site's electrical requirements to change in the future. These factors could include,
for example and without limitation, incremental loads DOE may wish to locate at the INL
Site over the term of a newly negotiated electric service agreement, as well as any load
reductions DOE may wish to pursue associated with energy efficiency improvements
and renewable energy projects. Currently, it is unclear how long it wil take to complete
these consultations. In addition, DOE has determined that it wil need to undertake
various analytical studies to be in a position to adequately respond to various aspects of
a new service agreement with Idaho Power. DOE has informed Idaho Power that it is
just now formulating a timetable for completing these studies.
8. Importantly, Idaho Powets revenue requirement for the INL Site has been
updated at various times since Idaho Power and DOE executed the 2006 Agreement.
Rates for the INL site have been adjusted during Idaho Powets general rate cases as
well as other rate filings. Thus, while the 2006 Agreement is nearly five-years old, the
rates charged to the INL Site are up-to-date. If the Commission grants the extension of
time requested herein, the existing 2006 Agreement as amended by the 2010 Extension
wil be further updated by any other Idaho Power rate change as ordered by the
Commission. Further, if the Commission does not grant this Petition, the current 2006
Agreement wil expire and there wil be no legal mechanism (i.e., tariff by which Idaho
Power would be able to provide service to the INL Site. Schedule 19, Idaho Power's
schedule to serve its large customers, is capped at 20,000 kilowatts ("kW"). Under
Exhibit A of the current contract, DOE's estimated energy demand at the INL Site
PETITION TO EXTEND TERM OF SPECIAL CONTRACT - 4
ranges from 27,000 kW to 54,000 kW. Thus, DOE is ineligible to received Schedule 19
services at the INL Site.
9. Moreover, Idaho Power does not believe that it wil be able to execute a
new contract with DOE for the INL Site prior to the May 14, 2011, termination date of
the 2010 Extension to the 2006 Agreement. Accordingly, Idaho Power respectfully
requests that the Commission grant a 120-day extension to the term of the existing
2006 Agreement.
II. RECOMMENDED PROCEDURE
10. Because the term of the 2010 Extension to the 2006 Agreement expires
on May 14, 2011, Idaho Power requests that the Commission process this Petition prior
to the expiration of the current term on May 14, 2011. If this proceeding should run past
the expiration of the current term, Idaho Power requests that the Commission approve
an extension of the current term until this Petition is ruled upon by the Commission.
Should the Commission grant an extension of time, Idaho Power wil make a
compliance filng with the Commission to include an executed contract amendment
formally extending the term of the 2006 Agreement. The previous four, one-year
contract term extensions were approved by the Commission with no additional process
or procedure. As was done on those previous occasions, Idaho Power requests that
the Commission issue its Order approving this 120 day contract term extension with no
further process or procedure.
II. COMMUNICATIONS AND SERVICE OF PLEADINGS
11. Communications and service of pleadings with reference to this
Application should be sent to the following:
PETITION TO EXTEND TERM OF SPECIAL CONTRACT - 5
For Idaho Power Company:
Donovan E. Walker
Jason B. Wiliams
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
dwalkerCâidahopower.com
jwilliams(âidahopower.com
Darlene Nemnich
Michael Youngblood
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
d nemnich(âidahopower.com
myoungblood(áidahopower.com
For the United States Department of Energy:
Lot H. Cooke
GC-76/Forrestal
U.S. Department of Energy
1000 Independence Ave., SW
Washington, DC 20585
Lot. Coo ke(á hg .doe.gov
T. Wade Hilebrant
U.S. Department of Energy
Idaho Operations Office, MS 1221
1955 North Fremont Ave.
Idaho Falls, Idaho 83415
hilbtw((id .doe.gov
iv. REQUEST FOR RELIEF
12. Idaho Power respectfully requests that the Commission issue an Order:
(1) approving a 120-day extension to the term of the 2006 Agreement as modified by
the 2010 Extension for the continuation of electric service between Idaho Power and the
DOE and (2) if necessary, approving the continuation of the contract term until the
Commission issues its Order on this Petition.
DATED at Boise, Idaho, this 17tl day of February 2011.
~yu/~
DONOVAN E. WALKER --
Attorney for Idaho Power Company
PETITION TO EXTEND TERM OF SPECIAL CONTRACT - 6
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 17tl day of February 2011 I served a true and
correct copy of PETITION TO EXTEND TERM OF SPECIAL CONTRACT upon the
following named parties by the method indicated below, and addressed to the following:
Commission Staff
Donald L. Howell, II
Deputy Attorney General
Idaho Public Utilties Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
-X Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-X Email Don.Howell((puc.idaho.gov
United States Department of Energy
Lot H. Cooke
GC-76/Forrestal
U.S. Department of Energy
1000 Independence Ave., SW
Washington, DC 20585
Hand Delivered
-X U.S. Mail
_ Overnight Mail
FAX
-X Email Lot.Cooke((hg.doe.gov
T. Wade Hilebrant
U.S. Department of Energy
Idaho Operations Office, MS 1221
1955 North Fremont Ave.
Idaho Falls, Idaho 83415
Hand Delivered
-X U.S. Mail
_ Overnight Mail
FAX
-X E "I hilbtwCâid.doe.gov
PETITION TO EXTEND TERM OF SPECIAL CONTRACT - 7