20110708notice_of_application_order_no_32290.pdf

Offce of the Secretar
Service Date
July 8, 2011
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR A )
DETERMINATION REGARDING THE )
FIRM ENERGY SALES AGREEMENT )
WITH INTERCONNECT SOLAR )
DEVELOPMENT, LLC, FOR THE SALE )
AND PURCHASE OF ELECTRIC ENERGY. )
)
)
CASE NO. IPC-E-ll-IO
NOTICE OF APPLICATION
NOTICE OF
MODIFIED PROCEDURE
ORDER NO. 32290
On June 17,2011, Idaho Power Company fied an Application with the Commission
requesting acceptance or rejection of a 25-year Firm Energy Sales Agreement (Agreement)
between Idaho Power and Interconnect Solar Development LLC (Interconnect Solar) dated June
7, 2011. The Application states that Interconnect Solar would sell and Idaho Power would
purchase electric energy generated by the Interconnect Solar photovoltaic solar generating
facilty (Facilty) located near Murhy, Idaho. Idaho Power requests that its Application be
processed by Modified Procedure.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED the Application states that Interconnect Solar
proposes to constrct, own, operate and maintain a 20 MW (maximum capacity, nameplate)
photovoltaic solar generating facilty. Application at 2. The Facilty wil be a QF under the
applicable provisions of PURP A.
A. The Agreement
YOU ARE FURTHER NOTIFIED that the Agreement is for a term of25 years and
contains avoided cost rates established pursuant to the Commission's approved Integrated
Resource Plan (IRP) avoided cost methodology as curently required by the Commission for
solar QFs with a design capacity of more than 100 kilowatts (kW). Order No. 32262. Idaho
Power asserts that the 25-year contract term was the result of negotiations that attempted to
balance the paries' interests in a maner that was favorable to Idaho Power customers and to
Interconnect Solar. ¡d. at 3.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDUREORDER NO. 32290 1
YOU AR FURTHER NOTIFIED that Interconnect Solar selected June 1,2012, as
its Scheduled First Energy Date and July 1, 2012, as its Scheduled Operation Date. ¡d. at 3.
Idaho Power asserts that varous requirements have been placed upon the Interconnect Solar
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
term of the Agreement.
YOU AR FURTHER NOTIFIED that Interconnect Solar and Idaho Power have
agreed to liquidated damage and security provisions of $45 per kW of nameplate capacity.
Agreement irir 5.3.2, 5.8.1. Delay Liquidated Damages shall apply if Interconnect Solar fails to
bring the Facility on-line by the Scheduled Operation Date.
YOU AR FURTHER NOTIFIED that Interconnect Solar is responsible to complete
a Generation Interconnection Agreement (GIA) and is responsible for all costs associated with
interconnection of the Facility to Idaho Power's system and any necessary transmission upgrades
for its generation to serve load. Idaho Power states that, at the time this Application was filed,
the GIA has not yet been signed and the required payment for interconnection and transmission
upgrades has not been paid. Idaho Power estimates that, after payment is made, 18 months is
required for Idaho Power to complete the interconnection and transmission facilities.
YOU AR FURTHER NOTIFIED that Idaho Power maintains that Interconnect
Solar has been expressly advised in writing that the Scheduled Operation Date it selected was
prior to such time that the interconnection/transmission facilities are scheduled to be constrcted
and completed. Application at 8. Idaho Power states that Interconnection Solar has
acknowledged and expressly agreed to accept all risk associated with not meeting the Scheduled
Operation Date, including forfeiture of the Delay Securty, and potential termination of the
Agreement. ¡d.
YOU AR FURTHER NOTIFIED that the paries have agreed to terms providing for
each pary's 50 percent ownership of any environmental attributes, including RECs, generated by
the Facility for the full 25-year term ofthe Agreement.
YOU AR FURTHER NOTIFIED that energy prices in this Agreement are derived
from Idaho Power's AURORA economic dispatch model for this Facility's estimated energy
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURORDER NO. 32290 2
shape as specified by Commission requirements for the IR-based avoided cost methodology.
¡d. at 5. The energy prices contain the previously approved differentiation between Heavy Load
and Light Load pricing, as well as different seasonal prices. ¡d. This Agreement adds Heavy
Load Peak pricing to the months of July and August. The energy price identified by the IRP
methodology for this Facility is equivalent to a 20-year levelized price of$105.15 per MWh. ¡d.
However, Idaho Power states that the actual energy pricing stream varies throughout the term of
the contract based upon the month and time of day durng which the energy is delivered to Idaho
Power. ¡d.
YOU AR FURTHER NOTIFIED that, by its own terms, the Agreement wil not
become effective until the Commission has approved all of the Agreement's terms and
conditions and declares that all payments made by Idaho Power to Interconnect Solar for
purchases of energy wil be allowed as prudently incured expenses for ratemaking purposes.
Agreement ir 21.1.
NOTICE OF MODIFIED PROCEDURE
YOU AR FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal hearng 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, IDAP A 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 paricipation.
YOU AR FURTHER NOTIFIED that any person desiring to state a position on this
Application may fie a wrtten comment in support or opposition with the Commission no later
than August 4, 2011. The comment must contain a statement of reasons supporting the
comment. Persons desiring a hearng must specifically request a hearing in their wrtten
comments. Written comments concerning this Application shall be mailed to the Commission
and Idaho Power at the addresses reflected below:
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURORDER NO. 32290 3
Commission Secretar
Idaho Public Utilties Commission
PO Box 83720
Boise, ID 83720-0074
Street Address for Express Mail:
Donovan E, Walker
Lead Counsel
Idaho Power Company
l221 West Idaho Street
POBox 70
Boise, ID 83707-0070
E-Mail: dwalkerCiidahopower.com
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
E-Mail: rallphincmidahopower.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 ww.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 Idaho Power at the e-mail addresses listed
above.
YOU AR FURTHER NOTIFIED that Idaho Power and Interconnect Solar may file
reply comments (if necessar) no later than August 11,2011.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set, the Commission wil consider this matter on its merits and
enter its Order without a formal hearing. If wrtten comments are received within the time limit
set, the Commission wil consider them and, in its discretion, may set the same for formal
hearing.
YOU ARE FURTHER NOTIFIED that the Application and Agreement have been
fied 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 ww.puc.idaho.gov by clicking on "File Room" and then "Electric
Cases."
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDUREORDER NO. 32290 4
YOU AR FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission's jursdiction under Title 61 of the Idaho Code and the Public Utility
Regulatory Policies Act of 1978 (PUR A). The Commission has authority under PUR 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 AR FURTHER NOTIFIED that all proceedings II this matter wil be
conducted pursuant to the Commission's Rules of Procedure, IDAPA 31.01.01.000, et seq.
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure.
Interested persons and the paries may file wrtten comments no later than August 4,2011.
IT IS FURTHER ORDERED that Idaho Power and Interconnect Solar may file reply
comments (if necessary) no later than August 11,2011.
o~DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 0
day of July 2011.
WI~NT
~~~ÅMACK A. REDFO~ïšNER
~H,cáLY
ATTEST:
Êå~1 D. Jewe
ommlSSlOn Secretary
O:IPC-E-ll-lO_ks
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURORDER NO. 32290 5