20111109notice_of_application_order_no_32395.pdf

Office ofthe Secretary
Service Date
November 9,2011
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR )CASE NO.IPC-E-1l-20
TERMINATION OF ITS FIRM ENERGY )
SALES AGREEMENT WITH MAGIC )NOTICE OF APPLICATION
WIND,LLC )
)NOTICE OF
)MODIFIED PROCEDURE
)
________________________________
)ORDER NO.32395
On October 25,2011,Idaho Power Company filed an Application with the
Commission requesting termination of its Firm Energy Sales Agreement (Agreement)with
Magic Wind,LLC.Specifically,Idaho Power requests that the Commission
approve/acknowledge (1)the termination of the Agreement,(2)removal of Magic Wind from
Idaho Power’s interconnection queue;and (3)the disposition of amounts prepaid by Magic Wind
for Idaho Power’s transmission system network upgrades associated with the “cluster group”of
generators that was the subject of Case No.IPC-E-06-21 (the “Cassia Wind”case).Idaho Power
requests that its Application be processed by Modified Procedure.
BACKGROUND
On October 11,2006,Idaho Power and Magic Wind entered into a 20-year
Agreement pursuant to PURPA.Magic Wind’s first energy date was scheduled to be July 31,
2007,and its Scheduled Operation Date was scheduled for December 31,2007.The
Commission approved the Agreement on December 21,2006.Order No.30206.
Magic Wind was unable to meet their December 31,2007,Scheduled Operation Date.
In December 2008,Idaho Power agreed to revise the Scheduled Operation Date to be September
30,2010.Pursuant to the terms of the Agreement,the project must be on-line within ten months
of the Scheduled Operation Date to avoid an event of default.Magic Wind failed to bring the
project on-line.
On August 3,2011,Idaho Power and Magic Wind entered into a final agreement
(“Letter Agreement”)allowing Magic Wind to extend its Scheduled Operation Date to
September 30,2012,so long as Magic Wind posted a delay security in the amount of $45 per
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32395 1
kilowatt of the project’s nameplate capacity by no later than September 30,201 1.In addition,
the Letter Agreement required that Magic Wind pay or otherwise make credit arrangements with
Idaho Power to pay the $500.000 construction deposit for its interconnection (which was past
due from June 30,2011)no later than September 30,2011.The parties agreed that if Magic
Wind failed to post the delay security or the construction deposit by September 30,2011,the
Firm Energy Sales Agreement would be terminated without further notice.Magic Wind did not
post either the required delay security or the required construction deposit by September 30,
2011.On October 4,2011,Idaho Power sent Magic Wind a notice of termination of the Firm
Energy Sales Agreement.
At the time Magic Wind’s Agreement was submitted to the Commission for approval,
the Cassia Wind case was also pending before the Commission.See IPC-E-06-21.The Cassia
Wind case involved requests from (mostly PURPA)generators to integrate approximately 200
MW of new wind generation on Idaho Power’s 138 kilovolt transmission system in the Twin
Falls area (the Cluster Group’).In June 2006,Idaho Power completed engineering studies
which showed it would cost approximately $60 million in network upgrades to interconnect the
Cluster Group to Idaho Power’s transmission system.The Cassia Wind case dealt with issues
related to the appropriate allocation of network upgrade costs among individual projects within
the Cluster Group and Idaho Power’s other customers.
In August 2007.the Commission approved a settlement stipulation in the Cassia
Wind case that set forth the methodology that would be used to allocate network upgrade costs
among the individual Cluster Group projects and other Idaho Power customers.Order No.
30414.As part of the stipulation.Idaho Power estimated through a ‘redispatch study”that the
total interconnection costs could be reduced from $60 million to $11 million if projects agreed to
the potential redispatch of their project’s output.
On March 9,2010,Idaho Power sent a final Facility Study Report to the Cluster
Group members (including Magic Wind).Invoices were sent to each member for their allocable
share of the network upgrades.On April 9,2010,Magic Wind tendered $562,536.75 as payment
for its allocable share.Idaho Power states that as of September 30,2011,$76,569.83 has been
spent on network upgrades from Magic Wind’s $562,536.75 prepayment of allocated cluster
group costs.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32395 2
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that,because the Firm Energy Sales Agreement
was approved by the Commission in Order No.30206,Idaho Power requests that the
Commission acknowledge and/or approve the termination of the Commission-approved
Agreement.Idaho Power also seeks Commission acknowledgement and/or approval for Idaho
Power to remove Magic Wind from its interconnection queue.Magic Wind submitted a request
to the Company’s interconnection queue in May 2005.Because it has failed to timely submit the
required construction deposits necessary for its interconnection to move forward,and ultimately
failed to pay both the necessary delay security and interconnection construction deposits,Idaho
Power states that Magic Wind has now forfeited its position in the interconnection queue.
YOU ARE FURTHER NOTIFIED that the removal of Magic Wind from the
interconnection queue will have a direct impact on the amounts those generators with a junior
queue position to Magic Wind will be required to pay for network upgrades,including other
members of the Cluster Group.Because other members will be directly impacted by the removal
of Magic Wind from the queue,Idaho Power seeks acknowledgement and/or approval of such
removal from the Commission.Finally,Idaho Power seeks acknowledgement and/or approval
for the disposition of Magic Wind’s prepaid funds and the reallocation of the Cluster Group
network upgrade costs.
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.
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 December 15,2011.The comment must contain a statement of reasons supporting the
comment.Persons desiring a hearing must specifically request a hearing in their written
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32395 3
comments.Written comments concerning this Application shall be mailed to the Commission
and Idaho Power at the addresses reflected below:
Commission Secretary Donovan E.Walker
Idaho Public Utilities Commission Idaho Power Company
P0 Box 83720 1221 West Idaho Street
Boise.ID 83 720-0074 P0 Box 70
Boise.ID 83 707-0070
Street Address for Express Mail:E-Mail:
472 W.Washington Street Randy C.Aliphin
Boise,ID 83702-5918 Energy Contract Administrator
Idaho Power Company
1221 West Idaho Street
P0 Box 70
Boise,ID 83707-0070
E-Mail:
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
Commissions 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 Idaho Power at the e-mail addresses listed
above.
YOU ARE FURTHER NOTIFIED that Idaho Pov.’er and Magic Wind may file reply
comments (if necessary)no later than December 22,2011.
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.
YOU ARE FURTHER NOTIFIED that the Application has been filed with the
Commission and is available for public inspection during regular business hours at the
Commission offices.The Application is also available on the Commissions web site at
wv.puc.idaho.gov by clicking on “File Room”and then “Electric Cases.”
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32395 4
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commissions jurisdiction under Title 61 of the Idaho Code and the Public Utility
Regulatory Policies Act of 1978 (PURPA).The Commission has authority under PURPA 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,IDAPA 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 December 15,2011.
IT IS FURTHER ORDERED that Idaho Power and Magic Wind may file reply
comments (if necessary)no later than December 22,2011.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of November 2011.
Z.
\N I A
MACK A.REDFORD,COMMISSIONER
LI
MARSHA H.SMITH,COMMISSIONER
ATTEST:
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J9n D.Jewell’J
COmmission Secretary
O:IPC-E-1 1-20_ks
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32395
PRESIDENT
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