20120201final_order_no_32451.pdf

Office of the Secretary
Service Date
February 1,2012
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR A )CASE NO.IPC-E-11-27
DETERMINATION REGARDING ITS FIRM )
ENERGY SALES AGREEMENT WITH )
RIVERSIDE INVESTMENTS,LLC.)ORDER NO.32451
__________________________________________________________________________________
)
On December 6,2011,Idaho Power Company filed an Application with the
Commission requesting acceptance or rejection of a 20-year Firm Energy Sales Agreement
(Agreement)between Idaho Power and Riverside Investments,LLC (Riverside).The
Application states that Riverside would sell and Idaho Power would purchase electric energy
generated by the Fargo Drop hydroelectric project (Facility)located near Homedale,Idaho.
Idaho Power asked that its Application be processed by Modified Procedure.
On December 27,2011,the Commission issued a Notice of Application/Notice of
Modified Procedure and established comment deadlines.Order No.32422.Staff was the only
person or party to file comments.By this Order,the Commission approves the Agreement
between Idaho Power and Riverside Investments for the sale and purchase of electric energy.
THE AGREEMENT
The Application states that Riverside proposes to own,operate and maintain a 1.27
MW (maximum capacity,nameplate)generating facility.Application at 2.The Facility will be
a QF under the applicable provisions of the Public Utility Regulatory Policies Act of 1978
(PURPA).The Agreement is for a term of 20 years and contains the published avoided cost rates
established by Commission Order No.32337.Id.The Agreement includes shared ownership of
the renewable energy certificates (RECs)generated over the 20-year term of the Agreement.Id.
at 3.
Riverside selected July 20,2012,as its Scheduled First Energy Date and August 1,
2012,as its Scheduled Operation Date.Id.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 term of the Agreement.Riverside and Idaho Power have agreed to
liquidated damage and security provisions.Agreement ¶1f 5.3,5.8.1.
ORDER NO.32451 1
The Application maintains that all applicable interconnection charges and monthly
operation or maintenance charges under Schedule 72 will be assessed to Riverside.Idaho Power
states that the Facility is currently in the generator interconnection process.“Upon resolution of
any and all upgrades required to acquire transmission capacity for this Facility’s generation,and
upon execution of the FESA and the GIA,this Facility may then be designated as a network
resource.”Id.at 5.
Idaho Power states that the Facility has also been made aware of and accepted the
provisions in the 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 Application notes 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 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.”Application at 6.
By its own terms,the Agreement will 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 Riverside for purchases of energy will be allowed as prudently incurred expenses
for ratemaking purposes.Agreement ¶21.1.
STAFF COMMENTS
Staff noted that this Agreement contains terms and conditions that have become
standard in many other existing PURPA contracts.The Agreement contains the non-levelized
published avoided cost rates in accordance with Commission Order No.32337.Some of Idaho
Power’s more recent PURPA contracts have contained a sharing arrangement with regard to
RECs.Under the terms of this Agreement,RECs would be split equally between Idaho Power
and Riverside from the beginning of the contract through its 20-year term.Agreement ¶8.1.
Staff recommended that the Commission approve all of the Agreement’s terms and
conditions and declare that all payments made by Idaho Power to Riverside for purchases of
energy be allowed as prudently incurred expenses for ratemaking purposes.
ORDERNO.32451 2
DISCUSSION AND CONCLUSIONS
The Idaho Public Utilities Commission has jurisdiction over Idaho Power,an electric
utility,and the issues raised in this matter pursuant to the authority and power granted it 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 (QFs)and to
implement FERC rules.
The Commission has reviewed the record in this case,including the Application,the
Agreement,and the comments of Commission Staff.The Agreement contains the non-levelized
published avoided cost rates established by the Commission in Order No.32337.As represented
and pursuant to contract,under normal and/or average conditions the Facility will not exceed 10
aMW on a monthly basis.As such,we find that the Riverside project is qualified to receive the
current non-levelized published avoided cost rates.We further find it reasonable to allow
payments made under the Agreement as prudently incurred expenses for ratemaking purposes.
ORDER
IT IS HEREBY ORDERED that the Firm Energy Sales Agreement between Idaho
Power and Riverside Investments is approved without change or condition.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (2 1)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §61-626.
ORDERNO.32451 3
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this /
day of February 2012.
PO KJE L N ER,PRESIDENT
•\‘7 .1
MACK A.REDFORD,COMMISSIONER
J:S:5LL
MARSHA H.SMITH,COMMISSIONER
ATTEST:
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Jean D.JeweflJ
ommission Secretary
O:JPC-E-11 -27ks2
ORDERNO.32451 4