HomeMy WebLinkAbout20111219Decision Memo.pdfDECISION MEMORANDUM 1
DECISION MEMORANDUM
TO: COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
COMMISSION STAFF
FROM: KRISTINE SASSER
DEPUTY ATTORNEY GENERAL
DATE: DECEMBER 19, 2011
SUBJECT: IDAHO POWER’S APPLICATION FOR A DETERMINATION
REGARDING THE FIRM ENERGY SALES AGREEMENT WITH
RIVERSIDE INVESTMENTS, CASE NO. IPC-E-11-27
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.
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 ¶¶ 5.3, 5.8.1.
The Application maintains that all applicable interconnection charges and monthly
operation or maintenance charges under Schedule 72 will be assessed to Riverside. Idaho Power
DECISION MEMORANDUM 2
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.
Idaho Power requests that its Application be processed by Modified Procedure
pursuant to Commission Rules of Procedure 201-204. IDAPA 31.01.01.201-.204.
STAFF RECOMMENDATION
Staff recommends that the case be processed by Modified Procedure.
COMMISSION DECISION
Does the Commission wish to process this case under Modified Procedure?
M:IPC-E-11-27_ks