20120727Application.pdf

RE C El
IDAHO
POWER®
An IDACORP Company
JULIA A. HILTON
Corporate Counsel
jhiIton(jdahopower.com
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I
July 27, 2012
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. IPC-E-12-21
Accounting Order Regarding PURPA Delay Damages - Idaho Power
Company's Application
Dear Ms. Jewell:
Enclosed for filing in the above matter are an original and seven (7) copies of Idaho
Power Company's Application.
Very truly yours,
Julia A. Hilton
JAH:evp
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
DONOVAN E. WALKER (ISB No. 5921)
JULIA A. HILTON (ISB No. 7740)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
dwaIker(ãidahopower.com
ihiIton(ãidahoDower.com
IR CCE1VED
21JUL27 PM 14:26
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Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR AN ) CASE NO. IPC-E-12-21
ACCOUNTING ORDER REGARDING )
PURPA DELAY DAMAGES. ) APPLICATION
Idaho Power Company ("Idaho Power" or "Company"), in accordance with the
provisions of Idaho Code § 61-524, RP 052, and RP 201, et seq., hereby applies for an
accounting order of the Idaho Public Utilities Commission ("Commission") for authority
to include damages received under Public Utility Regulatory Policies Act of 1978
("PURPA") contracts in the purchase power account, which will then flow back to
customers through the Power Cost Adjustment ("PCA") mechanism. This Application is
based on the following:
I. BACKGROUND
Under PURPA, Idaho Power is obligated to enter into Firm Energy Sales
Agreements ("FESA" or "Agreement") with Qualifying Facilities ("QF"), which
Agreements must be approved by the Commission. The parties have certain rights and
APPLICATION -1
responsibilities under these Commission-approved FESAs, one of which is Idaho
Power's right to recover damages for certain aspects of a QFs non-performance of
contractual obligations. While the circumstances that must exist for the Company to
seek recovery of these damages occur only infrequently, Idaho Power expects that it
will be required to recover these damages from time to time and potentially in the near
future. With that said, Idaho Power requests that the Commission issue an accounting
order authorizing the Company to provide 100 percent of such funds to customers
through the PCA mechanism.
In Case No. IPC-E-10-22, Yellowstone Power, Inc. ("Yellowstone") failed to
achieve its Scheduled Operation Date. Idaho Power and Yellowstone came to a
settlement agreement whereby Idaho Power would collect $200,000 of the Delay
Security and non-performance damages. This Agreement was filed with the
Commission and is pending the Commission's decision. Similarly, in Case No. IPC-E-
10-44, Hidden Hollow Energy 2, LLC ("Hidden Hollow") failed to meet its Scheduled
Operation Date. Idaho Power notified Hidden Hollow that delay damages were due and
payable as a result. Upon Hidden Hollow's failure to pay those damages, Idaho Power
collected the delay damage security posted by Hidden Hollow. Hidden Hollow
subsequently filed a complaint alleging a claim of force majeure. With the pending
resolution of these matters by the Commission, the Company is compelled to seek
authorization regarding the process and accounting to flow the potential collection of
these damages back to Idaho Power's customers.
Idaho Power proposes that these liquidated delay damages be placed into an
account which would then allow for the funds to flow back directly to its customers
through the PCA. While the damages associated with the Yellowstone and Hidden
APPLICATION -2
Hollow projects' failure to achieve their Scheduled Operation Dates are the catalyst for
the request in this case, Idaho Power seeks Commission approval to treat any recovery
of delay damages from PURPA projects by using the same accounting method.
II. PROPOSED ACCOUNTING ENTRIES
Idaho Power proposes to record the receipt of funds for liquidated damages by
debiting either Federal Energy Regulatory Commission ("FERC") Account 143 (Other
Accounts Receivable) for funds to be received or if the funds are already on deposit with
the Company by debiting FERC Account 235 (Customer Deposits) and crediting FERC
Account 555 (Purchased Power). The Company would then record the same amount
debiting FERC Account 557 (Other Expenses) and crediting the FERC Account 182.3
(Regulatory Asset/PCA). The effect of these entries will be a direct benefit to the
Company's customers in the form of a reduction in net power supply expense.
III.MODIFIED PROCEDURE
The Company requests that this Application be processed under RP 201, et seq.,
allowing for consideration of issues to be processed under Modified Procedure; i.e., by
written submissions rather than by an evidentiary hearing.
IV.SERVICE OF PLEADINGS
Service of pleadings, exhibits, orders, and other documents relating to this
proceeding should be served on the following:
Donovan E. Walker
Julia A. Hilton
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707-0070
dwalkeridahopower.com
jhiltoncidahopower.com
Regulatory Dockets
dockets(idahoDower.com
Michael J. Youngblood
Doug Jones
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707-0070
myounqbloodcidahopower.com
d jonesidahopower.com
APPLICATION -3
V. CONCLUSION
WHEREFORE, Idaho Power respectfully requests that the Commission issue an
order providing Idaho Power with authority to treat any recovery of delay damages from
PURPA projects as described in greater detail above.
Respectfully submitted this 27th day of July 2012.
/"' LWZc 4
WA A. I1-TON
Attorney for Idaho Power Company
APPLICATION -4