20130319final_order_no_32763.pdf

Office of the Secretary
Service Date
March 19.2013
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE TERMINATION )
OF THE FIRM ENERGY SALES )CASE NO.IPC-E-13-03
AGREEMENT BETWEEN IDAHO POWER )
COMPANY AND DYNAMIS ENERGY,LLC )ORDER NO.32763
_________________________________________________________________________________
)
On March 7,2013,Idaho Power Company moved the Commission to approve Idaho
Power’s March 6,2013 Settlement Agreement with Dynamis Energy,LLC.If approved,the
Settlement Agreement will immediately terminate the November 16,2011 Firm Energy Sales
Agreement (“FESA”)pursuant to which Idaho Power is to buy electricity fiom Dynamis under
the Public Utility Regulatory Policies Act of 1978 (“PURPA”).Idaho Power asks the
Commission to approve the Settlement Agreement “without material condition or modification,”
pursuant to RP 274 or via modified procedure.See Idaho Power Company’s Motion for
Approval of Settlement Agreement (“Motion”)at 3.
BACKGROUND
Under the FESA,Dynamis is to own and operate a 22 MW landfill waste-to-energy
facility near Boise in Idaho Power’s service territory,and Idaho Power is to buy electricity
produced by that facility.The FESA contains a scheduled operation date of February 15,2014.
The Commission approved the FESA on February 24,2012.See Order No.32470,Case No.
IPC-E-1 1-25.
THE MOTION
According to Idaho Power’s Motion,on or about January 4,2013,Dynamis asked the
Company to voluntarily terminate the FESA.Motion at 2.As the FESA does not discuss
voluntary termination before the scheduled operation date,the parties executed the Settlement
Agreement to discuss that situation.It provides:(1)the parties will immediately terminate the
FESA;(2)Idaho Power will collect a confidential amount of damages from Dynamis;(3)
Dynarnis will terminate the Generator Interconnection Agreement (“GIA”);and (4)all
interconnection deposit refunds,equipment removal,etc.will be in accordance with the GIA and
Schedule 72.Id.The Settlement Agreement further states that the Commission must approve it
before it takes effect.Id.at 2-3.Idaho Power’s Motion represents that the Settlement
ORDER NO.32763 1
Agreement is in the public interest and a fair and equitable final resolution to this matter.Id.at
STAFF REVIEW AND RECOMMENDATION
After reviewing the record and the Settlement Agreement,Staff recommended the
Commission approve the Settlement Agreement.Staff concurred the proposed settlement is
reasonable and in the public interest.First,ratepayers potentially will avoid paying about $189
million (with a net present value of $82 million)to Dynamis over the 20-year term of the
Agreement.Second,Idaho Power will retain a portion of the security deposit as damages while
returning the balance to Dynamis.Finally,settlement will resolve this matter without litigation
and thus conserve both time and money resources.
Given the benefits of the proposed settlement,Staff believes it is appropriate for the
Commission to approve it without further proceedings.Pursuant to RP 274,the Commission has
the discretion to determine the manner in which it considers proposed settlement.Here,the two
parties have agreed to resolve their private dispute,and Idaho Power and Staff assert the
settlement is reasonable and in the public interest.
DISCUSSION AND FINDINGS
Procedural Rule 276 provides that the Commission is not bound by the parties’
Settlement Agreement.The Commission will “independently review any settlement proposed to
it to determine whether the settlement is just,fair and reasonable,in the public interest,or
otherwise in accordance with law or regulatory policy.”Id.The Commission may accept,reject,
or modify settlement provisions.Moreover,proponents of settlement carry the burden of
showing that the settlement is reasonable,in the public interest,or otherwise in accordance with
law or regulatory policy.RP 275.When reviewing a settlement,the Commission will prescribe
appropriate procedures to consider the settlement.RP 274.For example,the Commission may
summarily accept settlement of an essentially private dispute or may convene an evidentiary
hearing to consider the reasonableness of the settlement.
After reviewing the underlying FESA,the Motion,and the Settlement Agreement,we
find the Settlement Agreement is reasonable and in the public interest.Dynamis,Idaho Power,
and ratepayers will receive significant benefits under the settlement.The Settlement Agreement
allows Idaho Power to retain a portion of the security deposit while returning the balance to
Dynamis.Resolving this matter now avoids litigation and allows the parties to conserve their
ORDER NO.32763 2
resources.As we have previously said,equitable settlements can represent a significant benefit
to parties and bring disputes to reasonable conclusions.RP 354-55;Aguirre v.Hamlin,80 Idaho
176.327 P.2d 349 (1958).
We further find that given the facts of this case and the nature of this settlement,
further proceedings are not necessary.Pursuant to our RP 274,the Commission has the
discretion to accept settlement of a private dispute.On the facts of this case,we find that the
proposed settlement is reasonable and in the public interest.Consequently,we approve the
Settlement Agreement.
ORDER
IT IS HEREBY ORDERED that Idaho Power Company’s Motion for Approval of
Settlement Agreement is granted.
THIS IS A FINAL ORDER.Any person interested in this Order (or in issues finally
decided by this Order)or in interlocutory Orders previously issued in this Case No.IPC-E-13-03
may petition for reconsideration within twenty-one (21)days of the service date of this Order
with regard to any matter decided in this Order or in interlocutory Orders previously issued in
this case.Within seven (7)days after any person has petitioned for reconsideration,any other
person may cross-petition for reconsideration.See Idaho Code §6 1-626.
ORDER NO.32763 3
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this //
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,,Jean D.Jewell/I
Commission Scretary
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PAUL KJELcLANER,PRESIDENT
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MACK A,REDF D,COMMISSIONER
MARSHA H.SMITH,COMMISSIONER
day’of March 2013.
ORDER NO.32763 4