HomeMy WebLinkAbout20140905Decision Memo.pdfDECISION MEMORANDUM 1
DECISION MEMORANDUM
TO: COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
COMMISSION STAFF
FROM: KRISTINE SASSER
DEPUTY ATTORNEY GENERAL
DATE: SEPTEMBER 4, 2014
SUBJECT: IDAHO POWER’S APPLICATION REGARDING ITS ENERGY SALES
AGREEMENT WITH BLACK CANYON BLISS, LLC, CASE NO. IPC-E-
14-23
On August 27, 2014, Idaho Power Company filed an Application requesting that the
Commission accept or reject an Agreement between Idaho Power and Black Canyon Bliss, LLC
(Black Canyon) for the sale and purchase of electric energy generated by the Black Canyon Bliss
Hydro Project. Idaho Power requests that its Application be processed by Modified Procedure.
THE APPLICATION
On August 19, 2014, Idaho Power and Black Canyon entered into an Agreement
pursuant to the terms and conditions of various Commission Orders applicable to PURPA
agreements for non-seasonal hydro projects. Idaho Power states that Black Canyon proposes to
operate and maintain a 24.82 kilowatt (kW) non-seasonal hydro energy facility to be located near
Bliss, Idaho. The Company maintains that the project will be a qualified facility (QF) under the
applicable provisions of the Public Utility Regulatory Policies Act (PURPA).
Under the terms of the Agreement, Black Canyon elected to contract with Idaho
Power for a 20-year term using the non-levelized other published avoided cost rates as currently
established by the Commission in Order No. 33084 for energy deliveries of less than 10 average
MW (aMW). As defined in paragraphs 1.21 and 4.1.4 of the Agreement, Black Canyon will be
required to provide data on the facility that Idaho Power will use to confirm that under normal
and/or average conditions, the facility will not exceed 10 aMW on a monthly basis. As described
in paragraph 7.5 of the Agreement, should the facility exceed 10 aMW on a monthly basis, Idaho
DECISION MEMORANDUM 2
Power will accept the inadvertent energy that does not exceed the maximum capacity amount,
but will not purchase or pay for inadvertent energy.
Black Canyon has selected November 15, 2014, as the project’s Scheduled Operation
Date. Various requirements have been placed upon Black Canyon in order for Idaho Power to
accept energy deliveries from this facility. Idaho Power will monitor compliance with these
requirements. Idaho Power will continue to monitor the ongoing requirements throughout the
term of the Agreement.
The Agreement provides that all applicable interconnection charges and monthly
operational or maintenance charges under Schedule 72 will be assessed to Black Canyon. A
Schedule 72 Generator Interconnection Agreement (GIA) between Black Canyon and Idaho
Power was executed on April 22, 2013. Idaho Power states that PURPA QF generation must be
designated as a network resource (DNR) to serve Idaho Power’s retail load on its system. In
order for the facility to maintain its DNR status and maintain compliance with Idaho Power’s
non-discriminatory administration of its Open Access Transmission Tariff (OATT) and FERC
requirements there must be a power purchase agreement (PPA) associated with its transmission
service request.
Article 21 of the Agreement provides that the PPA will not become effective until the
Commission has approved all terms and conditions and declared that all payments Idaho Power
makes to Black Canyon for purchases of energy will be allowed as prudently incurred expenses
for ratemaking purposes.
STAFF RECOMMENDATION
Staff has reviewed Idaho Power’s Application and recommends that the case proceed
through the use of Modified Procedure with a 21-day comment deadline.
COMMISSION DECISION
Does the Commission wish to issue a Notice of Application and Notice of Modified
Procedure setting a 21-day comment deadline?
M:IPC-E-14-23_ks