20150730Application.pdf

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ir''li -ii.li. ltl Fii L: llDONOVAN E. WALKER
Lead Gounsel
July 29, 2015
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-15-22
AgPower DCD, LLC's Third Amendment to Firm Energy Sales Agreement
ldaho Power Company's Application
Dear Ms. Jewell:
Enclosed for filing in the above mafter please find an original and seven (7)
copies of ldaho Power Company's Application for Approval of Firm Energy Sales
Agreement Amendment.
An IDACORP Company
DEW:csb
Enclosures
1221 W. ldaho 5t. (83702)
P.O. Box 70
Boise, lD 83707
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West ldaho Street (83702\
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorney for ldaho Power Company
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF THE THIRD AMENDMENT
TO THE FIRM ENERGY SALES
AGREEMENT BETWEEN IDAHO POWER
COMPANY AND AGPOWER DCD, LLC.
tt !-,
CASE NO. IPC-E-15-22
APPLICATION FOR APPROVAL
OF FIRM ENERGY SALES
AGREEMENT AMENDMENT
rl
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
ldaho Power Company ("!daho Powe/'), in accordance with RP 52 and the
applicable provisions of the Public Utility Regutatory Policies Act of 1978 ('PURPA'),
hereby respectfully applies to the ldaho Public Utilities Commission ("Commission") for
an order approving the Third Amendment ("Amendment") to the Firm Energy Sales
Agreement ("FESA") between ldaho Power and AgPower DCD, LLC, a PURPA
qualifying facility ("QF'). The Amendment is submitted herewith as Attachment 1. This
Amendment changes the Net Energy Amount notification process, similar to the process
that has been approved by the Commission in six recently approved Energy Sales
Agreements and Energy Sales Agreement amendments with other PURPA QFs.
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 1
!n support of this Application, ldaho Power represents as follows:
I. INTRODUCTION AND BACKGROUND
1. ldaho Power and Cargill lncorporated (the original seller) entered into a
FESA on January 22, 2010, for the purchase and sale of energy produced by the
Bettencourt Dry Creek Biofactory ("Facility") located near Hansen, ldaho. This FESA
was approved by the Commission in Order No. 31034 on April 1,2010.
2. On June 24, 2014, a First Amendment was entered into by the parties in
which ownership of the Facility and all rights, interests, and obligations under the FESA
were transferred to AgPower DCD, LLC ("Selle/').
3. On August 19, 2014, the parties entered into a Second Amendment to
change the definition of Mid-Columbia Market Energy Cost in this FESA, consistent with
the stipulation approved by the Commission in Order No. 33053 on June 10, 2014. The
Second Amendment was approved by the Commission in Order No. 33184 on
November 21,2014.
4. Paragraph 6.2 of the FESA allows the Seller to adjust the "lnitial Year
Monthly Net Energy Amounts" on a quarterly basis, consistent with a Commission
directive that seller revisions are to be submitted no sooner than "the end of month
three and every three months thereafter." Order No. 29632, p.23.
5. On April 8,2015, Idaho Power received a letter from the Seller claiming a
force majeure event had occuned at the Facility, which resulted in reduced fuel supply
at the Facility and, consequently, the electricity output would be below the Selle/s
adjusted monthly Net Energy Amounts. Seller sought relief from the 90/110
performance requirement due to the claimed force majeure event beginning in March
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 2
2015 and lasting until the fuel supply problem was resolved. ldaho Power did not
accept Selle/s claim as a valid force majeure event under the FESA and therefore did
not change the monthly Net Energy Amounts previously submitted by the Seller.
6. Rather than dispute the claim of force majeure, the parties agreed to allow
the Seller to adjust the monthly Net Energy Amounts for June through September 2015
and entered into this Amendment on July 13, 2015, as a resolution of any disputes
relating to the claim of force majeure.
II. THE AMENDMENT
7. ln six recently approved Energy Sales Agreements between ldaho Power
and other QFs, the Commission has allowed a change in the Net Energy Amount
notification process from a quarterly basis to monthly basis. See Order Nos. 33102,
33103,33104,33156,33191, and 33240. ln addition, the Commission has approved
amendments similar to this Amendment as recently as April 28,2015. See Order No.
33289. ln Order No.33102, the Commission stated:
we find that monthly, as opposed to quarterly, reporting of
energy generation estimates is a reasonably negotiated term
between the parties and not inconsistent with the
Commission's guidance and findings in Order No. 29632.
As we stated in that Order, 'it is reasonable and operationally
expedient to require QFs to provide ldaho Power with
monthly kWh production estimates The Commission
finds it reasonable to provide more frequent opportunities to
revise generation estimates than [the two years] proposed
by the Company. We find that the interest of the Company
in planning for QF resources is better served if the
generation forecast is a reliable estimate.' Order No. 29632
at23.
The Commission also stated, "We find that a provision allowing for monthly generation
estimate updates is consistent with that purpose." See Order No. 33102, p. 6.
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 3
8. This Amendment changes paragraph 6.2 to allow the Seller to adjust the
"lnitial Year Monthly Net Energy Amounts" on a monthly, rather than quarterly, basis.
As this is an existing p.j",rt that has been operating and delivering energy under an
Operation Date of May 3, 2010, the Initial Monthly Net Energy Amounts have been
revised by the Seller in accordance with the FESA. However, under this Amendment,
the Seller can submit future revisions on a monthly basis, with a minimum of 30 days
notice prior to the beginning of the next month, rather than once every three months. A
table was added to the Amendment indicating both "Notification Month" and "Future
monthly Net Energy Amounts eligible to be revised," primarily to provide clarity to the
confusing nature of the Estimated Net Energy Amounts and the Selle/s desire to
update the same. Both ldaho Power and the Seller propose Commission adoption of
this change. The Seller gains more clarity and flexibility in adjusting its estimated
energy deliveries and Idaho Power maintains the stability in the estimates necessary for
its planning and operation.
II!. PROCEDURE
9. As Commission Staff ("Staff') recommended and the Commission
approved in Case No. IPC-E-15-11, due to the limited scope of the Amendment, ldaho
Power requests that the Commission approve the proposed Amendment upon Staffs
review and without further process.
10. Altematively, should the Commission determine that further process is
required, ldaho Power believes that a hearing is not necessary to consider the issues
presented herein and respectfully requests that this Application be processed under
Modified Procedure; i.e., by written submissions rather than by hearing. RP 201, ef seg.
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 4
IV. GOMMUNICATIONS AND SERVICE OF PLEADINGS
11. Communications and service of pleadings, exhibits, orderc, and other
documents relating to this proceeding should be sent to the following:
Donovan E. Walker
Lead Counsel
Regulatory Dockets
ldaho Power Company
1221West ldaho Street
P.O. Box 70
Boise, ldaho 83707
dwal ker@ ida hopower. co m
[e-mail]
Randy C. Allphin
Energy Contracts Coord inator
ldaho Power Company
1221West ldaho Street
P.O. Box 70
Boise, ldaho 83707
[e-mail]
V. REQUEST FOR RELIEF
12. ldaho Power respectfully requests that the Commission issue an order
approving the Third Amendment to the Firm Energy Sales Agreement submitted
herewith without change or condition
Respectfully submitted this 29h day of July 2015.
D-*-Qtl<
DONOVAN E. WALKER
Attomey for ldaho Power Company
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 5
CERTIFICATE OF SERVICE
! HEREBY CERTIFY that on the 29h day of July 2015 I served a true and conect
copy of the within and foregoing APPLICATION FOR APPROVAL OF FIRM ENERGY
SALES AGREEMENT AMENDMENT upon the following named parties by the method
indicated below, and addressed to the following:
AgPower DCD, LLC
Jim R. Wiest
c/o Camco Clean Energy
9360 Station Street, Suite 375
Lone Tree, Colorado 80124
Hand DeliveredX U.S. Mail
_Ovemight Mail
_FAXX Email [e-mail]
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 6
BEFORE THE
IDAHO PUBLIG UTILITIES COMMISSION
GASE NO. IPG.E.15.22
IDAHO POWER COMPANY
ATTACHMENT 1
THIRD AMENDMENT
TO THE
FIRM ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
AGPOWER DCD, LLC
This Third Amendment of the Firm Energy Sales Agreement ("Third Amendment") is
entered into on this fiSay of .T*// ,2015 by;d between Idaho Power Company, an Idaho
corporation ("ldaho Power"), and AgPower DCD, LLC, a Delaware limited liability company
("DCD" or "Seller") (individually a "Party" and collectively the "Parties").
WITNESSETH:
WHEREAS, Idaho Power and original Seller entered into a Firm Energy Sales
Agreement on January 22, 2010, ("Agreement") for the purchase and sale of energy produced by
the Seller's facility ("Project") that was approved by the Idaho Public Utilities Commission
("Idaho PUC") in Order No. 31034 on April I ,2010;
WHEREAS, on June 24, 2014, in the First Amendment to the original Agreement,
ownership of the Project and all rights, interests and obligations under the original Agreement,
was transferred to AgPower DCD, LLC;
WHEREAS, on August 19, 2074, the Parties entered into a Second Amendment to
change the definition of Mid-Columbia Market Energy Cost in this Agreement consistent with
the Stipulation approved by the Idaho PUC in Order No. 33053 on June 10,2014. The Second
Amendment was approved by the Idaho PUC in Order No. 33 184 on November 21,2014.
WHEREAS, on April 7, 2015, the Seller made a claim of Force Majeure relating to
Seller's Ongoing Monthly Net Energy Amounts, which is not accepted by Idaho Power;
WHEREAS, notwithstanding the Parties' respective positions regarding the disputed
claim of Force Majeure, the Parties desire to amend the Agreement to replace Article 6, sections
6.2.2 and 6.2.3, to revise Ongoing Monthly Net Energy Amounts for June, July, August, and
September 2015, and to abide by the terms of this Third Amendment as a resolution of any
disputes relating to the claim of Force Majeure.
NOW THEREFORE, in consideration of the mutual promises and covenants and other
consideration set forth herein, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree to the following amendments to the Agreement:
L Incorporation of Recitals. The above-stated recitals are incorporated in this Third
Amendment and made a part of this Third Amendment by this reference to the same
extent as if these recitals were set forth in full at this point.
Page I of3
2.Article VI: Purchase and Sale of Net Energy. Article 6, sections 6.2.2 and 6.2.3 shall
be deleted in their entirety and the following sections shall be substituted in their stead:
6.2.2 Seller's Adjustment of lnitial Year Monthly Net Energy Amounts - Prior to the
Operation Date, the Seller may revise all of the previous initial year monthly Net
Energy Amounts by providing written notice to Idaho Power in accordance with
paragraph25.l.
6.2.3 Seller's Adjustment of Monthly Net Energy Amounts After the Operation Date -
After the Operation Date, the Seller may revise any future monthly Net Energy
Amounts by providing written notice no later than 5 PM Mountain Standard time
on the last business day of the Notification Month specified in the following
schedule:
Notification
Month
Future monthly Net Energy
Amounts eligible to be revised
November
December
January
February
March
April
May
June
July
August
September
October
January and any future months
February and any future months
March and any future months
April and any future months
May and any future months
June and any future months
July and any future months
August and any future months
Septernber and any future months
October and any future months
November and any future months
December and any fufure months
a.) This written notice must be provided to Idaho Power in accordance with
paragraph 25.1 or by electronic notice provided and verified via return
electronic verification of receipt to the electronic notices address specified
in paragraph25.l.
b.) Failure to provide timely written notice of changed Net Energy Amounts
will be deerned to be an election of no change from the most recently
provided Net Energy Amounts.
Commission Approval. The obligations of the Parties under this Third Amendment are
subject to the Idaho PUC's approval of this Third Amendment and such approval being
upheld on appeal, if any, by a court of competent jurisdiction. The Parties will submit
this Third Amendment to the Idaho PUC and recommend approval in its entirety pursuant
toP.P 274.
4. Effect of Amendment. Except as expressly amended by this Third Amendment, the
Agreement shall remain in full force and effect.
3.
Project: 31615100 Dry Creek Dairy
Firm Energy Sales Agreement
Third Amendment Page 2 of3
5.
6.
Capitalized Terms. All capitalized terms used in this Third Amendment and not defined
herein shall have the same meaning as used in the Agreement.
Scope of Amendment. This Third Amendment shall be binding upon and inure to the
benefit of the Parties hereto, and their respective heirs, executors, administrators,
successors, and assigns, who are obligated to take any action which may be necessary or
proper to carry out the purpose and intent thereof.
Authority. Each Party represents and warrants that (i) it validly exists and in good
standing in the state in which it is organized, (ii) it is the proper party to amend the
Agreernent, and (iii) it has the requisite authority to execute this Third Amendment.
Counterparts. This Third Amendment may be executed in any number of counterparts,
each of which shall be deemed an original and all of which taken together shall constitute
a single instrument.
IN WITNESS WHEREOF, the Parties hereto have caused this Third Amendment to be
executed in their respective rurmes on the dates set forth below:
IDAHO POWER
By:
Name:
7.
8.
Name:
ritte: /,fui/
oarc: Jttr ?d Ztf
ritr"' tS/F B,ott S+Ftl, f-Date: 1'13'15
Project: 31615100 Dry Creek Dairy
Firm Energy Sales Agreement
Third Amendment
AGPOWER DCD LLC COMPAI.IY
Page 3 of3