20161101Application.pdf

RECEI VED
, • i, , .~U 3LIC DONOVAN E. WALKER
Lead Counsel
[e-mail] . ' ;· -.:: · ~C,1MMISSION
November 1, 2016
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. IPC-E-16-26
USG Oregon, LLC -Neal Hot Springs Geothermal Project
An IDACORP Company
Idaho Power Company's Application for Approval of Second Amendment
to Power Purchase Agreement
Dear Ms. Jewell:
Enclosed for filing in the above matter please find an original and seven (7)
copies of Idaho Power Company's Application for Approval of Second Amendment to
Power Purchase Agreement.
DEW:csb
Enclosures
ours,
Donovan E. Walker
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
I . I \
\~bNOVAN E. WALKER (ISB No. 5921)
iaaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
)
) CASE NO. IPC-E-16-26
)
R.:CEIVED
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF THE SECOND
AMENDMENT TO THE POWER
PURCHASE AGREEMENT BETWEEN
IDAHO POWER COMPANY AND USG
OREGON, LLC.
) APPLICATION FOR APPROVAL
) OF SECOND AMENDMENT TO
) POWER PURCHASE AGREEMENT
)
----------------)
Idaho Power Company ("Idaho Power"), in accordance with RP 52 and the
applicable provisions of the Public Utility Regulatory Policies Act of 1978 ("PURPA"),
hereby respectfully applies to the Idaho Public Utilities Commission ("Commission") for
an order approving the Second Amendment to the Power Purchase Agreement
between Idaho Power Company and USG Oregon, LLC ("Amendment") for the Neal Hot
Springs geothermal project ("Project"). This Amendment makes a change to Appendix
B-1, Description of Facility, of the Power Purchase Agreement ("PPA") to allow for the
use of air and/or water cooled power plant units. This change has no material effect on
APPLICATION FOR APPROVAL OF SECOND
AMENDMENT TO POWER PURCHASE AGREEMENT -1
the PPA terms and conditions, nor does it change any performance requirements of the
PPA.
In support of this Application, Idaho Power represents as follows:
I. INTRODUCTION AND BACKGROUND
1. Idaho Power and USG Oregon, LLC ("Seller") entered into a PPA on
December 11 , 2009, for the purchase and sale of energy produced by the Neal Hot
Springs geothermal project located near Vale, Oregon. This PPA was approved by the
Commission in Order No. 31087, Case No. IPC-E-09-34, on May 20, 2010.
2. In accordance with the first paragraph of Appendix 8-1 of the PPA, the
Seller was required to provide Idaho Power with an updated Description of Facility to
"include specific generation and geothermal plant information." The Seller provided the
revised Appendix 8-1, Description of Facility, to Idaho Power on July 5, 2012. This
Amendment makes a change to the revised Appendix 8-1 , Description of Facility,
provided by the Seller.
3. On February 20, 2015, the parties to the PPA executed a First
Amendment to change the definition of Mid-Columbia Market Energy Cost in the PPA
consistent with the stipulation approved by the Commission Order No. 33053 on June
10, 2014. The First Amendment was approved by the Commission in Order No. 33274
on April 15, 2015.
4. In December 2015, Seller notified Idaho Power that since operations of
the Project commenced it experiences high equipment vibration and less-than-planned
generation during the summer season when high ambient temperature adversely affects
the Project. To remedy the issue, the Seller has been investigating the addition of a
APPLICATION FOR APPROVAL OF SECOND
AMENDMENT TO POWER PURCHASE AGREEMENT - 2
water cooling system to the Project, which currently only utilizes air cooling. According
to the Project, this modification would not increase the average annual net energy
output above the 25,000 kilowatt limit provided for in Article 3.1.1 (c) of the PPA, nor
would it impact the instantaneous or the Maximum Capacity limits as described in
Article 8.3 of the PPA.
5. On September 29, 2016, the parties agreed to amend the PPA to change
Appendix B, Section B-1, Description of Facility, Item 1 of the PPA to include the words
"and/or water cooled," along with some minor typographical corrections to subsequent
items in Appendix B-1 (see Attachment 1). A redlined version of Appendix B, Section B-
1, is attached to this Application as Attachment 2.
II. THE AMENDMENT
6. The Amendment changes Appendix B, Section B-1, Description of Facility,
Item 1 of the PPA to include the words "and/or water cooled," along with some minor
typographical corrections to subsequent items in Appendix B-1 . Section B-2 of
Appendix B remains unchanged. None of the changes/corrections contained in the
Amendment change the terms and conditions or obligations of the parties under the
PPA. These changes are only to allow for the Project to utilize water cooling and to
correct minor typographical errors in Appendix B, Section B-1.
Ill. PROCEDURE
7. Given the limited scope of the Amendment, Idaho Power requests that the
Amendment be approved without further process.
8. Alternatively, should the Commission determine that further process is
required, Idaho Power believes that a hearing is not necessary to consider the issues
APPLICATION FOR APPROVAL OF SECOND
AMENDMENTTOPOWERPURCHASEAGREEMENT-3
presented herein and respectfully requests that this Application be processed under
Modified Procedure; i.e., by written submissions rather than by hearing. RP 201, et seq.
IV. COMMUNICATIONS AND SERVICE OF PLEADINGS
9. Communications and service of pleadings, exhibits, orders, and other
documents relating to this proceeding should be sent to the following:
Donovan E. Walker
Lead Counsel
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
[e-mail]
[e-mail]
Randy C. Allphin
Energy Contracts Leader
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
[e-mail]
V. REQUEST FOR RELIEF
10. Idaho Power respectfully requests that the Commission issue an order
accepting the Second Amendment to the Power Purchase Agreement between Idaho
Power Company and USG Oregon, LLC, submitted herewith without change or
condition .
Respectfully submitted this 1st day of November 2016.
Attorney for Idaho Power Company
APPLICATION FOR APPROVAL OF SECOND
AMENDMENT TO POWER PURCHASE AGREEMENT -4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 1st day of November 2016 I served a true and
correct copy of the within and foregoing APPLICATION FOR APPROVAL OF SECOND
AMENDMENT TO POWER PURCHASE AGREEMENT upon the following named
parties by the method indicated below, and addressed to the following:
USG Oregon, LLC
USG Oregon, LLC
390 East Parkcenter Boulevard, Suite 250
Boise, Idaho 83706
Hand Delivered
_x_ U.S. Mail
__ Overnight Mail
FAX
_x_ Email [e-mail]
khawkley@usgeothermal .com
APPLICATION FOR APPROVAL OF SECOND
AMENDMENT TO POWER PURCHASE AGREEMENT - 5
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-16-26
IDAHO POWER COMPANY
ATTACHMENT 1
SECOND AMENDMENT
TOTHE
POWER PURCHASE AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
USG OREGON, LLC
This Second Amendment of the Power Purchase Agreement (''Second Amendment") is
entered into on this 2,1/"iday of~, 2016, by and between Idaho Power Company, an Idaho
corporation (''Idaho Power"), and USG Oregon, LLC, a Delaware limited liability company ("USG
Oregon" or "Seller") (individually a "Party" and collectively the "Parties").
WITNESS ETH:
WHEREAS, Idaho Power and Seller entered into a Firm Energy Sales Agreement on
December 11, 2009, ("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. 31087 on May 20, 2010;
WHEREAS, on February 20, 2015, the Parties entered into a First Amendment to change
the definition of Mid-Columbia Market Energy Cost in the Agreement consistent with the
Stipulation approved by the Idaho PUC in Order No. 33053 on June 10, 2014. The First
Amendment was approved by the Idaho PUC in Order No. 33274 on April 15, 2015;
WHEREAS, the Project experiences high equipment vibration and less-than-planned
generation during the summer season when high ambient temperatures adversely affect the facility.
To remedy this issue, the Project is investigating the addition of a water cooling system to the
facility which currently only utilizes air cooling;
WHEREAS, the Parties agree to amend the Agreement to modify Section B-1
(DESCRIPTION OF FACILITY) of Appendix B to the Agreement to expressly include water
cooling in the description of the Project and to otherwise more precisely describe the Project; and
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:
I. Incorporation of Recitals. The above-stated recitals are incorporated in this Second
Amendment and made a part of this Second Amendment by this reference to the same
extent as if these recitals were set forth in full at this point.
2. Amendment of Section 8-1 of Appendix B. Delete Section B-1 (DESCRIPTION OF
FACILITY) of Appendix B to the Agreement in its entirety and replace with the text on
Exhibit A, attached hereto. Section B-2 of Appendix B is unchanged.
Project: 10000003 Neal Hot Springs Unit #1
Power Purchase Agreement
Second Amendment -Page 1 of 2
3. Commission Approval. The obligations of the Parties under this Second Amendment are
subject to the Idaho PU C's approval of this Second Amendment and such approval being
upheld on appeal, if any, by a comi of competent jurisdiction. The Parties will submit this
Second Amendment to the Idaho PUC and recommend approval in its entirety pursuant to
RP 274.
4. Effect of Amendment. Except as expressly amended by this Second Amendment, the
Agreement shall remain in full force and effect.
5. Capitalized Terms. All capitalized terms used in this Second Amendment and not defined
herein shall have the same meaning as used in the Agreement.
6. Scope of Amendment. This Second 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.
7. 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 Agreement, and
(iii) it has the requisite authority to execute this Second Amendment.
8. Counterparts. This Second 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 WfTNESS WHEREOF, the Parties hereto have caused this Second Amendment to be
executed in their respective names on the dates set forth below:
USG OREGON, LLC
Title: Treasurer
Date: September 23, 2016
Project: I 0000003 Neal Hot Springs Unit# I
Power Purchase Agreement
Second Amendment -Page 2 of2
IDAHO POWER COMPANY
B~d/)J~L
Name: 11: S S,( ()..,. Y aYk..
Title VP Pow.U SUf?PLy
Date: S?pt.QV1~ 89, Jo\lf,
8-1
EXHIBIT A
Section B-1 of Appendix B to the PPA for Neal Hot Springs
DESCRIPTION OF FACILITY
The Facility
The Facility is the Neal Hot Springs Geothermal Power Plant comprising:
I. Three independent air cooled and/or water cooled power plant Units using a
supercritical Organic Rankine Cycle with R-134a as the working fluid. The
generator ratings are:
Volts Hz Ambient Temp. kVA kW Power RPM
Rise Factor
12,470 60 40° C 80° C 12,222 11 ,000 0.90 1,800
All Station Use for the Facility is provided from generation equipment within the
Facility whenever Test Energy or Net Energy is being delivered to the Buyer.
2. The connecting electrical distribution system includes:
a. Three overhead 12.5kV circuits (one per Unit), which also feed the production
well pumps and other miscellaneous electrical equipment; and
b. The substation including the step-up transformer and the diesel generator.
3. The geothermal energy system of the Facility includes:
a. Four geothermal production wells with installed line-shaft pumps;
b. Interconnecting production and injection pipelines to deliver the hot
geothermal water from the production wells to the Units, and the cooled
geothermal waters from the Units to the injection wells; and
c. Nine geothermal injection wells.
4. Shared Facilities
a. The Units share the storage tanks for the refrigerant, refrigerant transfer
equipment, and instrument air compressors.
b. All of the Facility elements share the supervisory control system, including
communication equipment.
c. There is an office and shop complex.
Expected Annual Average Capacity from the Facility
The Expected Annual Average Capacity (as used in Paragraph 8.5.4) is 21,000
kW, excluding Forced and Scheduled Outages.
Project: I 0000003 Neal Hot Springs Unit# I
Power Purchase Agreement
Second Amendment Page 2 of3
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-16-26
IDAHO POWER COMPANY
ATTACHMENT 2
EXHIBIT A
Section B-1 of Appendix B to the PPA for Neal Hot Springs
B-1 DESCRIPTION OF FACILITY
The Facility
The Facility is the Neal Hot Springs Geothermal Power Plant comprising:
1. Three independent air cooled and/or water cooled power plant Units using a
supercritical Organic Rankine Cycle with R-134a as the working fluid. The
generator ratings are:
Volts Hz Ambient Temp. kVA kW Power RPM
Rise Factor
12,470 60 40° C 80° C 12,222 11,000 0.90 1,800
All Station Energy used by the Facility is provided from generation equipment
within the Facility whenever Test Energy or Net Energy is being delivered to the
Buyer.
2. The connecting electrical distribution system includes:
a. Three overhead 12.SkV circuits (one per Unit), which also feed the production
well pumps and other miscellaneous electrical equipment; and
b. The substation including the step-up transformer and the diesel generator.
3. The geothermal energy system of the Facility includes:
a. Four geothermal production wells with installed line-shaft pumps;
b. Interconnecting production and injection pipelines to deliver the hot
geothermal water from the production wells to the Units, and the cooled
geothermal waters from the Units to the injection wells; and
c. Nine geothermal injection wells.
4. Shared Facilities
a. The Units share the storage tanks for the refrigerant, refrigerant transfer
equipment, and instrument air compressors.
b. All of the Facility elements share the supervisory control system, including
communication equipment.
c. There is an office and shop complex.
Expected Annual Average Capacity from the Facility
The Expected Annual Average Capacity (as used in Paragraph 8.5.4) is 21,000
kW, excluding Forced and Scheduled Outages.