20170324Application.pdf

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An IDAC0RP Company
DONOVAN E. WALKER
Lead Counsel
[e-mail]
March 24,2017
VIA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-17-05
The Amalgamated Sugar Company, LLC - Twin Falls Facility
ldaho Power Company's Application for Approval of First Amendment
Dear Ms. Hanian:
Enclosed for filing in the above matter please find an origina! and seven (7)
copies of ldaho Power Company's Application for Approval of First Amendment to
Agreement for Sale and Purchase of Surplus Energy.
Very yours,
ovan E. Walker
DEW:csb
Enclosures
1221 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West Idaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalker@id ooower.com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
,lIf I tYID
,,il ',;h Pil 3:53
CASE NO. IPC-E-17-05
APPLICATION FOR APPROVAL
OF FIRST AMENDMENT TO
AGREEMENT FOR SALE AND
PURCHASE OF SURPLUS
ENERGY
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF THE FIRST AMENDMENT
TO THE AGREEMENT FOR SALE AND
PURCHASE OF SURPLUS ENERGY
BETWEEN IDAHO POWER COMPANY
AND THE AMALGAMATED SUGAR
COMPANY, LLC, FOR THE TWIN FALLS
PLANT.
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ldaho Power Company ("ldaho Power"), in accordance with RP 52, hereby
respectfully applies to the ldaho Public Utilities Commission ("Commission") for an order
approving the First Amendment to the Agreement for Sale and Purchase of Surplus
Energy between Idaho Power Company and the Amalgamated Sugar Company, LLC,
Twin Falls Facility ("Amendment"). The Amendment, attached hereto as Attachment 1,
is virtually identical and covers the same issue as those submitted and approved as part
of the settlement stipulation in Case No. IPC-E-13-25 ("Stipulation"), and the several
subsequent amendments approved in Case Nos. ,PC-E-14-21, IPC-E-14-37,
APPLICATION - 1
IPC-E-14-40, and IPC-E-15-10. The Amendment changes the reference to the
discontinued non-firm Dow Jones Mid-Columbia lndex and replaces it with reference to
the lntercontinental Exchange ('lCE') Mid-Columbia lndex and a revised formula for
calculating the non-firm price identical to that contained in ldaho Power's Tariff
Schedule 86.
ln support of this Application, ldaho Power represents as follows:
I. INTRODUCTION AND BACKGROUND
1. The Amalgamated Sugar Company, LLC ("TASCO" or "Seller") owns and
operates electric generation facilities at its refined sugar production facility in Twin Falls,
ldaho. ldaho Power provides electric service to TASCO's Twin Falls plant under ldaho
Power Schedule 19, and TASCO receives electric service to supplement the energy
generated by TASCO's on-site generation. On November 20, 2006, the parties entered
into an Agreement for Sale and Purchase of Surplus Energy ("Agreement"), whereby
ldaho Power would purchase surplus energy generated at TASCO's Twin Falls facility
that is not consumed within the facility. The purchase price for Surplus Energy in the
Agreement is 85 percent of the monthly weighted average non-firm Dow Jones Mid-
Columbia lndex price. The Agreement allows for annual automatic renewals; however,
. the Agreement may be terminated by either party upon 60 day's notice. The
Commission approved the Agreement in Order No. 30220 on January 19,2007.
2. The Dow Jones Mid-Columbia lndex was discontinued by the publisher as
of October 2013. Case No. IPC-E-13-25 was initiated to address a replacement market
index reference for the non-firm energy price reflected in Schedule 86. The parties to
Case No. IPC-E-13-25 executed a Stipulation, approved by the Commission in Order
APPLICATION .2
No. 33053, which sets forth reference to the ICE Mid-Columbia lndex prices, with a
revised formula for calculating the non-firm price in Schedule 86. ln addition, the parties
to Case No. IPC-E-13-25 agreed to amend the Firm Energy Sales Agreements between
ldaho Power and each intervening party to reference the ICE index, using the same
language as, and consistent with, the Schedule 86 language agreed upon in the
Stipulation. ln approving the Stipulation, the Commission stated:
We also find it reasonable to allow any additional existing
PURPA QFs that currently have a contract with ldaho Power
containing reference to the Dow Jones non-firm Mid-C
electricity price index, should they so choose, to amend their
respective agreements consistent with the terms of this
Settlement Stipulation and similar to the contract
amendments approved by this Order.
Order No. 33053, p. 4. Subsequently, approximately 20 Energy Sales Agreements
have been amended to change the market energy cost index from Dow Jones to the
ICE index, in accordance with Order No. 33053. These amendments have been
approved by the Commission in various cases, including Case Nos. IPC-E-14-21,
IPC-E-14-37, IPC-E-1440, and IPC-E-1 5-1 0.
3. On October 28,2014,ldaho Power mailed a letter and an executable copy
of the Amendment to Seller and made reminder phone calls to the Seller regarding the
Amendment, but the Amendment was not returned. Since the time the Dow Jones non-
firm index ceased being published, the TASCO Twin Falls facility has generated
negligible Surplus Energy and has not been paid for any Surplus Energy delivered as
the applicable price index no longer exists. On January 26,2017, the Seller returned an
executed copy of the Amendment to ldaho Power; ldaho Power signed the Amendment
on February 16, 2017.
APPLICATION - 3
II. THE AMENDMENT
4. ldaho Power and TASCO have agreed to amend the Agreement to
include, nearly word for word, the reference to the ICE index and revised formula that
was adopted for Schedule 86 in Case No. IPC-E-13-25. The Amendment simply sets
forth, virtually verbatim, the provisions from Schedule 86 to define the "Purchase Price"
in the Agreement. Pursuant to the parties' agreement, this Amendment provides for a
switch to and use of the agreed ICE index to establish Purchase Price for Surplus
Energy in the Agreement. The Amendment is subject to the Commission's approval,
and the obligations of the parties wil! become effective upon approval.
III. MODIFIED PROCEDURE
5. ldaho Power requests that the Commission approve the proposed
Amendment upon Commission Staffs ("Staff') review and without further process. Staff
previously recommended :
Based on the Commission's determination of
reasonableness in IPC-E-13-25 to the definition of 'Market
Energy Cost' and change in index, and because the
Commission already deemed it reasonable for 'any
additional existing PURPA QFs' to amend their respective
agreements with similar terms, Staff further recommends
that the Commission approve the First Amendment without
further process.
Staff Decision Memorandum, p. 3, Case No. IPC-E-14-21.
6. Alternatively, 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, et seq.
APPLICATION - 4
IV. COMMUNICATIONS AND SERVIGE OF PLEADINGS
7. 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
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
dwalker@ idahopower. com
dockets@ idahopower. com
Cogeneration and Small Power Production
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
e nerqyco ntracts@ id a hopower. com
V. REQUEST FOR RELIEF
8. ldaho Power respectfully requests that the Commission issue an order
approving the First Amendment to the Agreement for Sale and Purchase of Surplus
Energy submitted herewith without change or condition.
Respectfully submitted this 24th day of March 2017.
DONOVAN E.
Attorney for ldaho Power Company
APPLICATION - 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 24th day of March 2017 I served a true and
correct copy of the within and foregoing APPLICATION upon the following named
parties by the method indicated below, and addressed to the following:
The Amalgamated Sugar Company
The Amalgamated Sugar Company
1951 South Saturn Way, Suite 100
Boise, ldaho 83709
_Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
APPLICATION - 6
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-17-05
IDAHO POWER COMPANY
ATTAGHMENT 1
This First Amendment of the Agreement tbr Sale and Purchase of Surplus Energ,v- ("First
Amendment") is entered into on this /6!Aur- of &.a.q .20lZby and between ldaho Power
Company, an ldaho corporation ("[dah-o Powe.'1, *a T6nmalgamated Sugar Company, LLC.
a Delaware limited liability compan)'("'TASCO-Twin Falls" or "Seller") (individuall,,- a "Part,v"
and collectively the "Parties").
FIRST AMENDMENT
TO THE
AGREEMENT FOR SALE AND PURCHASE OF SURPLUS ENERGY
BETWEEN
IDAHO POWER COMPANY
AND
THE AMALGAMATED SUGAR COMPANY, LLC
TWIN FALLS FACILITY
WHEREAS, Idaho Power and Seller entered into an Agreement tbr Sale and Purchase of
Surplus Energy' on November 20. 2006 (the "Agreement") for the purchase and sale of energy
produced by the Seller's facility that was approved by the ldaho Public Utilities Commission
("ldaho PUC") in Order No. 30220 on January 19.2007
WHEREAS. On September 13, 2013, the Publisher of the Dow Jones and Platts indices
provided notice to ldaho Power that it was discontinuing publication of the Dow Jones non-firm
index and transitioning to the Platts non-firm index and since such transition. the Platts index has
reported zero volumes:
WHEREAS. Idaho Power and other parties to Docket No. IPC-E-13-25 entered into a
Settlement Stipulation on May 9, 2014 ("Stipulation") that changed the definition of Mid-
Columbia Market Energy Cost in Schedule 86 to replace the Dow Jones non-t'irm index with the
lntercontinental Exchange firm index tbr purposes of calculating market energ)i cost. and this
Stipulation was approved by the ldaho PUC in Order No. 33053 on June I 0. 20 I 4:
WHEREAS. the ldaho PUC's order approving the Stipulation also approved amendments
replacing the Dow Jones non-f-irm index rvith the Intercontinental Exchange firm index in
contracts of parties to Docket No. IPC-E-13-25, and fbund it to be reasonable to allow existing
PURPA qualif"v"ing facilities that currently'have a contract w'ith ldaho Power containing ref'erence
to the Dow Jones non-finn index to amend their contracts consistent with the terms of the
Stipulation: and
WHEREAS, Seller and [daho Power desire to amend the Purchase Price in this
Agreement consistent with the Stipulation;
NOW, THEREFORE, in consideration of the foregoing. and fbr other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be
tegally bound. the Parties hereto agree as follows:
l. Incorporation of Recitals. The above-stated recitals are incorporated into and made a part
of this Agreernent by this ref'erence to the same extent as if these recitals were set forth in tull at
this point.
Agreement firr Sale and Purchase of Surplus lincrgy
Projcct: I l6l60ti2 I'ASCO - ['win I'alls
First Amendment - Page I ot'-j
2. Purchase of Surplus Generation. Subsection 4.3 shall be deleted in its entirety and the
following section shall be substituted in its stead:
4.3 Purchase Price. The purchase price for Surplus Energy will be as follows
Eighty-five percent (85%) of (82.4% of the monthly arithmetic average of each
day's lntercontinental Exchange ("ICE") daily firm Mid-C Peak Avg and Mid-C
Off-Peak Avg index prices). Each day's index prices will reflect the relative
proportions of peak hours and off-peak hours in the month as follows:
Heavy Load (HL) Hours: The daily hours from hour ending 0700-2200
Mountain Time, (16 hours) excluding all hours on all Sundays, New Years
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.
Light Load (LL) Hours: The daily hours from hour ending 2300-0600
Mountain Time (8 hours), plus all other hours on all Sundays, New Years
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.
The actual Mid-Columbia Market Energy Cost calculation being:
n
.85 * [.824 * (I {GCE Mid-C Peak Avg* * HL hours for day) +
X=l
(ICE Mid-C Off-Peak Avg* + LL hours for day)) I (n*29)l
where n : number of days in the month
If the ICE Mid-C Index prices are not reported for a particular day or days,
prices derived from the respective averages of HL and LL prices for the
immediately preceding and following reporting periods or days shall be
substituted into the formula stated in this definition and shall therefore be
multiplied by the appropriate respective numbers of HL and LL Hours for
such particular day or days with the result that each hour in such month
shall have a related price in such formula. If the day for which prices are
not reported has in it only LL Hours (for example a Sunday), the respective
averages shall use only prices reported for LL hours in the immediately
preceding and following reporting periods or days. If the day for which
prices are not reported is a Saturday or Monday or is adjacent on the
calendar to a holiday, the prices used for HL Hours shall be those for HL
hours in the nearest (forward or backward) reporting periods or days for
which HL prices are reported.
If the ICE Mid-C Index reporting is discontinued by the reporting agency,
both Parties will mutually agree upon a replacement index, which is
similar to the ICE Mid-C lndex. The selected replacement index will be
Agreement for Sale and Purchase of Surplus Energy
Project: 31616082 TASCO - Twin Falls
First Amendment - Page 2 of 3
consistent with other similar agreements and a commonly used index by
the electrical industry.
3. Commission Approval. The obligations of the Parties under this First Amendment are
subject to the ldaho PUC's approval of this First Amendment and such approval being upheld on
appeal, if any, by a court of competent jurisdiction. The Parties will submit this First
Amendment to the Idaho PUC and recommend approval in its entirety pursuant toRP 274.
4. Effect of Amendment. Except as expressly amended by this First Amendment, the
Agreement shallremain in full force and effect.
5. Capitalized Terms. All capitalized terms used in this First Amendment and not defined
herein shall have the same meaning as used in the Agreement.
6. Scope of Amendment. This First 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 is validly existing 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 First Amendment.
8. Counterparts. This First 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 First Amendment to be
duly executed as of the date above written.
THE AMALGAMATED SUGAR IDAHO POWER COMPANY
COMPANY,LLC
By:
Name: ( asSt'ct QrrrcN
Title:
Agreement for Sale and Purchase ofSurplus Energy
Project: 31616082 TASCO - Twin Falls
First Amendment - Page 3 of 3
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