20121127Letter.pdf

I i-,. - - Fi
IHO PR®
An IDACORP Company
DONOVAN E. WALKER
Lead Counsel
dwatkercidahopower.com
November 1, 2012
2012NOV-I PM 2:1+2
IDAHO PU3Lp.
UTILITiES CO.MMISSIC; I
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Re: Birch Creek Trout Hydro Project #31214058
Dear Ms. Jewell:
Enclosed please find a copy of a letter from Idaho Power Company ("Idaho
Power") to Birch Creek Trout Hydro, a Public Utility Regulatory Policies Act of 1978
("PURPA") Qualifying Facility, regarding the administration of compliance with the
insurance provisions of Birch Creek Trout Hydro's contract.
The PURPA Power Sales Agreement ("Agreement") between Clifton E. Jensen
("Seller") and Idaho Power dated July 1, 1983, for the Birch Creek Hydro project,
approved by Idaho Public Utilities Commission ("Commission") Order No. 15746,
requires the Seller to continuously carry Valued Loss of Income ("VLI") Insurance in
amounts equal to the Accumulated Capacity Overpayments.
Because this Agreement contains levelized rates, the VLI insurance requirement
is intended to provide security to Idaho Power customers for initial overpayments, and
subsequent underpayments associated with the levelized rate in the event the project
permanently or partially curtails its output prior to the end of the full term of the
Agreement.
The Seller requested that Idaho Power consider accepting a Certificate of
Deposit ("CD") payable to Idaho Power in lieu of providing VLI insurance. Idaho Power
agreed to consider its request as long as the CD provided liquid security available to
Idaho Power that meets or exceeds the value of the VLI insurance.
The Seller has subsequently provided this CD in a form acceptable to Idaho
Power. Idaho Power also advised the Seller that an informational copy would be filed
with the Commission and both Idaho Power and the Seller would be required to abide
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
Jean D. Jewell, Secretary
November 1, 2012
Page 2
by any additional information requests, processes, or rulings the Commission may have
on this matter.
Thank you. Please contact me should you have any comments, questions, or
concerns.
Sincer
Donovan E. Walker
DEW:evp
Enclosures
cc: Kristine Sasser, Commission - w/encl. (via e-mail)
Rick Sterling, Commission - w/encl. (via e-mail)
Randy Allphin, Idaho Power - w/encl. (via e-mail)
IDAHO POWER.
An tOACORP Company
October 25, 2012
Birch Creek Trout
Attn: Cliff Jensen
P.O. Box 201
Hagerman, ID 83332
Re: Birch Creek Trout Hydro Project
Project Number: 31214058
VALUED LOSS OF INCOME SECURITY
Dear Mr. Jensen,
As we have discussed over the last few months, Paragraph 13.2 of the Power Sales Agreement
between Clifton B Jensen ("Seller") and Idaho Power Company, dated July 1, 1983 and amended
on December 22, 1992 ("Agreement") requires the Seller to continuously carry Valued Loss of
Income ("VU") Insurance in amounts equal to the Accumulated Capacity Overpayments that
would be owed Idaho Power pursuant to paragraph 20.2.
You have requested that Idaho Power consider accepting a Certificate of Deposit ("CD") in lieu
of a providing this VLI insurance. Idaho Power has agreed to consider this request provided that
the CD is acceptable to Idaho Power and provides liquid security available to Idaho Power that
meets or exceeds the value of the VLI insurance. In addition Idaho has advised that any
deviation from the specific requirement of the Seller providing VLI insurance will require
notification to be filed with the Idaho Public Utilities Commission (IPUC) and that both parties
would abide with any information requests, requirements, rulings and/or objections received
from the IPUC.
Idaho Power has received your receipt for a 5 year CD (that is payable to Idaho Power) that you
purchased in the amount of $11,400 in lieu of providing the VLI insurance. The actual
requirement in the Agreement specifies that the amount of the VLI insurance be recalculated
annually. Thus the actual required amount escalates slightly from this amount of $11,400 on
November 1, 2012, November 1, 2013 and then reduces to $0 on November 1, 2014.
Idaho Power has reviewed the provided CD and the Agreement requirements and has determined
that this liquid security provided by the project is acceptable in lieu of the project providing VLI
insurance.
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise, 1D 83702
As stated earlier in this letter, Idaho Power must file a copy of this letter with the IPUC and only
after the IPUC agrees with this arrangement (CD in lieu of VL! insurance) shall Idaho Power
determine that the project is in compliance with the requirement to provide VU insurance Idaho
Power will notify you of information, requests or comments received from the IPUC as we
receive them.
If you have questions, please do not hesitate to contact me.
CC: Email copy to Randy Allphin at ra1lphin)idahonower.com
Email copy to Donovan Walker at dwalkeridahot,ower.com