20121127minute_order.pdf

Office of the Secretary
Service Date
November 27,2012
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR AN )CASE NO.IPC-E-93-Ol
ORDER APPROVING AN AMENDMENT TO )
A POWER SALES AGREEMENT WITH )MINUTE ORDER
CLIFTON E.JENSEN )
On November 1,2012,Idaho Power Company submitted a copy of a letter it sent to
Birch Creek Trout Hydro,a PURPA qualifying facility (QF),regarding a deviation from the
expressed terms of the parties’power purchase agreement (PPA or Agreement)dated July 1,
1983.The PPA between Clifton E.Jensen (for Birch Creek)and Idaho Power requires Birch
Creek Hydro to continually carry Value Loss of Income (VLI)insurance in amounts equal to the
accumulated capacity overpayments.In PPAs containing levelized rates,such as the Birch
Creek Agreement,overpayment occurs during the first part of the PPA term because the
levelized rate paid for power purchases exceeds the estimated value of the power.In later years
of the PPA,the reverse occurs.VLI insurance is intended to provide security to Idaho Power’s
customers in the event the QF permanently or partially curtails its output prior to the end of the
Agreement.
In lieu of providing VU insurance,Birch Creek recently requested that Idaho Power
consider accepting a Certificate of Deposit (CD)as security.In a letter dated October 25,2012,
Idaho Power determined that the CD is acceptable security in lieu of the VLI insurance.
In a decision memorandum dated November 6,2012,Commission Staff reviewed the
parties’request to substitute the CD for VUI insurance.Staff determined that the CD provides an
acceptable source of liquid security comparable to the security that would otherwise be provided
by VLI insurance.Memo at 2.Consequently,Staff recommended approval of the request to
substitute the CD in lieu of the VLI insurance.
At our decision meeting on November 19,2012,the Commission reviewed this
matter and found it was reasonable to accept the CD in lieu of the VLI insurance as overpayment
security in the PPA between Idaho Power and Birch Creek Trout Hydro.
MINUTE ORDER 1
DATED at Boise,Idaho this 7 day of November 2012.
MACK A.REDFORTh,COvIMISSIONER
ATTEST:
Jean D.Jewel!
Commission SeCretary
O:IPC-E-93-Oldh
/0 Ii
MARSHA H.SMITH.COMMISSiONER
PAUL KJELILANIiEft.PRESIDENT
MfNUTE ORDER 7