20141112Fountain Green Plant Exchange.pdf

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November ll,2014
VA OWRNIGHT DELIWRY
201 South Main,Suite 2300
Salt l-ake City, Uah 84lll
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Paul Kjellander
Marsha Smith
Mack Redford
Idaho Public Utilities Commission
472W. Washington Boise, ID 83702
Re: Fountain Green Hydroelectric Plant Exchange
Commissioners:
Idaho Code $61-328 requires that public utilities in Idaho obtain Idaho Public Utilities Commission
approval for the sale or transfer of property in Idaho "which is used in the generation, transmission,
distribution or supply of electric power and energy to the public". Rocky Mountain Power is in the
process of completing an asset exchange that the Company does not believe falls within the scope of
6l-328, but wishes to notiff the Commission of the exchange and determine whether the Commission
desires any further information relating to the transaction.
Rocky Mountain Power wants to notifu the Commission of its decision to discontinue operations
associated with and to dispose of the Fountain Green hydroelectric power plant located near
Fountain Green, Utah (the "Project"). While the property is not located in the state of ldaho, due to
the Company's multi-state allocation agreement a portion of the plant's costs are allocated to Idaho.
The Project consists of a one-unit generator rated at 160 kilowatts ("kW"). In 2011, there was a
partial collapse of the Fountain Green plant powerhouse. Since that time the Company has
explored several options for the future of the Project including restoration with continued
operation, decommissioning and removal, or sale of the Project.
A request for proposal sales package was distributed to 23 interested parties. Six parties provided a
total of seven offers for the project. Confidential Exhibit RMP-I provides a sunmary of those
offers. Through subsequent negotiations, it was determined that a transaction to exchange the
Project for an easement that was required for a portion of the Terminal-Oquirrh 345kV
transmission line constructed in Salt Lake County, (Jtah, represented the best cost risk balance for
customers in lieu of plant decommissioning. This resulted in the execution of an Agreement of
Purchase and Sale included as Confidential Exhibit RMP-3 with this letter. Also see Confidential
Exhibit RMP-2 for an analysis comparing the exchange alternative to the restoration alternative
and in lieu of the decommissioning altemative.
Disposition of the Project by Rocky Moturtain Power will not adversely affect retail or wholesale
customers. The discontinuation of the Project's generation capacity will have no material effect on
Company's generation capacity, which is comprised of approximately 10,579 MW. Rocky
Mountain Power is unaware of any adverse impact to another utility or customers that would result
from the transaction to transfer the Project.
Idaho Public Utilities Commission
November ll,2014
Page2
While the Company believes no action is required by the Idaho Public Utilities Commission, the
tansaction must be approved by the Oregon Public Utility Commission and the Public Service
Commission of Wyoming. If the transaction is approved by those commissions, the disposition of
the Project will be accounted for by transferring the value of the transaction (which includes the
Fountain Green development book value, transaction expenses, estimated closing costs, and cash
granted to the buyer to offset administrative costs of the easement acquired by Rocky Mountain
Power) to the new Terminal-Oquirrh easement asset, resulting in a net zero book loss. If the
transaction is not approved by those commissions, the Company will review the more costly and
higher risk decommissioning alternative.
If you would like any additional information regarding this asset exchange or believe it requires
finther action on the Commission's behalf please feel free to contact Ted Weston at 801-220-
2963.
Sincerely,
{",W?L^enl[S
ice President, Regulation
Terri CarlocMPUC