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Home My WebLink About20051019Filing of conforming agreement.pdf825 E. Multnomah St. Portland OR 97232 Please Reply To: PAC I F I CORP PACIFIC POWER UTAH POWER Lisa Nordstrom, Legal Counsel Suite 1800 Direct Dial (503) 813-6227 Fax (503) 813-7252 Email: lisa.nordstrom~pacificorp.com October 18 , 2005 Idaho Public Utltities CornmisBioi' Office of the SecretaryRECEIVED OCT 1 \8 2005 ELECTRONIC & OVERNIGHT MAIL Boise. Idaho Idaho Public Utilities Commission 472 West Washington Boise, ill 83702-5983 Re:Case No. PAC-05- Filing of Conforming Schwendiman Purchase Power Agreement Dear Commissioners: In Order No. 29880 issued in the above referenced case, the Commission permitted PacifiCorp and Schwendiman Wind LLC to file an amended and conforming purchase power agreement within 14 days of its October 4th Order. Schwendiman has declined to enter into an agreement that includes the performance band. At the suggestion of Commission Staff and request of Schwendiman, PacifiCorp is preparing indicative pricing and terms for a non-standard QF contract using the Commission-approved IRP methodology for QF projects greater than 10 aMW. The Company expects to supply pricing and terms to Schwendiman by the end of October. The Company believes that, with modifications to address the Commission s three concerns identified in Order No. 29880, the Mechanical Availability Guarantee (MAG) provision would provide a comparable level of predictability and performance to the 90/110 performance band. PacifiCorp supported the 90/110 performance band in the consolidated Cases IPC-04-8 and IPC-04-10 for the purpose of the QF meeting its monthly contractual delivery obligation, and the Company continues to believe that under certain circumstances such a methodology is merited. However, PacifiCorp is concerned that the performance band could create additional costs to the Company and its ratepayers due to new accounting rules for Company debt (e., the application of Emerging Issues Task Force 01-Determining Whether an Arrangement Contains a Lease). While these costs may be taken into account in a competitive procurement Idaho s published avoided cost rates for standard QF power purchase agreements do not reflect S:\LegalDept\Nordstrom\Cases by State\ldaho\Schwendiman PPA\PAC-O5-9 Advisory Letter Final.doc such costs. PacifiCorp will continue to actively participate in Case No. IPC-05-22' intermittent QF proceedings to address the implication and impact of these costs as well as the wind integration and avoided cost issues in that Docket. Respectfully submitted/l V1/l ~v ~() Lisa Nordstrom Legal Counsel Enclosures S:\LegalDept\Nordstrom\Cases by State\Idaho\Schwendiman PP A \P AC-O5-9 Advisory Letter Fina1.doc PROOF OF SERVICE I hereby certify that on this 18th day of October 2005 I caused to be served, via electronic overnight, and/or U.S. mail, a true and correct copy of the foregoing Advisory Letter in Case No. P AC-05-9 to the following parties as shown: Jean Jewell Commission Secretary Idaho Public Utilities Commission 472 West Washington Boise, ill 83702 Bruce Griswold Manager Origination PacifiCorp 825 NE Multnomah, Suite 600 Portland, OR 97232 Scott Woodbury Deputy Attorney General Idaho Public Utilities Commission 472 West Washington Boise, ill 83702 Dean J. Miller, Esq. McDevitt & Miller LLP 420 W. Bannock Boise, ill 83702 Brian D. Jackson, P. 7800 Alfalfa Lane Melba, ill 83641 Lisa Nordstrom Office of the General Counsel PacifiCorp 825 NE Multnomah, Suite 1800 Portland, OR 97232 iane Glenn Legal Secretary S:\LegalDept\Nordstrom\Cases by State\Idaho\Schwendiman PP A \P AC-O5-9 Advisory Letter Final.doc