20071205final_order_no_30472.pdf

Office of the Secretary
Service Date
December 5, 2007
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
ACIFICORP FOR APPROVAL OF A POWER
PURCHASE AGREEMENT FOR THE SALE
AND PURCHASE OF ELECTRIC ENERGY BETWEEN P ACIFICORP AND SCHWENDIMAN WIND LLC
CASE NO. P AC-05-
ORDER NO. 30472
On March 31 , 2006, the Idaho Public Utilities Commission (Commission) in Case
No. PAC-05-, Order No. 30000, approved a January 27, 2006 Amended Power Purchase
Agreement between Schwendiman Wind LLC and PacifiCorp dba Utah Power & Light
(PacifiCorp; Company).As reflected in the underlying Second Amended Agreement
Schwendiman proposes to design, construct, install, own, operate and maintain a wind generating
facility with a nameplate capacity rating of 20 MW to be located in Bonneville County, Idaho at
a location more particularly described as Sections 3 and 4, Township 2 North, Range 39 East and
Sections 33 and 34, Township 3 North, Range 39 East, Boise Meridian. Pursuant to the First
Amended Agreement, PacifiCorp was to purchase the net output of 7.15 aMW from the 82.
MW clipper wind generators comprising the QF. The Amended Agreement approved by the
Commission contemplated an estimated annual sale and purchase of 62 723 088 kWh. The
scheduled commercial operation date in the Amended Agreement was changed to July 31 , 2007.
On September 24, 2007, PacifiCorp dba Rocky Mountain Power and Schwendiman
Wind LLC filed a Joint Motion with the Commission for approval of a Second Amended Power
Purchase Agreement (Second Amended Agreement) dated September 7, 2007. Prior to the
Commission s consideration of the Second Amended Agreement, the parties notified the
Commission that minor changes to the contract were required. The Company requested that the
Commission refrain from considering the Second Amended Agreement. On November 19
2007, a Third Amended Agreement dated October 16, 2007 incorporating all changes included in
the Second Amended Agreement was submitted for approval.
Rocky Mountain Power and Schwendiman Wind entered into a 20-year Power
Purchase Agreement on July 19, 2005 (the Original Agreement) and submitted it to the
Commission for approval in this docket on August 15 2005. Pursuant to Order Nos. 29880 and
ORDER NO. 30472
29921 , the parties submitted an Amended Agreement (September 26, 2006 Agreement) which
was subsequently approved by the Commission on March 31 , 2006 in Order No. 30000.
As set forth in the January 27, 2006 Agreement, Schwendiman Wind proposes to
design, construct, install, own, operate and maintain a wind generating facility with a nameplate
capacity of 20 MW to be located in Bonneville County, Idaho (the facility). Schwendiman Wind
would sell approximately 7.15 aMW of electric energy generated by the facility to the Company.
As previously described in the Application and exhibits filed August 15, 2005 , the facility has
been self-certified with FERC as a qualified small power production facility (QF) under the
Public Utility Regulatory Policies Act of 1978 (PURP A), and would interconnect with the
Company s system on the Sugar Mill/Goshen-Rigby 69 kV line 11 miles northeast of Idaho
Falls, Idaho.
Changes to the January 27, 2006 Agreement
The Third Amended Agreement includes the following changes to the January 27
2006 Agreement:
(a) Replace Exhibits A, B, D, and F-with new exhibits reflecting
Schwendiman Wind's substitution of Nordic wind turbines for Clipper
wind turbines;
(b) Update the Recitals to reflect the Nordic wind turbine output (average
annual Net Output reduced from 62 723 088 to 53 923 276 kilowatt hours
(kWh));
(c) Move forward in time on the Scheduled Commercial Operation Date
(from July 31 , 2007 to November 1 , 2008) and other intermediate
milestones in Section 2;
(d) Stipulate (in Section 2.3) to Schwendiman Wind's liability for Delay
Liquidated Damages, from August 1 , 2007, until the Commercial
Operation Date;
(e) Update the capacity factor table in Section 4.1 to reflect the substitution
of turbines; and
(f) Add a new Section 22 containing security provisions applicable to
Schwendiman Wind. "Default Security" ($275 000) amount identified as
the estimated value of Delay Liquidated Damages (replacement power)
from August 1 , 2007 to the new Commercial Operation Date, November
, 2008.
ORDER NO. 30472
The Third Amended Agreement also adds pricing for the year 2028 in Section 5 and
updates obsolete contract information in Section 21. Otherwise, PacifiCorp contends no
substantive changes to the January 27 , 2006 Agreement are contemplated.
PacifiCorp requests a Commission Order approving the Third Amended Power
Purchase Agreement without change or condition; and reaffirming that prices to be paid for
energy and capacity are just and reasonable, in the public interest, and that the costs incurred by
the Company for purchasing capacity and energy from Schwendiman Wind are legitimate
expenses, all of which the Commission will allow the Company to recover from rates in Idaho in
the event other jurisdictions deny recovery of their proportionate share of said expenses.
COMMISSION FINDINGS
The Commission has reviewed and considered the filings of record in Case No. PAC-
05-09 including our prior Order No. 30000 and the submitted Third Amendment dated
October 16, 2007. We note that Commission Staff has reviewed the Third Amendment and
recommends approval without further notice or procedure. We find that the changes set forth in
the Third Amended Agreement have been negotiated and agreed to by the contracting parties.
We find the proposed changes to be just and reasonable.
The Commission further finds it reasonable that the submitted Agreement be
approved without further notice or procedure. We also find it reasonable to allow payments
made under the Agreement as prudently incurred expenses for ratemaking purposes. In the event
that other jurisdictions deny PacifiCorp recovery of their proportionate share of said purchase
expenses, those costs may be assigned on a situs basis to PacifiCorp s Idaho jurisdiction in
accordance with the terms of the Revised Protocol adopted in Case No. P AC-02-, Order No.
29708.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over PacifiCorp dba Rocky
Mountain Power, an electric utility, pursuant to the authority and power granted it under Title 61
of the Idaho Code and the Public Utility Regulatory Policies Act of 1978 (PURP A).
The Commission has authority under PURP A and the implementing regulations of
the Federal Energy Regulatory Commission (FERC) to set avoided costs, to order electric
utilities to enter into fixed term obligations for the purchase of energy and capacity from
qualified facilities (QFs) and to implement FERC rules.
ORDER NO. 30472
ORDER
In consideration of the foregoing, IT IS HEREBY ORDERED and the Commission
does hereby approve the October 16, 2007 Third Amended Power Purchase Agreement between
Schwendiman Wind LLC and PacifiCorp dba Rocky Mountain Power.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code ~ 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
!j~
VI"b.:..r
day of v'Cmber 2007.
MACK A. REDFORD, PRESIDENT
lJ~
MARSHA H. SMITH, COMMISSIONER
ATTEST:
bls/O:PAC-05-09 sw3
ORDER NO. 30472