20110224notice_of_applications_order_no_32192.pdf

Office of the Secretary
Service Date
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
February 24, 2011
IN THE MATTER OF THE APPLICATION OF
ACIFICORP DBA ROCKY MOUNTAIN
POWER FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN ROCKY
MOUNTAIN POWER AND CEDAR CREEK
WIND, LLC (RATTLESNAKE CANYON
PROJECT)
IN THE MATTER OF THE APPLICATION OF
ACIFICORP DBA ROCKY MOUNTAIN
POWER FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN ROCKY
MOUNTAIN POWER AND CEDAR CREEK
WIND, LLC (COYOTE HILL PROJECT)
IN THE MATTER OF THE APPLICATION OF
ACIFICORP DBA ROCKY MOUNTAIN
POWER FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN ROCKY
MOUNTAIN POWER AND CEDAR CREEK
WIND, LLC (NORTH POINT PROJECT)
IN THE MATTER OF THE APPLICATION OF
ACIFICORP DBA ROCKY MOUNTAIN
POWER FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN ROCKY
MOUNTAIN POWER AND CEDAR CREEK
WIND, LLC (STEEP RIDGE PROJECT)
IN THE MATTER OF THE APPLICATION OF
ACIFICORP DBA ROCKY MOUNTAIN
POWER FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN ROCKY
MOUNTAIN POWER AND CEDAR CREEK
WIND, LLC (FIVE PINE PROJECT)
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32192
) CASE NO. PAC-ll-
) CASE NO. PAC-ll-
) CASE NO. PAC-ll-
) CASE NO. PAC-ll-
) CASE NO. PAC-ll-
) NOTICE OF APPLICATIONS
) NOTICE OF
) MODIFIED PROCEDURE
) ORDER NO. 32192
On January 10, 2011 , PacifiCorp dba Rocky Mountain Power filed Applications
requesting acceptance or rejection of five 20-year Finn Energy Sales Agreements (Agreements)
between Rocky Mountain Power and Cedar Creek Wind, LLC for its Rattlesnake Canyon
Coyote Hill, North Point, Steep Ridge and Five Pine wind projects. All five projects (Facilities)
are located near Bingham County, Idaho. The projects will all be "qualifying facilities" (QFs)
under the applicable provisions of the federal PURP
NOTICE OF APPLICATIONS
YOU ARE HEREBY NOTIFIED that, on December 22 , 2010, Rocky Mountain
Power and each of the five wind projects entered into their respective Agreements. Under the
tenns of the Agreements, the wind projects each agree to sell electric energy to Rocky Mountain
Power for a 20-year tenn using the current non-levelized published avoided cost rates as
currently established by the Commission in Order No. 31025 for energy deliveries of less than 10
aMW. Applications at 8-9. The nameplate rating of Rattlesnake Canyon, Coyote Hill and North
Point is 27.6 MW each. The nameplate rating of Steep Ridge and Five Pine is 25.2 MW each.
Under nonnal and/or average conditions, each Facility will not exceed 10 aMW on a monthly
basis. Rocky Mountain Power warrants that the Agreements comport with the tenns and
conditions of the various Commission Orders applicable to PURP A agreements for wind
resources. Order Nos. 30415 , 30488 , 30738 and 31025.
A. The Agreements
YOU ARE FURTHER NOTIFIED that each Facility has selected October 1 2012, as
its Scheduled Commercial Operation Date. Applications at 9. Rocky Mountain Power asserts
that various requirements have been placed upon the Facilities in order for Rocky Mountain
Power to accept the Facilities' energy deliveries. Rocky Mountain Power states that it will
monitor the Facilities' compliance with initial and ongoing requirements through the tenn of the
Agreements. Rocky Mountain Power asserts that it has advised each Facility of the Facility
responsibility to work with Rocky Mountain Power s transmission unit to ensure that sufficient
time and resources will be available for delivery to construct the interconnection facilities, and
transmission upgrades if required, in time to allow each Facility to achieve its October I , 2012
Scheduled Commercial Operation Date.
YOU ARE FURTHER NOTIFIED that Rocky Mountain Power asserts that each
Facility has been advised that delays in the interconnection or transmission process do not
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32192
constitute excusable delays and if a Facility fails to achieve its Scheduled Commercial Operation
Date delay damages will be assessed. Id. at 11. The Applications further maintain that each
Facility has acknowledged and accepted the risk inherent in proceeding with its Agreement
without knowledge of the requirements of interconnection and possible transmission upgrades.
Id. The parties have each agreed to delay liquidated damages and security provisions.
Agreement ~~ 2., 11.1.2. Rocky Mountain Power states that each Facility has also been made
aware of and accepted the provisions in each Agreement regarding curtailment or disconnection
of its Facility should certain operating conditions develop on Rocky Mountain Power s system.
Agreement ~ 6.
YOU ARE FURTHER NOTIFIED that, by their own tenns, the Agreements will not
become effective until the Commission has approved all of the tenns and conditions and declares
that all payments made by Rocky Mountain Power to the Facilities for purchases of energy "are
just and reasonable, in the public interest, and that the costs incurred by (Rocky Mountain
Power) for purchases of capacity and energy from (Cedar Creek) are legitimate expenses, all of
which the Commission will allow (Rocky Mountain Power) to recover in rates in Idaho in the
event other jurisdictions deny recovery of their proportionate share of said expenses.
Agreement ~ 2.
YOU ARE FURTHER NOTIFIED that Rocky Mountain Power s Applications
specifically note the Joint Petition it filed with the Commission on November 5 , 2010, requesting
an immediate reduction in the published avoided cost rate eligibility cap from 10 aMW to 100
kW. Applications at 3. Rocky Mountain Power states that it is aware of and in compliance with
its ongoing obligation under federal law, FERC regulations, and Commission Orders to enter
into power purchase agreements with PURP A QFs. Id. at 4. However, Rocky Mountain Power
is concerned with the increase in power supply costs, and the resulting increase in rates to its
customers, that the current published SAR-methodology avoided cost prices causes as compared
to applying the IRP-methodology or the results from a competitive request for proposal
solicitation.Id. at 5. Rocky Mountain Power points out that published rate purchases "result in
an inherent overpayment to the extent that the project does not offer the same delivery attributes
as the proxy resource on which the avoided costs are calculated. . .. Because a contract under
the published QF rate has minimal flexibility to adjust pricing or the tenns and conditions in the
contract based on the project's characteristics , wind resources have found the QF path more
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32192
conducive to gammg a long tenn power purchase agreement without the project specific
adjustments they would encounter through the IRP-methodology or a competitive request for
proposal solicitation~' Id. at 6.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has detennined that the
public interest may not require a fonnal hearing for these five Applications and will proceed
under Modified Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities
Commission's Rules of Procedure, IDAPA 31.01.01.201 through .204. The Commission notes
that Modified Procedure and written comments have proven to be an effective means for
obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on
these Applications or any individual Application may file a written comment in support or
opposition with the Commission no later than March 24, 2011. The comment must contain a
statement of reasons supporting the comment. Persons desiring a hearing must specifically
request a hearing in their written comments.Written comments concerning any of these
Applications shall be mailed to the Commission and Rocky Mountain Power at the addresses
reflected below:
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Daniel E. Solander
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, UT 84111
Mail: danie1.solander~pacificorp.com
Street Address for Express Mail:
472 W. Washington Street
Boise, ID 83702-5918
Ted Weston
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, UT 84111
Mail: ted.weston~pacificorp.com
Comments should contain the case captions and case numbers shown on the first page of this
document. Persons desiring to submit comments via e-mail may do so by accessing the
Commission's home page located at www.puc.idaho.gov. Click the "Comments and Questions'
icon and complete the comment fonn using the case numbers as they appear on the front of this
document. These comments must also be sent to Rocky Mountain Power at the e-mail addresses
listed above.
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32192
YOU ARE FURTHER NOTIFIED that Rocky Mountain Power may file reply
comments (if necessary) no later than March 31, 2011.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set, the Commission will consider each Application on its merits
and enter Orders without a fonnal hearing. If written comments are received within the time
limit set, the Commission will consider them and, in its discretion, may set the same for fonnal
hearing.
YOU ARE FURTHER NOTIFIED that the five Applications have been filed with the
Commission and are available for public inspection during regular business hours at the
Commission offices. The Applications are also available on the Commission s web site at
www.puc.idaho.gov by clicking on "File Room" and then "Electric Cases.
YOU ARE FURTHER NOTIFIED that all proceedings in these cases will be held
pursuant to the Commission s jurisdiction 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-tenn obligations for the purchase of
energy from qualified facilities and to implement FERC rules.
YOU ARE FURTHER NOTIFIED that all proceedings regarding these Applications
will be conducted pursuant to the Commission s Rules of Procedure, IDAPA 31.01.01.000
seq.
ORDER
IT IS HEREBY ORDERED that these cases be processed under Modified Procedure.
Interested persons and the parties may file written comments no later than March 24, 2011.
IT IS FURTHER ORDERED that Rocky Mountain Power may file reply comments
no later than March 31 , 2011.
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32192
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this '1110
day of February 2011.
~J.
. -
. K MPT , P SIDENT
MARSHA H. SMITH, COMMISSIONER
~-J-A
MACK A. REDFORD , COMMISSIONER
ATTEST:~Dp
D. Jew
Commission Secretary
O:PAC-11-PAC-II-PAC-II-PAC-II-PAC-11-
NOTICE OF APPLICATIONS
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32192