160226_IPCSimplot.pdf

Idaho Power, Simplot’s Pocatello plant renew contract

Case No. IPC-E-16-01, Order No. 33471
Contact: Gene Fadness [phone]
www.puc.idaho.gov

BOISE (Feb. 26, 2016) – The Idaho Public Utilities Commission is approving an application by
Idaho Power Company to extend the utility’s energy sales agreement with J.R. Simplot
Company’s Pocatello plant for three years.

Idaho Power buys output from a cogeneration facility at the Pocatello plant, but the contract
expires March 1. Cogeneration (also known as “combined heat and power”) is the production
of power from the excess heat or steam that is the byproduct of a manufacturing process.
The cogeneration plant at the fertilizer plant can produce up to 15.9 megawatts, but the
contact is for 10 average MW per month, the maximum amount allowed for a cogeneration
project receiving the commission’s published rates. If output does exceed 10 aMW, Simplot
agrees that Idaho Power will accept the inadvertent energy, but will not pay for it.
The Pocatello plant is a qualifying facility under the provisions of the federal Public Utility
Regulatory Policies Act of 1978. PURPA requires regulated utilities to buy energy from
qualifying renewable generation projects at rates published by state commissions. The rate to
be paid qualifying facilities is called an “avoided-cost rate,” because it is based on the cost the
utility avoids by not having to generate the energy itself or buy it from another source. The
commission must ensure the avoided-cost rate is reasonable for utility customers because the
price utilities pay to qualifying small-power producers is included in customer rates.
The rate under the proposed three-year contract would be $54.39 per megawatt-hour in 2016,
$55.05 in 2017 and $56.62 in 2018. The rates are adjusted seasonally and for heavy- and light-
load hours.
The commission’s order and other documents related to this case are available on the
commission’s Website. Click on “Open Cases” under the “Electric” heading and scroll down to
Case No. IPC-E-16-01.

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