Idaho Public Utilities Commission
Case No. IPC-E-08-13, Order No. 30613
August 14, 2008
Contact: Gene Fadness (208) 334-0339, 890-2712
PUC accepts power purchase agreement between Idaho Power, Montana provider
State regulators have approved an Idaho Power Co. contract to buy 83 megawatts per hour from a Montana energy provider during heavy load hours in the months of June, July and August beginning in 2010.
The two-year power purchase agreement is with PPL EnergyPlus, LLC, the marketing arm of PPL Montana. (PPL Montana acquired most of the generating assets sold by the former Montana Power Company when the state of Montana deregulated its electric utility industry several years ago.) The agreement with EnergyPlus replaces an Idaho Power/PPL Montana contract that expires at the end of August 2009. The agreement is effective June 1 through Aug. 31, 2010, and June 1 through Aug. 31, 2011, providing electricity for 16 hours, six days a week, Monday through Saturday.
Idaho Power issued a request for bids to replace the expiring PPL Montana contract and EnergyPlus was the successful bidder. The price to be paid for the energy is $92.95 per MWh. In addition to the energy price, Idaho Power will buy firm monthly transmission services across Northwestern Energy’s transmission system in Montana to Idaho Power’s Jefferson delivery point near the Montana-Idaho border. That moves the total price, including energy and transmission, to $101 per MWh.
The price is fair and reasonable when compared to other possible sources, the commission said, but noted that there is good reason to limit the contract for two years, given fluctuating prices. “We find it reasonable to conclude that without the purchase, the company will not have sufficient resources to meet its summer peak load requirements for those years,” the commission said.
Contracting with EnergyPlus is also advantageous, Idaho Power maintains, because of existing transmission constraints on the west side of Idaho Power’s system, which makes power purchases on the east side preferable.
The commission also approved Idaho Power’s request that expenses associated with the purchase of the energy and the transmission capacity be included in the company’s annual Power Cost Adjustment which is filed in mid-April of every year and becomes effective for customers on June 1.
Documents related to this case, are available on the commission’s Web site at www.puc.idaho.gov. . Click on “File Room” and then on “Electric Cases” and scroll down to Case Number IPC-E-08-13.