Idaho Public Utilities Commission
Case No. IPC-E-08-21, Order No. 30697
January 9, 2009
Contact: Gene Fadness (208) 334-0339, 890-2712
Idaho Power proposes contract with large Pocatello manufacturer
Idaho Power Company is asking state regulators to approve an energy sales agreement with Hoku Materials, Inc., a polysilicon production facility in Pocatello.
Because of constraints on its power supply and transmission, Idaho Power is unable to meet Hoku’s request of 82 megawatts of year-round capacity. However, Idaho Power is asking the Idaho Public Utilities Commission to approve a four-year seasonally-shaped contract that allows Hoku to reduce demand during peak summer months through 2012, the year Idaho Power expects to have enough power supply and transmission to serve Hoku at full capacity. During those peak months, Hoku would reduce its demand by performing annual maintenance on its systems.
Idaho Power’s rate schedule requires that large power service customers whose demand exceeds 25 MW make special contract arrangements with the company. (Idaho Power’s other special-contract customers include Micron in Boise, the INEL site in eastern Idaho and the Simplot plant in Pocatello.) Contracts for large-load customers provide protection to the company and other retail customers from system impacts that some large loads could impose because of their sheer size or operating characteristics.
The commission is taking comment on the proposed sales agreement through Feb. 3.
The contract would require Hoku to “take or pay” for a certain amount of energy from Idaho Power every month. However, Hoku would be allowed to request a release from that commitment if it notifies Idaho Power in advance. The utility would then make a commercially reasonable effort to absorb or resell the released energy and provide a credit to Hoku.
The contract further proposes that if Hoku desires to take energy beyond what Idaho Power can provide during the summer, Idaho Power would make a reasonable effort to obtain proposals to supply Hoku’s request from other energy providers. If power is available, the additional purchase would be contingent on Idaho Power’s ability to deliver the power and upon Hoku’s acceptance of the price of the available power. Hoku would be responsible for the full cost of the power purchase as well as delivery to the plant.
Hoku is paying the costs for Idaho Power to build the transmission and substation upgraded needed to enable delivery of energy to Hoku’s facilities.
Under the proposed four-year sales agreement, the rates Hoku would pay Idaho Power are divided into two blocks. The first block of energy (25 MW) would be priced at a traditional embedded rate and the second block (25 MW and more) would be priced at a rate that includes an additional marginal price to cover added costs needed to serve a large-load customer, thus ensuring those costs aren’t passed on to other customers. After the four-year contract is expired and if Idaho Power has completed the necessary transmission and generation expansion to serve Hoku at year-round capacity, the utility will recommend that Hoku be treated just like all other special-contract customers for ratemaking purposes.
Comments are accepted via e-mail by accessing the commission’s homepage at www.puc.idaho.gov and clicking on "Comments & Questions." Fill in the case number (IPC-E-08-21) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.
A full text of the commission’s order, along with other documents related to this case, is 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 the above case number.