20240528Final_Order_No_36197.pdf

Office of the Secretary
Service Date
May 28,2024
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER ) CASE NO. IPC-E-24-01
COMPANY'S APPLICATION FOR )
APPROVAL OF A POWER PURCHASE )
AGREEMENT WITH PVS 2,LLC ) ORDER NO. 36197
On January 3, 2024, Idaho Power Company ("Company"), applied for approval of a
20-year Power Purchase Agreement ("PPA") between the Company and PVS 2, LLC ("PVS 2").
The Company requested that the Commission issue an order approving the PPA prior to July 3,
2024.
On February 15, 2024, the Commission issued a Notice of Application and Notice of
Modified Procedure, setting public comment and Company reply deadlines. Order No. 36088.
Staff submitted the only comments.
Having reviewed the record, the Commission issues this Final Order approving the
PPA between the Company and PVS 2.
BACKGROUND
The Company and Brisbie LLC ("Brisbie") previously negotiated a Special Contract
for the Company to provide electric service to Brisbie. The Special Contract, or Energy Services
Agreement ("ESA"), was filed and received Commission approval in Case No. IPC-E-21-42. See
Order Nos. 35777 and 35958. The PPA was formed with the expectation of assigning the
associated energy and Green Tags/Environmental Attributes to Brisbie under the provisions
contained in the ESA.
THE APPLICATION
The Company seeks approval of a PPA that requires PVS 2 to build, own, operate, and
maintain a 125 megawatt alternating current solar photovoltaic generation facility ("Facility").
Under the PPA, the Facility will function as a resource dedicated to Brisbie's annual renewable
energy requirements, but the Facility's output will be supplied via the Company's system. The
Scheduled Commercial Operation Date for the Facility is December 31, 2026, with a Guaranteed
Commercial Operation Date 180 days later.
The PPA contains a performance requirement in the form of an Output Guarantee,
which requires delivery of 90 percent of the Facility's Expected Energy,and allows for adjustment
ORDER NO. 36197 1

of the Estimated Monthly Net Output Amounts by the 25th day of the preceding month. The PPA
also contains provisions for operation and control of the project including planned outages, forced
outages, maintenance outages, as well as scheduling, forecasting, generator output limit control,
and metering.
Brisbie is a third-party beneficiary of the PPA, receiving energy and Green Tags
associated with the Facility's Net Output. Although the Company will receive all the
Environmental Attributes associated with the Facility, Brisbie will claim them pursuant to the
ESA.
STAFF COMMENTS
Based upon its review of the Application, the PPA, the Company's responses to
production requests, and other supporting materials, Staff recommended that the Commission
approve the PPA between the Company and PVS 2 and declare that all payments to the PVS 2 be
allowed as prudently incurred expenses for ratemaking purposes. In reviewing the PPA, Staff
focused on the resource selection process, the parent guaranty, and the Market Price Index.
Resource Selection Process
As the Company is currently identifying resources to meet system needs, Staff was
concerned that the Facility was selected as a dedicated resource for Brisbie when it should have
been selected as a low-cost resource available to all Company customers.However,after reviewing
the process used to select the Facility as a resource dedicated to Brisbie, Staff believes Brisbie was
not favored over the Company's other customers.
In responding to Staff s production requests, the Company indicated that Brisbie
conducts its own requests for proposals ("RFP") to evaluate and identify projects. This process
resulted in selection of the Facility and its development by the same developer as the 200-MW
Pleasant Valley Solar project,which we approved in Order No. 35739. Staff verified that Brisbie's
RFP process was conducted independently of the Company's selection process for resources to
serve its system.
Staff further noted that the Facility was not included in any of the bids in the Company's
RFPs. Accordingly, Staff did not believe there was a conflict of interest affecting the Company's
access to low-cost resources for system needs.
ORDER NO. 36197 2

Parent Guaranty
The ESA requires Brisbie to obtain a guaranty covering potential costs incurred, if
Brisbie stops taking the Facility's Output. Staff indicated that Brisbie obtained a parent guaranty
from Meta Platforms, Inc. ("Meta"), satisfying the guaranty requirement.
Market Price Index
Staff noted that the term "Market Price Index" appears multiple times in the PPA. For
example, the term appears in Section 1.57 "Idaho Power's Cost to Cover" and Section 1.126
"Seller's Cost to Cover"2. As defined in the PPA, "Market Price Index"means:
82.4% of the monthly arithmetic average of each day's Intercontinental Exchange
("ICE") daily firm Mid-C Peak Avg and Mid-C Off-Peak Avg index prices with
such prices being the index representing, or adjusted to assume, a price for energy
that is not delivered to a final point of delivery in a balancing authority area located
entirely in Washington, or a designated scheduling point associated with a
Washington retail provider within a balancing authority area operated by a federal
power marketing administration... (emphasis added).
PPA at 10. Staff believed that this definition is reasonable, prevents Washington's Climate
Commitment Act ("CCA") from impacting Idaho customers, and aligns with the Commission's
prior decision that Idaho customers should not bear CCA cost. See Order No. 36015.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter under Idaho Code §§ 61-501, -502
and-503.The Commission is empowered to investigate rates,charges,rules,regulations,practices,
and contracts of public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provision of the law, and to fix the same by order. Idaho
Code §§ 61-502 and-503.
Having reviewed the record, the Commission finds it fair, just, and reasonable to
approve the Company's Application. As previously noted, the PPA was formed with the
expectation of assigning the energy and associated Environmental Attributes to Brisbie under an
ESA we previously approved in Order Nos. 35777 and 35958. The evidence in the record shows
that the selection of the Facility as a dedicated resource for Brisbie did not result from preferential
treatment by the Company. Additionally, the guaranty Brisbie obtained from Meta and the
definition of the term "Market Price Index" will insulate the Company's other customers against
potential negative effects that could arise from the PPA. Accordingly, we find it reasonable to
ORDER NO. 36197 3

approve the PPA between the Company and PVS 2 and declare that all payments to PVS 2 be
allowed as prudently incurred expenses for ratemaking purposes.
ORDER
IT IS HEREBY ORDERED that the Company's Application for approval of the PPA
between the Company and PVS 2, LLC is approved.
IT IS FURTHER ORDERED that all payments to PVS 2 under the PPA are allowed as
prudently incurred expenses for ratemaking purposes.
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 about any matter
decided in 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 28th day
of May 2024.
ERIC ANDERSON, PRESIDENT
?HN R. HAMMOND JR., COMMISSIONER
G
EDWARD LODGE, C r MISSIONER
ATTEST:
I jj�gx�
Mo i arr a z
Commission Secretary
I ALept\ELECTRIC\IPC-E-24-01_P V S2\orders\IPCE2401_final_at.docx
ORDER NO. 36197 4