20240717Staff Comments.pdf

RECEIVED
Wednesday, July 17, 2024 1:35:15 PM
IDAHO PUBLIC
UTILITIES COMMISSION
ADAM TRIPLETT
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10221
Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY'S APPLICATION FOR ) CASE NO. IPC-E-24-18
APPROVAL OF A CLEAN ENERGY YOUR )
WAY CONSTRUCTION AGREEMENT WITH )
THE CITY OF BOISE AND THE FIRST ) COMMENTS OF THE
AMENDMENT THERETO ) COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission, by and
through its Attorney of record, Adam Triplett, Deputy Attorney General, submits the following
comments.
BACKGROUND
On April 23, 2024, Idaho Power Company("Company") applied for approval of a Clean
Energy Your Way("CEYW") Construction Agreement("Agreement") with the City of Boise
("City" or"Customer") as well as the First Amendment thereto ("Amendment"). The Company
submitted copies of both the Agreement and Amendment as attachments and requests the matter
be processed by Modified Procedure with an order prior to September 1, 2024.
The Company represents that the Agreement authorizes the City to buy up to 10
megawatts ("MW") from the Power Purchase Agreement between the Company and Black Mesa
STAFF COMMENTS 1 JULY 17, 2024

Energy, LLC ("PPA").1 The Amendment corrects and clarifies the Agreement by defining the
terms "Project Output" and"Supplemental Energy" and by modifying Exhibit 1 to include
certain language increasing clarity and flexibility in the administration of the amended
Agreement ("Amended Agreement"). The Company represents that these modifications ensure
that rate changes will occur in separate proceedings as required by Order Nos. 35482 and 35777.
The City has multiple accounts with the Company and intends to participate in the
CEYW Construction option by applying two of the City's Schedule 19 accounts to the provisions
set in the CEYW Construction option. Framework for the current CEYW Construction option
was proposed by the Company in Case No. IPC-E-21-40, approved by the Commission in Order
No. 35893, and is detailed in the Company's current Tariff Schedule 62.
There are two customers of the Company that currently participate in the CEYW
Construction option, Micron Technology, Inc. ("Micron"), and Brisbie, LLC (`Brisbie"). The
present Application is the Company's first request to authorize a Schedule 62 CEYW
Construction Agreement with a customer billed under Schedule 19. The Application also
represents the first request to authorize a CEYW Construction Agreement without construction
of a new resource. The Company proposes that the City procure renewable energy from the
existing Black Mesa Renewable Energy Facility ("REF"), currently providing Micron with
renewable energy through CEYW.
STAFF ANALYSIS
Staff supports approval of the Amended Agreement as filed with the exception of
correcting an error in Table 1 of the First Revised Exhibit 1. Staff believes the Amended
Agreement is reasonable because it is consistent with previously approved CEYW agreements
and protects the Company and other customers from liability. This conclusion is based on
Staffs review of the Application, the Amended Agreement, and identification of potential issues.
Amended Agreement Provisions
In reviewing the Company's proposed Amended Agreement with the City, Staff
considered compliance with Schedule 62, its consistency with other Commission approved
' The Commission approved the PPA in Order No. 35482.
STAFF COMMENTS 2 JULY 17, 2024

CEYW Construction agreements, and provisions to protect the Company and Customers from
financial harm.
Staff reviewed terms of the Amended Agreement and compared them to the approved
Schedule 62, Section 2: Clean Energy Your Way—Construction. Key elements examined
include applicability, resource size, and treatment of net consumption and excess generation.
The CEYW Construction option allows Schedule 19 and Special Contract customers to buy
energy sourced from REFs and for energy to be served at multiple service points. The City has
multiple accounts under different Schedules with the Company. Only the City's Schedule 19
accounts at the Boise Airport and the Lander Street Water Renewable Facility ("Lander
Facility") are considered in the Application. Application at 4. Staff believes that the City's
selected service locations comply with the CEYW Construction terms.
The City's share of the REF will be up to 8 MW effective September 1, 2024; up to 9
MW effective September 1, 2025; and up to 10 MW effective September 1, 2026. Per Schedule
62, the REF size is not to exceed 110 percent of the participating service points' annual energy
consumption. The Company provided annual energy consumption forecasts through 2033 from
the City's Boise Airport and Lander Facility. See Response to Production Request No. 4,
Confidential Attachment 3. Staff reviewed the consumption data and found the City's share of
REF generation does not exceed 110 percent of the City's forecast of combined consumption at
the two service points in any of the forecasted years.
Net Consumption and Excess Generation are both calculated on an hourly basis. Net
Consumption represents the customer-metered kWh usage minus the line loss-adjusted energy
delivered from the REF to Idaho Power's system. The City will pay the standard Schedule 19
energy charges when usage at its service points exceeds REF energy generation. Application at
6. Excess Generation occurs when the City's share of REF energy generation exceeds the energy
requirement at the Customer's service points. The Customer shall receive credit for Excess
Generation at a rate stated in the Renewable Construction Agreement. Staff finds that treatment
of Net Consumption and Excess Generation complies with Schedule 62.
In addition to reviewing the Company's proposed Amended Agreement for compliance
with Schedule 62, Staff reviewed existing CEYW Construction agreements and compared key
points with the Company's proposed Amended Agreement with the City. The analysis is
summarized in Table No. I below.
STAFF COMMENTS 3 JULY 17, 2024

Table No. 1: Comparison of Proposed Amended Agreement and Approved CEYW Agreements
City of Boise Micron Technology, Brisbie, LLC
Inc.
Order Number Pending 35482 35777
Net Consumption Price Schedule 19 Schedule 26 Schedule 19 up to
per kWh 20MW. IRP
Supplemental
Energy Price above
20 MW
Excess Generation Price Lower of Mid-C Lower of Mid-C Lower of Mid-C
per kWh price or actual Mid-C price or actual Mid-C price or actual Mid-
hourly price with hourly price with C hourly price with
85% adjustment. 85% adjustment. 85% adjustment.
Fixed Cost Component Schedule 62 Schedule 26 Schedule 33
of Energy Charge. Paid
to Company for REF
Energy Usage.
Renewable Capacity Schedule 62 Schedule 26 Schedule 33
Credit Rate
REF Credit eligibility July 1, 2026 based on July 1, 2026 based on June 1, 2023
date 2026 Capacity 2026 Capacity
Deficiency Year Deficiency Year
Contingency Fund per $81,000 $90,000 Yes-confidential
MW of REF Size
STAFF COMMENTS 4 JULY 17, 2024

Staff does not present Table No. 1 to discuss every similarity and difference between the
City, Micron, and Brisbie Agreements, but rather to verify that key components of the
Company's proposed Amended Agreement with the City are included and that the pricing
mechanisms are consistent with other Commission approved agreements for CEYW
Construction customers. Staff highlights that the Excess Generation Price in the proposed
Amended Agreement, which was of considerable discussion in cases IPC-E-22-06 and IPC-E-
21-42, is equal to that of the Micron and Brisbie Agreements.
Consistent with approved agreements, the proposed Amended Agreement contains a
provision to protect the Company and its customers in the event the City cannot meet its
financial obligations of the PPA. Application at 7. This provision establishes a contingency
fund in which the City must deposit funds upon execution of the Amended Agreement. Funds
are made available to the Company in the event of default by the City.
Pricing and Billing Terms
Staff reviewed the Company's proposed pricing and billing terms and believes they are
reasonable. Staff believes the terms are reasonable because they help prevent cost shifting to the
Company's other retail customers and are consistent with other CEYW agreements. However,
Staff identified an error in Table 1 of the First Revised Exhibit 1 that should be corrected.
Staff s review focused on the terms important to prevent cost shifting to other customers which
include: (1) the billing charges and fixed cost charge; (2) the REF cost and capacity credit; and
(3)the Excess Generation Price.
Billing Charges and Fixed Cost Charge
Staff supports the proposed billing charges and the fixed cost charge because they are
consistent with the CEYW Construction option in Schedule 62. The City will be billed under
Schedule 19 for all standard services not associated with Black Mesa. Application at 6. In
addition to the standard Schedule 19 charges, the City will be billed a fixed cost charge for each
kWh of generation received from Black Mesa. The fixed cost charge helps ensure full recovery
of capacity-related costs embedded in Schedule 19 volumetric rates.
STAFF COMMENTS 5 JULY 17, 2024

REF Cost and Capaci . Credit
Staff believes the terms for the REF cost and capacity credit are reasonable because the
REF costs are aligned with other CEYW agreements, and the REF capacity credit uses the same
method approved in Micron's special contract. The City will be responsible for the REF costs
including paying the contract rate for their share of output from Black Mesa and any other costs
incurred to certify the environmental attributes. The City will receive a REF capacity credit for
the benefit the Company's system receives from the capacity contribution of the REF. The REF
capacity credit is based on the same method used to determine the capacity credit for Black Mesa
in Micron's special contract.
Staff identified an error related to the calculated Renewable Capacity Contribution value
in Table 1 of the First Revised Exhibit 1. This value does not impact the calculated REF
capacity credit, but Staff believes it should be updated to make Table 1 accurate. In
supplemental response to Staff s Production Request No. 2, the Company stated they plan to
execute a Revised Exhibit 1 with the City that includes an updated Table 1 after receiving a final
Commission order in this case. Staff recommends the Company submit a compliance filing
updating Table 1 of the First Revised Exhibit 1.
Excess Generation Price
The Company's proposed method for determining the Excess Generation Price is
reasonable because it uses the same method as other CEYW agreements. However, the
Company has proposed to compensate the City for Excess Generation using the Mid-C market
forecast prices from the 2023 IRP, which are currently being reviewed in Case No. IPC-E-24-23.
Staff recommends the Company use the hourly Mid-C price forecast from the 2021 IRP until an
hourly Mid-C forecast is approved by the Commission in IPC-E-24-23.
The First Revised Exhibit 1 defines the Excess Generation Price as (1) 85 percent of the
hourly Mid-C Forecast, with a non-firm adjustment applied to each hour's price, or(2) the actual
heavy or light load hour(as applicable) Mid-C market price for each hour of Excess Generation
delivered. First Revised Exhibit 1 at 1. This is the same method used in the Micron and Brisbie
CEYW contracts, which Staff believes is reasonable.
However,until the Mid-C forecast from the 2023 IRP is approved, Staff believes the
2021 IRP Mid-C pricing should be used. Based on the Modified Procedure schedule for IPC-E-
STAFF COMMENTS 6 JULY 17, 2024

24-23, Staff believes the Company would only use the 2021 IRP Mid-C forecast to determine the
Excess Generation Price for a couple of months until a new Mid-C forecast is approved in IPC-
E-24-23.
Impact on Other Customers
Staff reviewed the Company's no-harm analysis to evaluate the impact on other
customers. In addition, Staff identified issues that could impact other customers due to the
approval of the Amended Agreement. Staff believes the no-harm analysis is reasonable and
helps show that other customers will not be harmed by the City's Agreement. One issue Staff
identified is the need to update Tables 1 and 2 in Schedule 26 to reflect Micron's new allocation
of the Black Mesa Project. A second issue identified is a continuation of Staff s concern with
how CEYW Construction customers treatment of system-generated Renewable Energy Credits
("RECs") in the Power Cost Adjustment ("PCA")will impact other customers.
The Company's no-harm analysis is reasonable because it evaluates the appropriate
variables that could impact other customers and performs a sensitivity analysis to evaluate higher
Mid-C prices. The Company's analysis shows other customers should not be harmed under
expected and higher than expected Mid-C prices.
Staff reviewed Micron's Special Contract and Schedule 26 to determine if they need to be
modified. The Company's response to Production Request No. 2 stated that no aspect of
Micron's Special Contract or Schedule 26 will need to be modified due to the City's CEYW
Agreement. However, in supplemental response to Staff s Production Request No. 2, the
Company provided a modified Schedule 26 that updates Table 1 and 2 to reflect Micron's new
allocation of the Black Mesa Project. In addition, the Company proposes to submit this modified
Schedule 26 through a compliance filing following a final Commission order in this case. Staff
supports this proposal and recommends the Company submit the modified Schedule 26 through a
compliance filing.
Staff continues to have some concern with the treatment of system-generated RECs in the
PCA for CEYW Construction customers. Staffs concern with the City's Agreement is lessened
due to the Black Mesa project previously being approved by the Commission and due to the
small size of the project included in the Agreement relative to other CEYW Construction
STAFF COMMENTS 7 JULY 17, 2024

projects. Staff plans to continue to evaluate the treatment of system-generated RECs in the PCA
for CEYW Construction customers as new Agreements and projects come on to the system.
STAFF RECOMMENDATION
Staff recommends that the Commission approve the Amended Agreement contingent on
a compliance filing correcting the following:
1. Updating Table 1 of the First Revised Exhibit 1 to reflect the City's allocation of the
Black Mesa Project; and
2. Updating Tables 1 and 2 in Schedule 26 to reflect Micron's new allocation of the
Black Mesa Project.
In addition, Staff recommends the Commission direct the Company to use the hourly
Mid-C price forecast from the 2021 IRP to determine the Excess Generation Price until an hourly
Mid-C forecast is approved in IPC-E-24-23.
Respectfully submitted this 171h day of July 2024.
Adam Triplett
Deputy Attorney General
Technical Staff: Michael Eldred
Michael Ott
1:\Utility\UMISC\COMMENTS\IPC-E-24-18 Comments.docx
STAFF COMMENTS 8 JULY 17, 2024

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS Iq�-AY OF JULY 2024,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. IPC-E-24-18, BY &MAILING A COPY THEREOF, TO THE FOLLOWING:
DONOVAN E WALKER TIM TATUM
IDAHO POWER COMPANY ALISON WILLIAMS
PO BOX 70 IDAHO POWER COMPANY
BOISE ID 83707-0070 PO BOX 70
E-MAIL: dwalkerAidahopower.com BOISE ID 83707-0070
dockets&idahopower.com E-MAIL: ttatumkidahopower.com
awilliams(kidahopower.com
ED JEWELL STEVEN HUBBLE
DEPUTY CITY ATTORNEY BOISE CITY DEP OF
BOISE CITY ATTORNEY'S PUBLIC WORKS
PO BOX 500 PO BOX 500
BOISE ID 83701-0500 BOISE ID 83701-0500
E-MAIL: eiewellgcityofboise.org E-MAIL: shubble&cityofboise.org
boisecityattorff&cityofboise.org
JIM SWIER AUSTIN RUESCHHOFF
MICRON TECHNOLOGY INC THORVALD A NELSON
8000 S FEDERAL WAY AUSTIN W JENSEN
BOISE ID 83707 HOLLAND & HART LLP
E-MAIL: [e-mail] 555 17TH ST STE 3200
DENVER CO 80202
E-MAIL: darueschhoff(a,hollandhart.com
tnel songholl andhart.com
awj ensen&holl andhart.com
acleekhollandhart.com
mamcmillenghollandhart.com
w—
PAT ICIA JORDAN, CRETARY
CERTIFICATE OF SERVICE