20240805Final_Order_No_36282.pdf

Office of the Secretary
Service Date
August 5,2024
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA ) CASE NO. AVU-E-24-06
CORPORATION AND FORD HYDRO )
LIMITED PARTNERSHIP'S JOINT ) ORDER NO. 36282
PETITION FOR APPROVAL OF A POWER )
PURCHASE AGREEMENT )
On May 16, 2024,Avista Corporation d/b/a Avista Utilities ("Company") and Ford Hydro
Limited Partnership ("Seller") (collectively, "Parties") submitted a joint petition to the Idaho
Public Utilities Commission ("Commission") for approval of a Power Purchase Agreement
("PPA")that would authorize the sale of energy from Seller's hydroelectric facility("Facility")to
the Company ("Petition"). The proposed PPA was filed concurrently with the Petition as
Attachment A.
On June 20, 2024, the Commission issued a Notice of Petition and established public
comment and Party reply deadlines. Order No. 36234. Commission Staff("Staff') filed comments
to which the Parties did not respond.
With this Order, we approve the proposed PPA subject to a compliance filing as discussed
below.
THE PETITION
The Parties intend the proposed PPA to replace the current PPA which expired on June 30,
2024. The proposed PPA would expire on June 30, 2026.
The Parties stated that the proposed PPA largely parallels the existing PPA but has been
updated to reflect or clarify language regarding Commission mandates related to the 90/110 Rule,
the PPA's provisions regarding the modifications to the Facility, and the necessity of obtaining
Commission approval for amending the PPA.
STAFF COMMENTS
Staff recommended approval of the Parties' proposed PPA subject to a compliance filing
for the items discussed below.
ORDER NO. 36282 1

The PPA's Fourth Recital and the Rolling Window of Delivered Net Output Estimates
The proposed PPA's fourth recital mistakenly states that the current PPA's expiration date
is June 29, 2024, instead of June 30, 2024. Likewise, the Company stated during discovery that it
desired to adopt a three-month rolling window of Delivered Net Output estimates whereas the PPA
mistakenly stated it would have a six-month rolling window. Staff recommended that these errors
be corrected.
Renewable Energy Credits and Technology Type
The PPA stated that, to the full extent allowed by applicable laws or regulations, the
Company shall own 50% of the Environmental Attributes associated with the Net Delivered
Output. During discovery the Company further clarified that 100% of the Renewable Energy
Credits will go to the relevant qualifying facility in accordance with Commission Order No. 32802.
Staff also recommended that the PPA specify that the Facility is a non-seasonal hydro project to
ensure that it does not get mistakenly identified as a seasonal hydro project.
Section 10.6 (Modifications), Eli_ibility for Capacity Payments, and the 90/110 Rule
Staff recommended that Section 10.6 of the PPA cite Section 22 of the PPA (rather than
mistakenly citing Section 21) regarding modifications to the Facility. Relatedly, Staff
recommended that, regardless of the actual compensation paid to the Facility after modification,
the Company should only be allowed to recover (through the Power Cost Adjustment ("PCA"))
the net power supply expenses reflecting the authorized rate for energy delivered as of the first
operation date of the modified Facility.
Staff also reviewed the Commission's standards for receiving capacity payments and
recommended that the Company be granted capacity payments as part of the renewal of the PPA.
Staff stated that the Facility has a 1.8-megawatt nameplate capacity. Staff explained that,while the
Facility will operate past the operation date of the previous contract,this should not affect capacity
payments—since the Facility will not generate energy until December due to a lack of water flow.
Staff also discussed the 90/110 Rule and recommended that the PPA adopt it and the associated
five-day advanced notice relative to the Seller potentially adjusting its Delivered Net Output
Estimates.
ORDER NO. 36282 2

Avoided Cost Rates
Staff noted a mistake in Section 6.1 and recommended that the phrase"not Surplus Energy"
should be replaced with "not Surplus Energy or Shortfall Energy." Staff also believed that the
PPA's usage of the term "Effective Date" indicates July 1, 2024. Staff argued that the term
"Effective Date" should be replaced with the proper date of May 15, 2024. Staff stated that this
date should be used as this is the date that the Company established Legally Enforceable
Obligations and when avoided cost rates were locked in. Lastly, Staff noted that Exhibit E cites
Section 11.1—which does not exist. Staff believed that Exhibit E should have referenced Section
6.1. Staff recommended that these items be corrected.
Lapsed Contract Period
Staff echoed the Commission's concerns from previous cases regarding late filed renewal
contracts (this case was filed approximately 46 days before the requested effective date). Despite
the Company's late filing, Staff recommended that the Commission order a retroactive effective
date in this case of July 1, 2024. Staff noted that this way the Parties could use the avoided cost
rates in the approved contract and implement the necessary provisions related to the avoided cost
rates during the period between July 1, 2024, and the publication of the Final Order in this case.
Staff also cited other cases where a retroactive effective date was ordered by the Commission.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter under Idaho Code §§ 61-502 and 61-
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 law, and to fix the same by order. Idaho Code
§§ 61-502 and 61-503. The Commission also has authority under the Public Utility Regulatory
Policies Act of 1978 ("PURPA") and Federal Energy Regulatory Commission ("FERC")
regulations to set avoided cost rates, to order electric utilities to enter fixed-term obligations for
the purchase of energy from qualify facilities, and to implement FERC rules. The Commission
may enter any final order consistent with its authority under Title 61 and PURPA.
Having reviewed the record in this case, the Commission finds it reasonable and in the
public interest to approve the Company's request subject to a compliance filing correcting the
issues described in Staff s comments. The Commission notes that Staff s comments recommended
ORDER NO. 36282 3

that several typographical and other errors be corrected. The Company did not file any comments
to contest these recommendations. Accordingly, the Commission finds it reasonable to order the
Company to fix these issues identified by Staff and submit a compliance filing within 30 days of
issuance of this Order.
The Commission also orders that, if the Facility is modified, only the net power supply
expense that reflects the proper authorized rate for all energy delivered as of the first operation
date of the modified Facility be included in the Company's PCA, regardless of the compensation
paid to the modified Facility. This treatment is consistent with the Commission direction in Order
No. 35705.
Subject to the Company meeting the requirements of this Order, the Commission orders
that the PPA will have an effective date of July 1, 2024, and that all payments for purchases of
energy under the PPA be allowed as prudently incurred expenses for ratemaking purposes.
ORDER
IT IS HEREBY ORDERED that the Company's proposed PPA is approved subject to a
compliance filing correcting the typographical and other errors identified by Staff. This filing must
be submitted to the Commission within 30 days of the publication of this Order. Once these errors
have been corrected,the PPA shall be approved effective July 1,2024,and all payments for energy
and capacity shall be prudent for ratemaking purposes.
IT IS FURTHER ORDERED that, if the Facility is modified, only the net power supply
expense reflecting the authorized rate for all energy delivered as of the first operation date of the
modified Facility shall be included in the Company's PCA.
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.Idaho Code § 61-626.
ORDER NO. 36282 4

DONE by order of the Idaho Public Utilities Commission at Boise, Idaho this 5th day of
August 2024.
ERIC ANDERSON, PRESIDENT
J R. HAMMOND JR., COMMISSIONER
EDWARD LODGE, COMMISSIONER
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IALega1\ELECTRIC\AVU-E-24-06_Ford Hydro\orders\AVUE2406_Final_md.docx
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