20240823Final_Order_No_36302.pdf

Office of the Secretary
Service Date
August 23,2024
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER ) CASE NO. IPC-E-24-18
COMPANY'S APPLICATION FOR )
APPROVAL OF A CLEAN ENERGY YOUR )
WAY CONSTRUCTION AGREEMENT ) ORDER NO. 36302
WITH THE CITY OF BOISE AND THE )
FIRST AMENDMENT THERETO )
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") 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 issuing prior to September 1, 2024.
On May 6, 2024, the Commission issued a Notice of Application and Notice of
Intervention Deadline, setting a deadline for interested persons to intervene. Order No. 36170. The
City of Boise ("City") and Micron Technology, Inc. ("Micron") intervened. Order No. 36213.
On June 12,2024,the Commission issued a Notice of Modified Procedure, establishing
public comment and party reply deadlines. Order No. 36225. The Commission Staff("Staff'), the
City, and Micron filed comments recommending approval of the Application. The Company did
not file reply comments.
Having reviewed the record, the Commission issues this Order approving the
Agreement and Amendment with one correction described below.
THE APPLICATION
The Company seeks approval of the Agreement authorizing the City to buy up to 10
megawatts ("MW") from the Power Purchase Agreement between the Company and Black Mesa
Energy, LLC ("PPA"). The Company also seeks approval of the Amendment, which adds
definitions for the terms "Project Output" and "Supplemental Energy" and modifies Exhibit 1 to
the Agreement to include clarifying language that ensures rate changes occur in separate
proceedings. If both the Agreement and Amendment (collectively "Amended Agreement") are
approved, the Amended Agreement will take effect on September 1, 2024.
ORDER NO. 36302 1

STAFF COMMENTS
After reviewing the Application and Amended Agreement, Staff believed the Amended
Agreement is reasonable, consistent with other CEYW agreements,and protects the Company and
its customers from liability. Accordingly, Staff recommended approval of the Amended
Agreement with a correction to Table 1 of the First Revised Exhibit 1 described more thoroughly
below.
1. Compliance with Schedule 62
Schedule 19 and Special Contract customers can purchase power from Renewable
Energy Facilities ("REFs"), like the Black Mesa facility ("Black Mesa") involved in this case,
under Schedule 62's, Clean Energy Your Way — Construction option. Staff noted that, despite
having multiple accounts with the Company, the Application discusses only the City's Schedule
19 accounts for the Boise Airport and Lander Street Water Renewable Facility (collectively
"service points"). Staff indicated that these are appropriate locations for a CEYW Construction
agreement.
Additionally, Schedule 62 limits the size of an REF to 110 percent of the annual energy
consumption of the location serviced. After reviewing the forecasted consumption for the service
points identified above through 2033, Staff determined that the City's share of Black Mesa's
generation does not exceed 110 percent of the combined consumption of the service points during
the forecast period.
Staff also reviewed the treatment of"Net Consumption"1 and "Excess Generation"2
under the Amended Agreement. When the service points consume more energy than the City's
share of Black Mesa's generation,the City will pay standard Schedule 19 rates. Excess Generation
will be credited to the City at the rate stated in the Renewable Energy Construction Agreement.
Staff believes the above-described rates comply with Schedule 62.
2. Consistency with Other CEYW Agreements
Staff compared certain provisions of the Amended Agreement with other approved
CEYW agreements and believed the Amended Agreement is consistent with the other CEYW
agreements analyzed.3 Staff particularly noted that the Excess Generation Price contained in the
'Net Consumption is the customer-metered kWh usage minus the line loss-adjusted energy delivered from the REF
to the Company's system.
2 Excess Generation refers to the City's share of Black Mesa's generation exceeding that required by the service points.
3 Staff s comments contain Table No. 1,which summarizes this analysis.
ORDER NO. 36302 2

Amended Agreement matches that contained in the Company's CEYW agreements with Micron
and Brisbie, LLC.
3. Pricing and Billing Terms
Staff believed the pricing and billing terms in the Amended Agreement are reasonable
as they are consistent with other CEYW agreements and protect other retail customers from cost
shifting. Staff observed that, in addition to being charged standard Schedule 19 rates for service
not provided by Black Mesa's output, the City will pay a fixed cost charge for each kWh received
from Black Mesa. This fixed cost charge will assist in the full recovery of capacity-related costs
embedded in volumetric rates under Schedule 19.
Staff also believed the provisions of the Amended Agreement that govern REF cost
and capacity credit are reasonable because they are consistent with other CEYW agreements.
However, Staff noted an error in the calculated Renewable Capacity Contribution value in Table
I of the First Revised Exhibit 1. In response to discovery requests, the Company indicated that it
would correct the error by executing Revised Exhibit 1 with the City after issuance of a final order
in this case. Staff recommended the Company submit an updated Table 1 of the First Revised
Exhibit 1 as a compliance filing.
Similarly, Staff believed the method for setting the Excess Generation Price under the
Amended Agreement is reasonable as it is identical to that used in other CEYW agreements.
However, Staff noted that the Company proposes paying the City the Mid-C market forecast prices
contained in the Company's 2023 Integrated Resource Plan ("IRP") for any Excess Generation.
Until review of the 2023 IRP Mid-C forecast is completed in Case No. IPC-E-24-23, Staff
recommended the Company use the Mid-C price forecast from the Company's 2021 IRP until an
hourly Mid-C forecast receives Commission approval in Case No. IPC-E-24-23. Staff believed
this would result in the Company using the 2021 Mid-C price forecast for only a few months.
4. Impact on Other Customers
Staff reviewed the Company's no-harm analysis and believes it is reasonable and
demonstrated that the Amended Agreement will not harm other customers. However, Staff raised
two concerns with the Company's no-harm analysis. First, Staff believed Tables 1 and 2 in
Schedule 26 need revisions so that they reflect Micron's new allocation of Black Mesa. According
to Staff,the Company intends to submit a modified Schedule 26 via a compliance filing following
a final Commission order in this case. Staff recommended the Company do so.
ORDER NO. 36302 3

Second, Staff expressed a continuing concern that CEYW Construction customers are
treating system-generated Renewable Energy Credits ("RECs") in a manner that will impact other
customers via the Power Cost Adjustment ("PCA"). The Commission's prior approval of Black
Mesa and relatively small size of the project mitigated this concern in connection with the
Amended Agreement. However, Staff indicated that it intends to evaluate CEYW customers'
treatment of system-generated RECs in the PCA as new CEYW Construction agreements and
projects are established.
THE CITY AND MICRON'S COMMENTS
The City and Micron both filed comments that recommended approval of the Amended
Agreement as filed.
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 Amended Agreement contingent upon the Company taking the steps described below.
The City intends to use the generation purchased under the Amended Agreement at service points
that comply with the requirements of Schedule 62. Additionally, pricing mechanisms and other
crucial provisions of the Amended Agreement are consistent with other approved CEYW
agreements. For example, the method for calculating the Excess Generation Price under the
Amended Agreement corresponds with that contained in the Company's CEYW agreements with
Micron and Brisbie, LLC.
However, the method for calculating the Excess Generation Price under the Amended
Agreement uses the hourly Mid-C forecast. Rather than using the Mid-C forecast from the 2023
IRP, which is currently under review in Case No. IPC-E-23-24, we find it reasonable to direct the
Company to use the Mid-C forecast from its 2021 IRP. Once review of the Mid-C forecast in the
Company's 2023 Mid-C forecast is complete, the Company shall use that more recent forecast to
calculate the Excess Generation Price under the Amended Agreement.
ORDER NO. 36302 4

We also find it reasonable to direct the Company to correct the error Staff noted in the
calculated Renewable Capacity Contribution value in Table 1 of the First Revised Exhibit 1. Once
the Company has executed a Revised Exhibit 1 with the City,the Company shall submit a copy of
the document as a compliance filing.
Additionally, once the Amended Agreement becomes effective, Micron's allocation of
Black Mesa will change. Tables 1 and 2 to the Company's Schedule 26 contain Micron's current
allocation of Black Mesa. It is important that the Company's approved tariffs filed with the
Commission remain complete and accurate once the Amended Agreement becomes effective.
Accordingly,we find it reasonable to direct the Company to submit as a compliance filing a revised
Schedule 26 that updates Tables 1 and 2 to reflect Micron's new allocation of Black Mesa.
Furthermore, we share Staff s concern regarding the treatment of system-generated
RECs. Although the prior approval of the Black Mesa project and the relatively small allocation
of its generation involved in the Amended Agreement mitigates our concern in this case, the
treatment of system-generated RECs in relation to CEYW agreements involving larger REFS could
adversely affect other customers via the Company's PCA. Consequently,we expect the Company
to cooperate with Staff to investigate this issue in future cases involving CEYW agreements.
ORDER
IT IS HEREBY ORDERED that the Amended Agreement is approved contingent upon
the correction of the error Staff noted in Table 1 of the First Revised Exhibit 1.
IT IS FURTHER ORDERED that the Company shall submit as a compliance filing (1)
a copy of the Revised Exhibit 1 executed with the City; and(2)a revised Schedule 26 with updated
Tables 1 and 2 that reflects Micron's allocation of Black Mesa after the effective date of the
Amended Agreement.
IT IS FURTHER ORDERED that the Company shall use the hourly Mid-C price
forecast from its 2021 IRP to determine the Excess Generation Price under the Amended
Agreement until the Mid-C price forecast from the Company's 2023 IRP is approved in Case No.
IPC-E-24-23.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (2 1) 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.
ORDER NO. 36302 5

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 23rd day
of August 2024.
ERIC ANDERSON, PRESIDENT
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JO R. HAMMOND JR., COMMISSIONER
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EDWARD LODGE, COM SSIONER
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ORDER NO. 36302 6