20241209Final_Order_No_36416.pdf

Office of the Secretary
Service Date
December 9,2024
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF COMMISSION ) CASE NO. GNR-E-24-01
STAFF'S APPLICATION TO UPDATE )
INPUTS TO THE SURROGATE AVOIDED ) ORDER NO. 36416
RESOURCE METHOD AVOIDED COST )
RATES )
On August 16, 2024, Staff of the Idaho Public Utilities Commission ("Staff') applied for
an order (1) updating Surrogate Avoided Resource Model ("SAR Model") inputs; (2) making
administrative changes to the SAR Model; and (3) approving SAR-based avoided cost rates
included with the Application. Staff requested this matter be processed via Modified Procedure.
On September 6, 2024, the Commission issued a Notice of Application, Notice of
Intervention Deadline, and Notice of Modified Procedure—establishing a deadline for interested
parties to intervene and setting deadlines for interested persons to comment and Staff to reply.
Order No. 36314. No parties petitioned to intervene. Avista Corporation dba Avista Utilities,
PacifiCorp dba Rocky Mountain Power, and Idaho Power Company (collectively the
"Companies") all indicated they agreed with Staff s proposals. Staff did not reply.
Having reviewed the record, the Commission now issues this Order approving the Staff s
Application.
THE APPLICATION
Staff seeks an order approving the use of different inputs to update the SAR Model than
the U.S. Energy Information Administration's ("EIA")Annual Energy Outlook,which previously
served as the basis for annual SAR Model updates. See Order No. 32697 (approving the use of the
EIA's Annual Energy Outlook to update the SAR Model). Staff asserts that it is necessary to use
different inputs to update the SAR Model because EIA did not publish an Annual Energy Outlook
in 2024. Staff proposes using"the average of AECO Hub prices, Stanfield Hub prices, Sumas Hub
prices, and Opal Hub prices from the December 2023 natural gas price forecast published by
Northwest Power and Conservation Council" ("NWPCC")to update the SAR Model until the EIA
forecast becomes available."Application at 2-3.
In support of its proposal, Staff notes that the Companies each receive gas from various
combinations of the hubs listed above.Additionally, Staff asserts that the NWPCC forecast is both
ORDER NO. 36416 1

publicly available and has a forecast time horizon of 20 years,which Staff asserts is sufficient for
20-year contracts that may come online in the next half decade. Furthermore, Staff states that its
proposed method for updating the SAR Model produced a forecast for 2022 substantially like that
generated by the EIA Annual Energy Outlook for 2022. The Application included a table listing
the national gas forecast for the 25 years following 2024.
Staff further proposes separating the SAR Model into three models—one for each of
Idaho's three largest electric utilities. According to Staff, this will avert multiple simultaneous
updates by different utilities to the single SAR Model, simplifying the update process. Staff
included models for each of the three major electric utilities in Idaho (i.e., an Avista SAR Model,
an Idaho Power SAR Model, and a Rocky Mountain Power SAR Model) and corresponding
avoided cost rates.
COMPANY COMMENTS
As stated, the Companies filed letters or comments agreeing with Staffs proposed
substitute inputs for the SAR Model and avoided cost rates.
COMMISSION DISCUSSION AND FINDINGS
The Commission has jurisdiction over this matter pursuant to the authority and power
granted it under Title 61 of the Idaho Code and the Public Utility Regulatory Policies Act of 1978
("PURPA"). The Commission has authority under PURPA and its implementing regulations to set
avoided costs, to establish standard published avoided cost rates, to order electric utilities to enter
fixed-term obligations for the purchase of energy from QFs, and to implement Federal Energy
Regulatory Commission ("FERC") regulations. The Commission is also empowered to resolve
complaints between QFs and utilities and approve QF contracts.
Under PURPA, utilities are required to purchase QF generation at a rate equal to the
utility's avoided cost. 18 C.F.R. § 292.304(b)(2). "Avoided costs" are the incremental costs to the
electric utility for power which,but for the purchase from the QF, such utility would generate itself
or purchase from another source. 18 C.F.R. § 292.101(b)(6). PURPA and FERC regulations direct
not only that rates for these purchases shall not discriminate against QFs,but also that avoided cost
rates be just and reasonable to the utility's ratepayers and in the public interest. 18 C.F.R. §
292.304(a)(1). Although FERC promulgated the general scheme and rules, it left the actual
implementation of PURPA to the state regulatory authorities. Rosebud Enterprises, Inc. v. Idaho
Public Utilities Commission, 128 Idaho 609, 614, 917 P.2d 766, 771 (1996). FERC regulations
ORDER NO. 36416 2

grant the states latitude in implementing the regulation of sales and purchases between QFs and
electric utilities. See Federal Energy Regulatory Commission v. Mississippi,456 U.S. 742 (1982).
In Order No. 32697, we approved the use of the EIA's Annual Energy Outlook to update
the SAR Model.As the EIA did not issue such an Annual Energy Outlook for 2024, it is necessary
to identify another method to update the SAR Model. Based upon the comments filed in this case,
particularly Staffs observation that its proposed update method (1) relies on Hub prices used by
Idaho's three major electric utilities; and(2) generated a similar forecast for 2022 when compared
to the EIA's Annual Energy Outlook, we find it reasonable to approve substitute inputs for
updating the SAR Model proposed in Staff s Application.
Furthermore, we find it reasonable to adopt Staff s proposal of separating the single SAR
Model into three separate models—one for each of the three large electric utilities in Idaho as Staff
proposed. Separating the SAR Model in this fashion will avoid the filing of multiple updates by
these three utilities, simplifying the update process. Similarly, as each of the three utilities
identified above agree that Staff accurately calculated their corresponding SAR Model avoided
cost rates using the inputs and method Staff proposed above, we find it reasonable to approve the
SAR-based avoided cost rates included in Staffs Application.
However, our approval of Staffs Application should not be interpreted as permanently
modifying the inputs and method for updating the SAR Model.Rather,this approval shall continue
only until the EIA publishes its next Annual Energy Outlook that can be used to update the SAR
Model. Additionally,we direct Staff to notify the Commission if the EIA does not issue an Annual
Energy Outlook within the next 12 months following the service date of this final order.
ORDER
IT IS HEREBY ORDERED that Staffs proposed substitute inputs and method for
updating the SAR Model are approved until the EIA publishes its next Annual Energy Outlook
following issuance of this Order.
IT IS FURTHER ORDERED that the SAR-based avoided cost rates included in Staffs
Application are approved.
IT IS FURTHER ORDERED that Staff shall notify the Commission if the EIA does not
publish an Annual Energy Outlook that can be used to update the SAR Model within the twelve
months immediately following issuance of this Order.
ORDER NO. 36416 3

THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date upon this Order regarding 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 9th day of
December 2024.
ERIC ANDERSON, PRESIDENT
R. HAMMOND JR., COMMISSIONER
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EDWARD LOD E1/COZV ISSIONER
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Commission Secre
I:\Legal\ELECTRIC\GNR-E-24-01_SAR\orders\GNRE2401_final_at.docx
ORDER NO. 36416 4