20141202IPC to Staff 3-4.pdf

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DONOVAN E. WALKER
Lead Gounsel
dwal ker@idahopower. com
December 2,2014
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
47 2 W est Wash i ngton Street
Boise, ldaho 83702
Re: Case No. IPC-E-14-35
American Falls Solar ll, LLC - ldaho Power Company's Response to the
Second Production Request of the Gommission Staff
Dear Ms. Jewell:
Enclosed for filing in the above matter are an original and three (3) copies of
ldaho Power Company's Response to the Second Production Request of the
Commission Staff.
Very truly yours,
DEW:csb
Enclosures
1221 W. ldaho St. (83702)
P.O. 8ox 70
Boise, lD 83707
-ovan E. Walker
DONOVAN E. WALKER (lSB No. 5921 ) fll C I i' 'i '',
Idaho Power Company
1221West ldaho Street (83702) ?illi lltl -2 I'i,i 12: 50
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalker@ idahopower.com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
rN THE MATTER OF THE APPLTCATTON )
oF IDAHO POWER COMPANY FOR ) CASE NO. rpC-E-14-35
APPROVAL OR REJECTTON OF AN )
ENERGY SALES AGREEMENT WITH ) IDAHO POWER COMPANY'S
AMERTCAN FALLS SOLAR il, LLC FOR ) RESPONSE TO THE SECOND
THE SALE AND PURCHASE OF ) PRODUCTION REQUEST OF THE
ELECTRIC ENERGY.) coMMtsstoN STAFF To |DAHO
) POWER COMPANY
)
COMES NOW, Idaho Power Company ("ldaho Powe/' or "Compohy"), and in
response to the Second Production Request of the Commission Staff to ldaho Power
Company dated November 20,2014, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 1
REQUEST NO. 3: ldaho Power's Application states under Paragraph 15 that
"[c]onsistent and material deviations from the hourly energy estimates in the generation
profile will be considered by ldaho Power to be a material breach of the agreement--
meaning that the entire pricing is fundamentally flawed as a result of an inaccurate
generation profile". Please discuss how consistent and material the deviations need to
be before the entire pricing can be considered fundamentally flawed, and before ldaho
Power would consider this to be a material breach of the agreement.
RESPONSE TO REQUEST NO. 3: A key input of the ldaho Public Utilities
Commission-approved avoided cost calculation (ldaho Power incremental cost
lntegrated Resource Plan methodology) for this Energy Sales Agreement ("Agreement")
is the hourly energy estimates provided by the project (Appendix I of the Agreement).
As described in paragraph 15 of the Application, the Agreement contains various price
adjustment mechanisms and material deviation clauses to provide a level of assurance
that the hourly energy shape provided by the project and the resulting avoided cost
calculation is an accurate estimate of the project's expected energy production.
Evaluation of material deviations will be on a case-by-case basis for each project.
Numerous factors wil! be considered in determining the impact of material deviations,
some of those factors being time, magnitude, and frequency of the deviations, as well
as whether the pricing adjustments within the Agreement are adequately addressing the
deviations, etc.
The response to this Request is sponsored by Randy C. Allphin, Energy Contract
Coordinator Leader, ldaho Power Company, in consultation with Donovan E. Walker,
Lead Counsel, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 2
REQUEST NO. 4: lf the entire pricing is considered fundamentally flawed, what
actions would ldaho Power take?
RESPONSE TO REQUEST NO. 4: ldaho Power would determine the most
appropriate action on a case-by-case basis and at the time the material breach
occurred. Please see the Company's response to Staffs Request No. 3 above. The
action taken wil! be intended to protect ldaho Power customers' interests and Idaho
Power will seek the ldaho Public Utilities Commission's approval of the action at the
time it is required. Some examples of actions that could be taken are termination of the
Agreement, recalculation of future contract year avoided cost payments, collection of
damages, etc.
The response to this Request is sponsored by Randy C. Allphin, Energy
Contracts Coordinator Leader, ldaho Power Company, in consultation with Donovan E.
Walker, Lead Counsel, ldaho Power Company.
DATED at Boise, Idaho, this 2nd day of December 2014.fi*-ta
DONOVAN E. WALKER
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMM]SSION STAFF TO IDAHO POWER COMPANY - 3
CERTIFICATE OF SERVICE
! HEREBY CERTIFY that on this 2nd day of December 20141 served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER
COMPANY upon the following named parties by the method indicated below, and
addressed to the following:
Commission Staff
Kristine A. Sasser
Deputy Attomey General
Idaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
American Falls Solar ll, LLC
Ron Williams
Williams Bradbury, P.C
1015 West Hays Street
Boise, ldaho 83702
Ben Fairbanks
Director, Development
First Wind
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IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 4
Christa Bearry, Legal