20181017IPC to Staff 1-2.pdf

RECEIVED S!ffi*.
An IDACORP Company
SiltB il[T I ? [H ll: 28
DONOVAN E. WALKER
Lead Counsel
[e-mail]
October 17 ,2018
VIA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-18-12
McCollum Enterprises, Limited Partnership - Canyon Springs Hydro Project
Idaho Power Company's Response to the First Production Request of the
Commission Staff
Dear Ms. Hanian
Enclosed for filing in the above matter please find an original and three (3) copiesof ldaho Power Company's Response to the First Production Request of the
Commission Staff.
truly yours,
Donovan E. Walker
DEW:csb
Enclosures
1221 W. ldaho st. (83702)
PO. Box 70
Boise, lD 83707
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalker@ idahopower. com
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Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT WITH
MCCOLLUM ENTERPRISES, LIMITED
PARTNERSHIP, FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY
FROM THE CANYON SPRINGS HYDRO
PROJECT
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CASE NO. IPC-E-18.12
IDAHO POWER COMPANY'S
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
THE COMMISSION STAFF
COMES NOW, ldaho Power Company ("ldaho Power" or "Company"), and in
response to the First Production Request of the Commission Staff to ldaho Power
Company dated September 27,2018, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 1
REQUEST NO. 1: ls ldaho Power including the Canyon Springs Hydro project's
contribution of capacity to meet current capacity needs in its lntegrated Resource Plan
load resource balance?
RESPONSE TO REQUEST NO. 1: Yes, generation from the Canyon Springs
hydro project, pursuant to the existing Schedule 86 Uniform Agreement between ldaho
Power Company and McCollum Enterprises, Limited Partnership, is included in ldaho
Power's cogeneration and small power production ("CSPP') forecast and is therefore
included in the load and resource balance contained in ldaho Power's 2017 lntegrated
Resource Plan ("lRP"). Because all Public Utility Regulatory Policies Act of 1978
("PURPA") Qualifying Facilities ("QF") provide generation to the purchasing utility on an
if, as, and when available basis, ldaho Power includes each QF that has a signed
Energy Sales Agreement ("ESA') in its CSPP forecast, which is an input to ldaho
Power's load and resource balance determination.
Regarding the implementation of replacement contracts for existing QFs, the
ldaho Public Utilities Commission's ("Commission") orders make several references to
the way QF generation and payment for capacity should be managed upon the
expiration of an existing ESA. ln Case No. GNR-E-11-03, the Commission states:
It is logical that, if a QF project is being paid for capacity at
the end of the contract term and the parties are seeking
renewal/extension of the contract, the renewa!/extension
would include immediate payment of capacity. An existing
QF's capacity would have already been included in the
utility's load and resource balance and could not be
considered surplus power. Therefore, we find it reasonable
to allow QFs entering into contract extensions or renewals to
be paid capacity for the full term of the extension or renewal.
Order No.32697 at21,22
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 2
Order No. 32737 in the same case states:
However, when an existing QF under a current contract
desires to continue to sell energy to the same utility after
expiration of the current contract, and the parties enter into a
new contract for the sale and purchase of energy, the QF is
entitled to be paid capacity for the full term of the new
agreement.
Order No. 32737 at 5.
The issue of when capacity payments are included in the avoided cost
calculation for QFs was further discussed by the Commission in Case No. IPC-E-15-01 ,
where it states:
Therefore, we find it reasonable for utilities to establish
capacity deficiency at the time the initial IRP-based contract
is signed. As long as the QF renews its contract and
continuously sells power to the utility, the QF is entitled to
capacity based on the capacity deficiency date established
at the time of its initial contract. For example, if the QF
comes on-line in 2017 and the utility [becomes] capacity
deficient in 2020, the QF would be eligible for capacity
payments in the second year of its second contract [(i.e.,
2020)l and thereafter if in continuous operation. This
adjustment recognizes that in ensuing contract periods, the
QF is considered part of the utility's resource stack and will
be contributing to reducing the utility's need for capacity.
Order No. 33357at25,26
The Commission went on to state in its reconsideration order in Case No. IPC-E-15-01
When a QF enters into its initial contracUobligation with the
utility, the capacity adjustment entitles the QF to know the
exact date when it wi!! be eligible to receive capacity
payments as long as the QF continues to contribute to the
utility resource stack. Thus, the Commission created the
adjustment in conjunction with the standard two-year termfor !RP-based contracts to prevent utilities from
circumventing their obligations to pay for capacity when the
utility becomes capacity deficient.
Order No. 33419 at26
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 3
It is ldaho Power's understanding that the Commission's orders intend that QF
projects which have been included in ldaho Power's load and resource balance since
their initial contract date are to be paid for capacity in their replacement contract
according to the Company's capacity deficit in place at the time of the QFs' initial
contracts. For Canyon Springs hydro, which was previously under an as-delivered
Schedule 86 QF agreement and included in the load and resource balance in the same
manner as all other QFs with signed contracts, it receives payment for capacity for the
entire term of the replacement contract.
The response to this Request is sponsored by Michael Darrington, Energy
Contracts Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 4
REQUEST l{QJ: Please confirm or deny that as a Schedule 86 QF, Canyon
Springs Hydro does not receive a capacity payment above the market price.
RESPONSE TO REQUEST NO. 2: Under its existin g Schedule 86 Uniform
Agreement between ldaho Power Company and McCollum Enterprises, Limited
Partnership, the Canyon Springs hydro project receives full compensation pursuant to
the Commission's approved avoided cost price defined in Schedule 86 for all deliveries
of generation that occur on a non-firm if, as, and when available basis. No PURPA QF
project under contract with ldaho Power receives additional payment above the
approved avoided cost rate.
The response to this Request is sponsored by Michael Darrington, Energy
Contracts Leader, ldaho Power Company.
DATED at Boise, ldaho, this 17th day of October 2018.
E
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF.5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 17th day of October 2018 I served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF upon the following named
parties by the method indicated below, and addressed to the following:
Commission Staff
Edward Jewell
Deputy Attorney General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
X Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
McCo!!um Enterprises, Limited Partnership
W. David McCollum
McCollum Enterprises, Limited Partnership
Canyon Springs Hydro
P.O. Box 5492
Twin Falls, ldaho 83303
_x
E
Hand Delivered
U.S. Mail
Overnight Mail
FAX
Email [e-mail]
Joseph D. McCollum, Jr.
1110 Warm Springs Avenue
Boise, ldaho 837 12-7949
x
Hand Delivered
U.S. Mail
Overnight Mail
FAX
Email
\,f
Christa Bearry, Lega
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 6