20190205IPC to Staff 1-14.pdf

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An IDACORP Company
DONOVAN E. WALKER
Lead Counsel
[e-mail]
February 5,2019
VIA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re Case No. IPC-E-19-01
J.R. Simplot Company - Pocatello Project
ldaho 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) copies
of ldaho Power Company's Response to the First Production Request of the
Commission Staff.
Very yours,7,lfu
Donovan E. Walker
DEW:csb
Enclosures
1221 W. ldaho St. (83702)
PO. Box 70
Boise, lD 83707
I
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@ id a hopower. com
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER FOR APPROVAL OR
REJECTION OF AN ENERGY SALES
AGREEMENT WITH J.R. SIMPLOT
COMPANY - POCATELLO
COGENERATION AND SMALL
PURCHASED POWER PROJECT
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Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. rPC-E-19-01
IDAHO POWER COMPANY'S
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
THE COMMISSION STAFF
COMES NOW, ldaho Power Company ("ldaho Power" or "Comp?[y"), and in
response to the First Production Request of the Commission Staff to ldaho Power
Company dated January 24,2019, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 1
REQUEST NO. 1: Page 3 of the Application states that "Under the terms of this
ESA, Simplot elected to contract with ldaho Power for a three-year term using the non-
levelized, non-seasonal hydro published avoided cost rates as currently established by
the Commission in Order No. 34062 dated May 16,2018, for replacement contracts and
for energy deliveries of less than 10aMW." Please confirm whether the term "non-
seasonal hydro" is correct. Please provide an explanation.
RESPONSE TO REQUEST NO. 1: The term "non-seasonal hydro" on page 3 of
the Application is not correct. The prices contained in the Energy Sales Agreement
("ESA') with J.R. Simplot Company ("Simplot") are the current non-levelized "other"
published avoided cost rates.
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 - 2
REQUEST NO. 2: Order No. 29632 requires a 48-hour minimum forced outage
requirement to discourage unreasonable numbers of forced outage declarations that
could result in a burdensome amount of accounting and contract administration
activities. Please confirm that parties agree to apply the 48-hour minimum requirement
to both forced outage and force majeure events even though the Commission order only
requires it to be applied to forced outages.
RESPONSE TO REQUEST NO. 2:As stated in the Application, Simplot asked
that the process for requesting a Seller Declared Suspension of Energy Deliveries be
modified regarding the types of events and the process of declaring a suspension of
delivery. Article 12.3 ol the ESA, Seller Declared Suspension of Energy Deliveries, has
been updated to include events of forced outage and force majeure.
However, Article 14 of the ESA provides further description specific to force
majeure and states, "lf either Party is rendered wholly or in part unable to perform its
obligations under this Agreement because of an event of Force Majeure, both Parties
shall be excused from whatever performance is affected by the event of Force Majeure
. . . .' Therefore, if an event of force majeure occurs, it would not be subject to a
duration of at least 48 hours.
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 - 3
REQUEST NO. 3: Page 5 of the Application states, "Simplot requested that the
notification of Net Energy Amount monthly adjustments described in paragraph 6.2.3 be
reduced from one-month advanced notice to five business days' notice prior to the
upcoming month...ldaho Power agrees that these are reasonable modifications that can
be accommodated with ldaho Power's operations." Please provide justification and
evidence to support why ldaho Power believes (1) it is a reasonable modification, and
(2) it can be accommodated with ldaho Power's operations.
RESPONSE TO REQUEST NO. 3: The primary purpose of receiving monthly
estimated Net Energy Amounts is to allow for the implementation of the 90/110
provisions found in current ESAs containing published avoided cost prices. The main
function of the 901110 provisions in the state of ldaho's implementation of the Public
Utility Regulatory Policies Act of 1978 ('PURPA) is to serve as a measure of firmness
that establishes a Qualifying Facility's ("QF") eligibility for "firm" avoided cost rates
determined at the time of contracting or legally enforceable obligation as opposed to
"non-firm" avoided cost rates established at the time of generation delivery.
Idaho Power's monthly Operating Plan and risk management process would not
change if the Net Energy Amount notification process is modified as contained in the
Simplot ESA, which would require that any changes to monthly Estimated Net Energy
Amounts be provided no later than the earlier of the 25th day in advance of the month
being changed or the last business day prior to the 25th day. ldaho Power would
continue to forecast generation deliveries from QFs in the same manner it has in the
past and would continue to have long-term projections of generation deliveries from
projects. The changes as contained in the Simplot ESA make no adjustments to the
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 4
way in which future monthly estimated Net Energy Amounts are carried forward to all
future months, unless changed by the QF according to the process described in the
ESA. ldaho Power's forecasting processes would continue to utilize various sources of
data and information in moving from a month-ahead forecast to day-ahead and real-
time operations. lf a QF can provide estimates of generation deliveries nearer to the
month of actual deliveries, it stands to reason that the estimated Net Energy Amount
may be more accurate than if it is providing it a month in advance. If a change to a QF's
monthly Net Energy Amount is significant, the "at least five days in advance"
requirement allows for the minimum amount of time to make any necessary changes to
I d a ho Power's nea r-te rm forecasts/ope ratio ns.
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.5
REQUEST NO. 4: Please describe and quantify the benefit that the Company
will lose by reducing notification of Net Energy Amount monthly adjustments from one-
month advanced notice to five-day advanced notice prior to the delivery month for the
Simplot project at issue in this case.
RESPONSE TO REQUEST NO. 4:Please see ldaho Power's response to the
Idaho Public Utilities Commission ("Commission") Staff's ("Staff') Request No. 3. The
Company does not anticipate losing any benefits associated with the change in the Net
Energy Amount notification process as contained in the ESA with Simplot but gaining
more up-to-date and accurate information and moving the estimates closer to a firm
scheduled delivery.
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.6
REQUEST NO. 5: Does ldaho Power believe it is reasonable and/or appropriate
to reduce notification of Net Energy Amount monthly adjustments from one-month
advanced notice to five-day advanced notice prior to the delivery month for all existinq
"other" category of PURPA projects when they renew their contracts? Please explain
why or why not.
RESPONSE TO REQUEST NO. 5: ldaho Power believes it is reasonable for an
ESA that contains 901110 provisions to allow changes to future estimated Net Energy
Amounts the earlier of the 25th day of the month in advance of the month being changed
or by the last business day before the 25th day.
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 - 7
REQUEST NO. 6: Does ldaho Power believe it is reasonable and/or appropriate
to reduce notification of Net Energy Amount monthly adjustments from one-month
advanced notice to five-day advanced notice prior to the delivery month for all new
"other" category of PURPA projects? Please explain why or why not.
RESPONSE TO REQUEST NO. 6: Please see ldaho Power's response to
Staffs Request No. 5.
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 - 8
REQUEST NO. 7: Does Idaho Power believe it is appropriate to reduce
notification of Net Energy Amount monthly adjustments from one-month advanced
notice to five-day advanced notice prior to the delivery month for all new seasonal
hydro, non-seasonal hydro, solar, and wind PURPA projects? Please explain why or
why not.
RESPONSE TO REQUEST NO. 7: Please see ldaho Power's response to
Staff's Request No. 5.
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 - 9
REQUEST NO. 8: Does ldaho Power believe it is appropriate to reduce
notification of Net Energy Amount monthly adjustments from one-month advanced
notice to five-day advanced notice prior to the delivery month for all existino seasonal
hydro, non-seasonal hydro, solar, and wind PURPA projects when they renew their
contracts? Please explain why or why not.
RESPONSE TO REQUEST NO. 8: Please see ldaho Power's response to
Staffs Request No. 5.
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 - 1O
REQUEST NO. 9: Please describe and quantify the benefits that the Company
will lose by reducing notification of Net Energy Amount monthly adjustments from one-
month advanced notice to five-day advanced notice prior to the delivery month for both
new contracts and existino contracts of all resource tvpes.
RESPONSE TO REQUEST NO. 9: Please see Idaho Power's response to
Staff's Request No.4.
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 - 11
REQUEST NO. 10: Does ldaho Power believe it should allow existi ng PURPA
contracts that are not up for renewa! to reduce notification of Net Energy Amount
monthly adjustments from one-month advanced notice to five-day advanced notice prior
to the delivery month, as it did in Case Nos. IPC-E-15-11, IPC-E-15-21, and
IPC-E-15-22? Please explain why or why not.
RESPONSE TO REQUEST NO. 10: Yes. Please see ldaho Power's response
to Staff's Request No. 5. It should also be noted that a change to an existing contract
would require a Commission-approved amended 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 - 12
REQUEST NO. 11: ln ldaho Power's view, what effect, if any, do the clauses
found in the Applications in Case Nos. IPC-E-17-14, IPC-E-18-04, and IPC-E-18-09
have on the need for a QF to request an amendment to the 90-1 10 provisions in the
QFs' contracts from ldaho Power? ln ldaho Power's view, would ldaho Power need to
file an amendment with the Commission in order to effectuate the five-day notice
provision in these contracts?
RESPONSE TO EQUEST NO. 11: Idaho Power believes that pursuant to the
descriptions of disagreement in the Applications relating to 90/110 provisions found in
the ESAs subject to the case numbers noted above, that if the Net Energy Amount
notification process in the ESA with Simplot is changed, then the QFs party to the ESAs
from Case Nos. IPC-E-17-14,|PC-E-18-04, and IPC-E-18-09 may request to enter into
amendments to change the Net Energy Amount notification process in a similar way,
which amendments would require Commission approval in order to have any force or
effect.
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 - 13
REQUEST NO. 12: ls ldaho Power aware of any other Applications that contain
similar language as referenced in the above Request No. 11?
RESPONSE TO REQUEST NO. 12: ldaho Power will be filing two applications
this week: one for Koyle Hydro lnc. ("Koyle Hydro") and one for Wood Hydro, LLC
("Wood Hydro") both of which are replacement ESAs for existing small hydro PURPA
QFs. Koyle Hydro's ESA contains the same provisions for changes to future estimated
Net Energy Amounts by the earlier of the 25th day the month in advance of the month
being changed or the last business day before the 25th day. Wood Hydro's ESA
contains the previously approved provisions providing for changes to future estimated
Net Energy Amounts a month in advance of the month being changed. Out of a desire
to expedite review of its replacement ESA, Wood Hydro chose not to include provisions
for Net Energy Amount changes by the 25th of the month but would like to change to
those provisions should the Commission approve of that change for other contracts.
This may require an amended contract, should that change be approved by the
Commission, and if Wood Hydro desires such provisions.
The response to this Request is sponsored by Michael Darrington, Energy
Contracts Leader, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 14
REQUEST NO. 13: The "Answer to lnterrogatory No. 2" of "ldaho Power
Company's Answers and Responses to J.R. Simplot's First lnterrogatories, Requests
for Admission, and Requests for Production to ldaho Power Company" in Case No.
IPC-E-18-07 describes how estimates of generation on a monthly basis are used in the
monthly Operating Plan, which is part of the Company's risk management process.
Please describe how reducing notification of Net Energy Amount monthly adjustments
from one-month advanced notice to five-day advanced notice prior to the delivery month
would affect the monthly Operating Plan and the risk management process in general.
RESPONSE TO REQUEST NO. 13: Please see ldaho Power's response to
Staff's Request No. 3.
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 - 15
REQUEST NO. 14: The "Response to Request for Admission No. 1" of "ldaho
Power Company's Answers and Responses to J.R. Simplot's First lnterrogatories,
Requests for Admission, and Requests for Production to Idaho Power Company" in
Case No. IPC-E-18-07 states that "there is an entire process of estimating generation
from the month-ahead through the day-ahead, and into real time required to serve load
and balance the system, for which a QF's monthly estimates are used." Please
describe the impacts of reducing notification of Net Energy Amount monthly
adjustments from one-month advanced notice to five-day advanced notice prior to the
delivery month on the month-ahead level, the day-ahead level, and the realtime level.
RESPONSE TO REQUEST NO. 14: Please see ldaho Power's response to
Staff's Request No. 3.
The response to this Request is sponsored by Michael Darrington, Energy
Contracts Leader, ldaho Power Company.
DATED at Boise, ldaho, this Sth day of February 2019.
DONOVAN E KER
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 16
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 5th day of February 2019 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
Idaho Public Utilities Commission
47 2 W est Wash ington Street (837 02)
P.O. Box 83720
Boise, ldaho 83720-0074
J.R. Simplot Company
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
General Counsel
Don Sturtevant
J.R. Simplot Company
P.O. Box27
Boise, ldaho 83707
X Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand DeliveredX U.S. Mail
_Overnight Mail
FAX
x Email iames.ald [e-mail]
don. stu rtevant@sim plot. com
Christa Bearry,
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 17