20230223IPC to Staff 21-26(Redacted).pdf

DONOVAN WALKER
Lead Counsel
[e-mail]

February 23, 2023

VIA ELECTRONIC FILING

Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, Idaho 83720-0074

Re: Case No. IPC-E-22-29
In the Matter of Idaho Power Company’s Application for Approval of a Power
Purchase Agreement with Pleasant Valley Solar, LLC

Dear Ms. Noriyuki:

Attached for electronic filing please find the redacted version of Idaho Power
Company’s Confidential Responses to the Second Production Request of the Commission
Staff in the above matter.

Please feel free to contact me directly with any questions you might have about this
filing.

Very truly yours,

Donovan E. Walker
DEW:cd
Enclosures
RECEIVED
2023 February 23, 4:11PM
IDAHO PUBLIC
UTILITIES COMMISSION

IDAHO POWER COMPANY’S CONFIDENTIAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF - 1
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]

Attorney for Idaho Power Company

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR
APPROVAL OF A POWER PURCHASE
AGREEMENT WITH PLEASANT VALLEY
SOLAR, LLC.
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CASE NO. IPC-E-22-29

IDAHO POWER COMPANY’S
CONFIDENTIAL RESPONSE TO
THE SECOND PRODUCTION
REQUEST OF THE
COMMISSION STAFF

COMES NOW, Idaho Power Company (“Idaho Power” or “Company”), and in
response to the Confidential Second Production Request of the Commission Staff
(“IPUC or Commission”) dated February 13, 2023, herewith submits the following
information:

IDAHO POWER COMPANY’S CONFIDENTIAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF - 2
REQUEST FOR PRODUCTION NO. 21: Please respond to the following
questions regarding the Excel File in Confidential Response to Staffs Production Request
No. 4:

RESPONSE TO REQUEST FOR PRODUCTION NO. 21:

a. Setting the net present value discount period back to the date when the Parent
Guaranty was signed instead of the Scheduled Commercial Operation Date
would result in a timing mismatch between when potential costs are incurred
versus the value of the guaranty for those potential costs. The Company did
not receive a cash payment when the Parent Guaranty was signed, only a
guaranty from Brisbie LLC’s parent company, Meta Platforms, Inc., to guaranty
future payment should Brisbie LLC no longer remain the ultimate off taker for
Pleasant Valley Solar’s output. There is no opportunity for the Company to
invest the value of the Parent Guaranty between signature date and Scheduled
Commercial Operation Date to account for the time value of money during this
period.

IDAHO POWER COMPANY’S CONFIDENTIAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF - 3
b. The Parent Guaranty is defined as the amount that is the greater of: (a)

of the Renewable Resource PPA nameplate
capacity. In the case of the parent guaranty for Pleasant Valley Solar, the
greater amount was concluded to be part (b). of nameplate is the
amount of security, traditionally development security, that Idaho Power
typically includes in its renewable PPAs as a reasonably sufficient amount to
secure potential damages if the project is not constructed, or a reasonable
liquidated damage amount representing the value of the PPA should something
catastrophic happen to the entire PPA. (Please see the Company’s Response
to Request No. 25 below). It would be difficult, if not impossible, to predict with
certainty if something were to happen with Brisbie’s offtake of Pleasant Valley
Solar energy whether energy delivered from that PPA would be sold into the
market or used to meet the Company’s system load, or if transmission would
be required or not. As noted in Staff’s production request, the terms of the
Parent Guaranty are defined in the Brisbie LLC Energy Service Agreement
(“ESA”). While the calculated amount of the Parent Guaranty incorporates both
the guaranty definition from the Brisbie ESA and the values from the Pleasant
Valley Solar PPA, it is important to recognize that considerations regarding
Parent Guaranty definitions would be part of the ESA in Case No. IPC-E-21-
42, and not the PPA in Case No. IPC-E-22-29.
c. The Company did not evaluate the potential transmission cost associated with
the PPA energy. As stated above and in Response to Request No. 25 below,

IDAHO POWER COMPANY’S CONFIDENTIAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF - 4
it may or may not be the case that there would be transmission costs, and these
amounts were negotiated provisions related to establishing liquidated damages
for various items related to the contracts applied in situations where actual
damages are difficult or impossible to predict with certainty, and the parties
agree to an approximation as being reasonable in the circumstances.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, Idaho Power Company.

IDAHO POWER COMPANY’S CONFIDENTIAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF - 5
REQUEST FOR PRODUCTION NO. 22: Section 6.1.1 describes Test Energy and
Net Output before Commercial Operation Date. What is the difference between Test
Energy and Net Output for the period before Commercial Operation Date?
RESPONSE TO REQUEST FOR PRODUCTION NO. 22: There is no difference.
Test Energy is defined as “any Net Output during periods prior to the Commercial
Operation Date and related Capacity Rights.” Section 1.148.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning and Coordination Manager, Idaho Power Company.

IDAHO POWER COMPANY’S CONFIDENTIAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF - 6
REQUEST FOR PRODUCTION NO. 23: Brisbie forecasts commencing
operations in . The Pleasant Valley project is expected to deliver
Test Energy before the Commercial Operation Date. Please
respond to the following.
a. Please describe the rates Brisbie will be charged (1) before Test Energy is
delivered and (2) after Test Energy is delivered but before the Commercial
Operation Date and the locations of such descriptions in the PPA and/or the
Special Contract. For Point (2), please answer the question in two scenarios: when
Test Energy is greater than Brisbie's load, resulting in excessive energy, and when
Test Energy is lower than Brisbie's load, with no excessive energy.
b. The Test Energy will be paid at . Please explain
whether this payment from Idaho Power to Pleasant Valley will be
just like how
. If not, please explain why not.
RESPONSE TO REQUEST FOR PRODUCTION NO. 23:
a. Brisbie LLC’s Energy Service Agreement (“ESA”) defines when Schedule 33
first applies as follows: “the earlier of 1) the first day of the month in the first
month that the aggregate power requirement at the Customer Interconnection
Facilities at the Brisbie LLC Data Facility exceeds 20,000 kW, or 2) upon
commencement of Metered Output by a Project.”
(1) Prior to Test Energy being delivered to Idaho Power’s system, if the Brisbie
LLC Data Facility is less than 20,000 kW in aggregate power requirement,
Brisbie will be assessed rates at the then applicable tariff rate, likely to be

IDAHO POWER COMPANY’S CONFIDENTIAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF - 7
Schedule 19 – Transmission, and should Brisbie LLC exceed 20,000 kW in
aggregate power requirement, the then current Schedule 33 rates would
apply, with Block 1 rates in Schedule 33 defined to be the then current
Schedule 19 – Transmission tariff rates.
(2) At the time Test Energy is delivered to Idaho Power’s system, but prior to
Pleasant Valley Solar’s Commercial Operation date, Idaho Power will
purchase Test Energy from Pleasant Valley Solar, which falls under the
second part of the Schedule 33 applicability definition, “2) upon
commencement of Metered Output by a Project.” Metered Output is defined
in the ESA as: “for each Project, the electrical output and capacity of the
Project delivered to, or generated by, Idaho Power by the applicable
Renewable Resource,” and Project “means a new Renewable Resource or
the independently metered portions thereof, the Project Output of which is
either: (1) purchased [emphasis added] as a simultaneously bundled
product by Idaho Power under a Renewable Resource PPA; or (2) provided
as a simultaneously bundled product by Idaho Power from an Idaho Power
owned resource.”
Hourly energy matching to Brisbie’s load will be completed for any amount
of Test Energy delivered to Idaho Power and Schedule 33 outlines the rates
and credits to be provided for portions of Brisbie load met by Idaho Power
and the renewable resource PPA, including the value of excess energy.
Idaho Power notes the Commission has not issued an order in the Brisbie
ESA case, with elements of the Schedule 33 renewable resource PPA

IDAHO POWER COMPANY’S CONFIDENTIAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF - 8
crediting components awaiting Commission decision with respect to what
Idaho Power proposed versus PUC Staff recommendations for credit value
determination. Should Test Energy exceed Brisbie load in any hour, excess
energy would be credited to Brisbie at the Commission-approved rates.
b. Yes, Test Energy purchased by Idaho Power from Pleasant Valley Solar will be
a pass-through charge from Idaho Power to Brisbie LLC at the rate Idaho
Power pays Pleasant Valley Solar.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, Idaho Power Company.

IDAHO POWER COMPANY’S CONFIDENTIAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF - 9
REQUEST FOR PRODUCTION NO. 24: Section 7.12.1 uses the difference
between of the Expected Energy of the Facility for such month and any quantities of
Output constituting Seller Uncontrollable Minutes to determine the Net Output capable of
being delivered. Please explain why is used, instead of .
RESPONSE TO REQUEST FOR PRODUCTION NO. 24: is used
because the Output Guarantee is , not . 7.12 is the Output
Guarantee section of the PPA.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning and Coordination Manager, Idaho Power Company.

IDAHO POWER COMPANY’S CONFIDENTIAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF - 10
REQUEST FOR PRODUCTION NO. 25:

. Please confirm that, under
Section 7.12.2.3, when the Seller does not meet the Output Guarantee, Idaho Power (and
therefore ratepayers) will have to pay for the transmission to move replacement energy
to the Point of Delivery instead of the Seller.
RESPONSE TO REQUEST FOR PRODUCTION NO. 25: The liquidated damages
referred to in 7.12.2.3 are applied if the
as calculated pursuant
to the provisions of Section 7.12. The liquidated damages are based on Idaho Power’s
cost to cover which itself is based on the difference between market price and contract
price, plus the cost of Green Tags, not received with the generation. It is an amount that
is applied as liquidated damages without regard to what actual damages may or may not
be. It may or may not be the case, as the question presumes, that there would be
transmission costs. In many instances, a true “cover” or replacement power would be
unlikely to be delivered to the Project’s Point of Delivery. Liquidated damages are applied
in situations where actual damages are difficult or impossible to predict with certainty, and
the parties agree to an approximation as being reasonable in the circumstances. The
difficulties in predicting if, when, how, and to what extent there may be an Output Shortfall
below the Output Guarantee, and if so, if, when, how, and to what extent Idaho Power
may be covering the lost generation or applying replacement power, make liquidated
damages appropriate, and the estimation based upon the difference between market and
contract price, including Green Tags, is a typical, industry standard kind of liquidated

IDAHO POWER COMPANY’S CONFIDENTIAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF - 11
damage calculation for this circumstance.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning and Coordination Manager, Idaho Power Company.

IDAHO POWER COMPANY’S CONFIDENTIAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF - 12
REQUEST FOR PRODUCTION NO. 26: The Green Tags Price Component is not
considered in Section 1.130 "Seller's Cost to Cover," but is considered in Section 1.58
"Idaho Power's Cost to Cover." Please explain whether other customers will pay the
additional cost when the Green Tags Price Component is not considered in Seller's Cost
to Cover. [For example, assuming Idaho Power is not able to purchase the Net Output
and the Seller sells the Net Output into the market at , Idaho Power will need to
pay the Seller for the Net Output. However, if the
Green Tags Price Component is considered, Idaho Power will pay less than ].
RESPONSE TO REQUEST FOR PRODUCTION NO. 26:

Seller’s Cost to Cover is only applicable under section 12.2.2. as a remedy for
Idaho Power’s failure to purchase. “If Idaho Power fails to receive or purchase all or part
of the Net Output and Green Tags required to be purchased pursuant hereto and such
failure is not excused under the terms hereof or by Seller’s failure to perform …" In such
a case Seller is required to mitigate its damages (section 12.6, which includes
commercially reasonable efforts to maximize the price for Net Output and the associated
Green Tags) which is deducted from potential damages.
Green Tags are specifically mentioned as part of Idaho Power’s cost to cover to
assure that any replacement power is renewable generation. There is not a separate
price paid in the contract for Green Tags. They are included with the purchase of the
energy. If Idaho Power buys replacement power, then it must buy renewable energy. If
there is unpurchased energy in the unlikely event of an Idaho Power failure to purchase,
the Seller would retain the Green Tags associated with the unpurchased energy to sell
into the market. Idaho Power would not receive Green Tags for generation that it did not
purchase.

IDAHO POWER COMPANY’S CONFIDENTIAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF - 13
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning and Coordination Manager, Idaho Power Company.
Respectfully submitted this 23rd day of February 2023.

DONOVAN E. WALKER
Attorney for Idaho Power Company

IDAHO POWER COMPANY’S CONFIDENTIAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF - 14
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on the 23rd day of February 2023, I served a true and
correct copy of the foregoing Idaho Power Company’s Confidential Response to the
Second Production Request of the Commission Staff upon the following named parties
by the method indicated below, and addressed to the following:

Chris Burdin
Idaho Public Utilities Commission
P.O. Box 83720
11331 West Chinden Blvd, Bldg 8
Suite 201-A
Boise ID 83714

Emailed to:
[e-mail]
Darrell Early
Ed Jewell
Wil Gehl
Boise City Attorney’s Office
150 N. Capitol Blvd.
P.O. Box 500
Boise, Idaho 83701-0500

Emailed to:
[e-mail]
[e-mail]
[e-mail]
[e-mail]

________________________________
Christy Davenport
Legal Administrative Assistant

CERTIFICATE OF ATTORNEY

ASSERTION THAT INFORMATION CONTAINED IN AN IDAHO PUBLIC UTILITIES
COMMISSION FILING IS PROTECTED FROM PUBLIC INSPECTION
Case No. IPC-E-22-29
Idaho Power Company’s Application for Approval of a Power Purchase
Agreement with Pleasant Valley Solar, LLC

The undersigned attorney, in accordance with RP 67, believes that the Idaho
Power Company’s Confidential Response to the Second Production Request of the
Commission Staff to Idaho Power Company dated February 23, 2023, may contain
information that Idaho Power Company or a third-party claims is confidential as
described in Idaho Code § 74-101, et seq., and § 48-801, et seq., and as such is
exempt from public inspection, examination, or copying.

DATED this 23rd day of February 2023.

Donavan Walker
Counsel for Idaho Power Company