20170110_5171.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF

FROM: DAPHNE HUANG
DEPUTY ATTORNEY GENERAL

DATE: JANUARY 5, 2017

SUBJECT: IDAHO POWER’S APPLICATION TO APPROVE FIRST AMENDMENT
TO ITS ENERGY SALES AGREEMENT WITH AMERICAN FALLS
SOLAR II, LLC, CASE NO. IPC-E-16-35

On December 22, 2016, Idaho Power Company filed an Application asking the
Commission to approve the First Amendment to its Energy Sales Agreement (ESA) with
American Falls Solar II, LLC (American Falls II). The ESA is a contract under the Public Utility
Regulatory Policies Act (PURPA). The Amendment deletes an inapplicable provision, corrects a
typographical error, updates and corrects information in the ESA’s Appendix B, and adds an
Appendix I regarding net energy allocation.
BACKGROUND
Under PURPA, electric utilities must purchase electric energy from “qualifying
facilities” (QFs) at purchase or “avoided cost” rates approved by this Commission. 16 U.S.C. §
824a-3; Idaho Power Co. v. Idaho PUC, 155 Idaho 780, 789, 316 P.3d 1278, 1287 (2013). The
Commission has established two methods for calculating avoided costs, depending on the size of
the QF project: (1) the surrogate avoided resource (SAR) methodology, used to establish
“published” avoided cost rates; and (2) the integrated resource plan (IRP) methodology, to
calculate avoided cost rates for projects exceeding published rate limits. See Order No. 32697 at
7-8. Published rates are available for wind and solar QFs with a design capacity of up to 100
kilowatts (kW), and for QFs of all other resource types with a design capacity of up to 10
average megawatts (aMW). Id.; see also 18 C.F.R. § 292.304(c).
The Commission approved Idaho Power’s ESA with American Falls II in 2014.
Order No. 33201. Under the ESA, Idaho Power purchases and American Falls II sells energy
generated by American Falls II’s solar facility (Facility) – a PURPA QF – near American Falls,
DECISION MEMORANDUM 2
Idaho. Application at 2. The ESA contains prices based on the IRP avoided cost methodology.
Id. at 2-3.
PROPOSED AMENDMENT
In the Amendment, Idaho Power and American Falls II agree to delete Article 3.3 of
the ESA, which provides that American Falls II will “take such steps as may be required to
maintain the [QF’s] status” as a solar published rate facility. Id. at 2; see Attachment 1 to
Application in Case No. IPC-E-14-35 at 10 (ESA Art. 3.3). As noted in the Application here, the
Facility “exceeds the eligibility threshold for published avoided cost rates,” thus the language of
Article 3.3 does not apply. Application at 2.
The Company and American Falls also agree to correct Article 7.4 of the ESA to
include the word “Percentage,” inadvertently omitted from the second sentence which should
read, “All pricing contained within Appendix E for the current applicable month(s) will be
multiplied by the Pricing Adjustment Percentage. . . .” Id. at 3 (emphasis added). In addition,
the Facility’s physical characteristics have changed since the Commission approved the ESA,
which describes the Facility’s configuration, design, and construction in its Appendix B-1. Id.
Accordingly, the Company and American Falls II agree Appendix B will include “a more
generalized Facility description” that is consistent with the QF’s Generator Interconnection
Agreement (GIA). Id. at 2, 4.
Finally, the Amendment adds Appendix I, Net Energy Allocation. Idaho Power states
that the Facility “utilizes an interconnection that is shared with another project, American Falls
Solar, LLC.” Id. at 4. Idaho Power has a single point of delivery (POD) and revenue meter for
the two facilities that measures the total net energy of both projects. Id. “Appendix I establishes
the method for determining each project’s Net Energy deliveries,” for administration of the ESA.
Id. The Company states that the changes in the Amendment “have no material effect to the
[ESA’s] terms and provisions . . . and [would] not alter the [ESA’s] performance requirements or
pricing,” but are proposed for the ESA’s proper administration and enforcement. Id. at 5.
STAFF RECOMMENDATION
Staff believes most of the proposed changes are limited in scope. However, Staff
believes it is appropriate to provide comments to the Commission regarding the Company’s Net
Energy Allocation method. Accordingly, Staff recommends that the Company’s request be
processed by Modified Procedure with a 21-day comment period. Although Idaho Power asked
DECISION MEMORANDUM 3
that its Application be approved without further process, Application at 5, Counsel for the
Company indicated no objection to Staff’s recommendation to use Modified Procedure.
COMMISSION DECISION
Does the Commission wish to issue a Notice of Application and Notice of Modified
Procedure with a 21-day comment period as suggested by Staff?

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