20170110_5174.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

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

FROM: CAMILLE CHRISTEN
DEPUTY ATTORNEY GENERAL

DATE: JANUARY 6, 2017

SUBJECT: IDAHO POWER’S APPLICATION TO APPROVE FIRST AMENDMENT
TO ITS ENERGY SALES AGREEMENT WITH ORCHARD RANCH
SOLAR, LLC, CASE NO. IPC-E-16-37

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
Orchard Ranch Solar, LLC (Orchard Ranch). The ESA is a contract under the Public Utility
Regulatory Policies Act (PURPA). The Amendment deletes an inapplicable provision, corrects a
typographical error, and updates and corrects information in the ESA’s Appendix B. Idaho
Power asks that the Commission approve its Application upon Staff’s review and without further
process. Application at 4.
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 cost, 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 Orchard Ranch in 2014. Order
No. 33202. Under the ESA, Idaho Power purchases and Orchard Ranch sells energy generated
DECISION MEMORANDUM 2
by Orchard Ranch’s solar facility (Facility) – a PURPA QF – near Murphy, Idaho. Application
at 2. The ESA contains prices based on the IRP avoided cost methodology. Application at 2-3.
PROPOSED AMENDMENT
In the Amendment, Idaho Power and Orchard Ranch agree to delete Article 3.3 of the
ESA, which provides that Orchard Ranch 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-14-36 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, 3.
The Company and Orchard Ranch 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). Finally, the
parties agree to changes to Appendix B of the ESA to update the description of the Facility and
correct the description of its location. Id. at 3-4. The Facility’s physical characteristics have
changed since the Commission approved the ESA. Id. at 3. Accordingly, the Company and
Orchard Ranch agree to amend Appendix B to include “a more generalized Facility description”
and a corrected location of the facility. Id. at 3-4. According to the Application, the changes
included in the Amendment “have no material effect to the terms and provisions of the ESA and
[would] not alter the performance requirements or pricing” in the ESA. Id. at 4.
STAFF RECOMMENDATION
Staff believes the proposed changes are limited in scope and have no substantive
impact on the ESA. Accordingly, Staff recommends that the Company’s request be approved
without further process.
COMMISSION DECISION
Does the Commission wish to approve the Application without further process?

M-IPC-E-16-37_cc