20150227Petition.pdf

Avista Corp.
1411 East Mission P.O. Box3727
Spokane. Washington 99220-0500
Telephone [phone]
TollFree 800-727-9170
February 26,2015
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
P O Box 83720
Boise,lD 83720-0074
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Re: Avista Application No. AW-E-I 5-lU
Dear Ms. Jewell:
Avista Corporation, doing business as Avista Utilities respectfully submits for filing with the
Commission an original and seven (7) copies of the Company's petition and supporting
testimony requesting that the Commission issue an Order modifring the terms and conditions by
which Avista must purchase the output from Quali$ing Facilities pursuant to PURPA.
Please direct any questions on this matter to Michael Andrea, Sr. Counsel at [phone].
Sincerely,
Manager, Regulatory Policy
Avista Utilities
509-495-4975
linda. [e-mail]
Enclosures
Michael G. Andrea
Senior Counsel
Avista Corporation
l4l I East Mission, MSC-23
Spokane, WA99202
Phone: [phone]
Facsimile: [phone]
Email : michael. [e-mail]
Attorney for Avista Corporation
BEFORE THE IDAHO
TN THE MATTER OF AVISTA
PUBLIC UTILITIES COMMISSION
)) CASE NO. AVU-E-rs-o I
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CORPORATION'S PETITION TO MODIFY
TERMS AND CONDITIONS OF
PROSPECTIVE PURPA AGREEMENTS
Pursuant to IPUC Rule of Procedure 56, Avista Corporation ("Avista") hereby
petitions the Idaho Public Utilities Commission ("Commission") to issue an order
modifying the terms and conditions by which Avista must purchase the output from
Qualifring Facilities ("QF") pursuant to sections 201 and 210 of the Public Utility
Regulatory Policies Act of 1978 ("PURPA"). Specifically, Avista requests that the
Commission modiff the terms and conditions by which Avista must purchase output
from QFs under PURPA to afford Avista any interim and final relief that the Commission
provides to other utilities that are subject to PURPA in the State of Idaho, including the
interim relief that the Commission provided to Idaho Power Company ("Idaho Power") in
Order No.33222.
Page - 1 AVISTA CORPORATION'S PETITION TO MODIFY TERMS AND
CONDITIONS OF PROSPECTIVE PURPA AGREEMENTS
Avista's Petition to Modift Terms and Conditions of Prospective PURPA
Agreements ("Petition") is supported by the direct testimony of Clint Kalich, which is
attached hereto as Attachment A.
BACKGROUND
On January 30, 2015,Idaho Power filed its petition ("IPC Petition") to modifu
terms and conditions of prospective PURPA energy sales agreements in IPUC Case No.
IPC-E-15-01. Specifically, Idaho Power seeks to reduce the maximum required for
prospective PURPA agreements from 20 years to two years. IPC Petition at 2, 5,27-37.
Idaho Power frrther indicated that there may be several issues related to the
Commission's implementation of PURPA that warrant additional examination and
possible revision, including the avoided cost pricing methodologies, exemption from
PURPA under section 2l0,part M , Commission pursuit of waiver from the requirements
of section 21 0, subpart C pursuant to I 8 C.F.R . 5 292.402, and establishment of caps, or
MW targets, upon the amount of new or repowered projects a utility is required to
procnre over a given period of time. IPC Petition at 4-5. Accordingly, IPC requested
that the Commission issue an order directing that the maximum required term for any
Idaho Power PURPA energy sales agreement be reduced from 20 years to two years and
that the Commission direct any other relief it deems appropriate and in the public interest.
IPC Petitionat36-37.
On February 6, 2015, the Commission issued Order No. 33222 in IPC-E-15-01.
In Order No. 33222, the Commission found that the IPC Petition presented issues
requiring further proceedings. Order No.33222 at 4. The Commission further found that
"there is sufficient evidence that the predicted influx of high-capacity PURPA contracts
Page - 2 AVISTA CORPORATION'S PETITION TO MODIFY TERMS AND
CONDITIONS OF PROSPECTTVE PURPA AGREEMENTS
could significantly and detrimentally impact customer rates and system reliability before
this matter is fully resolved" and, therefore, "action pending resolution of this matter is
warranted." Order No.33222 at 4. Accordingly, the Commission ordered that, effective
February 5, 2015, and pending further order of the Commission, "the maximum
contractual term for Idaho Power's new PURPA contracts shall be five years." Order No.
33222 at 6. Order No.33222 appears to only provide such interim relief to Idaho Power.
AYISTA'S INTEREST AND I'ACTS IN SUPPORT OF AYISTA'S
PETITION FOR AN ORDER PROVIDING AVISTA ANY INTERIM
AIID FINAL RELIEF PROYIDED TO OTHER UTILITIES SUBJECT
TO PURPA IN THE STATE OF'IDAHO
Avista is a utility engaged in, among other things, the business of generating,
transmitting, and distributing electric power to wholesale and retail customers in the State
of Idaho. Accordingly, Avista is subject to PURPA in the State of Idaho.
As discussed above, the Commission has ordered interim relief for Idaho Power
by ordering that, "effective February 5, 2015, and pending further order of the
Commission, the maximum contractual term for Idaho Power's new PURPA contracts
shall be five years." Order No. 33222. This interim relief does not appear to apply to
any other utility that is subject to PURPA in the State of Idaho, including Avista.
As explained in the direct testimony of Clint Kalich, which is attached hereto as
Attachment A, PURPA developers that previously planned to sell the output from their
QFs to Idaho Power may seek to sell such output to Avista. Thus, as a direct result of the
Commission's action affording one utility interim relief, Avista could be required to enter
into a significant number of PURPA contracts. The Commission's grant of interim relief
for Idaho Power without providing similar relief to other utilities subject to PURPA in the
State of Idaho may move the problem from ldaho Power to those other utilities, including
Page - 3 AVISTA CORPORATION'S PETITION TO MODIFY TERMS AND
CONDITIONS OF PROSPECTTVE PURPA AGREEMENTS
Avista. To prevent a rush to Avista's door, and the inevitable associated grandfathering
issues, Avista requests immediate Commission action ordering that the maximum
required contractual term for Avista's new PURPA contracts shall, pending further order
of the Commission, be five years.
In Order No.33222, the Commission found that additional formal proceedings are
necessary. Idaho Power has indicated that it may raise several PURPA issues that may
impact Avista, including among other things, revisions to the avoided cost pricing
methodologies, exemption from PURPA under section 2l0,part M , Commission pursuit
of waiver from the requirements of section 210, subpart C pursuant to 18 C.F.R. $
292.402, and establishment of caps, or MW targets, upon the amount of new or
repowered projects a utility is required to procure over a given period of time. IPC
Petition at 4-5. As explained by Mr. Kalich, PURPA developers are sophisticated and are
motivated to identiff and obtain PURPA contracts that are the most favorable to them. If
the Commission grants one utility relief, but does not grant the same or similar relief to
other utilities subject to PURPA in the State of Idaho, PURPA developers will seek out
the utility that is required to enter into the PURPA contract that is most favorable to the
developers. Therefore, to the extent that any further interim or final relief regarding
PURPA obligations is considered or granted in IPC-E-15-01 (or any other related
proceeding), Avista requests that the Commission simultaneously determine whether any
similar interim or final relief regarding PURPA obligations should be provided to Avista.
Avista respectfully requests that the Commission immediately grant Avista the
interim relief provided to Idaho Power in Order No. 33222 issued IPC-E-I5-01. Avista
further requests that, to the extent that the Commission considers or provides any
Page - 4 AVISTA CORPORATION'S PETITION TO MODIFY TERMS AND
CONDITIONS OF PROSPECTIVE PURPA AGREEMENTS
additional interim or final relief regarding PURPA obligations to any other utility, that
the Commission simultaneously consider whether the same or similar interim or final
relief should provided to Avista.
SERVICE AND COMMT]NICATIONS
The following persons should be included on the official service list in this
proceeding, and should be served with all communications concerning this proceeding:
Michael G. Andrea
Senior Counsel
Avista Corporation
l41l East Mission Ave.-MSC-23
Spokane, WA99202
Phone: [phone]
Email: [e-mail]
Clint Kalich
Manager, Resource Planning & Analysis
Avista Corporation
l4l I East Mission Ave.-MSC-7
Spokane, WA99202
Phone: [phone]
Email: [e-mail]
Linda Gervais
Manager, Regulatory Policy
l41l East Mission Ave. - MSC 27
Spokane, WA 99202
Phone: [phone]
Email : linda. [e-mail]
PRAYER FOR RELIEF'
WHEREFORE, based on the foregoing, Avista hereby respectfully requests:
1. That the Commission immediately issue an order directing that the
maximum required term for any Avista PURPA agreement be reduced from 20 years to
five years consistent with the relief granted to Idaho Power in Order No. 33222; and
2. To the extent that the Commission considers or provides any additional
interim or final relief regarding PURPA obligations to any other utility, that the
Commission simultaneously consider whether the same or similar interim or final relief
should provided to Avista; and
Page - 5 AVISTA CORPORATION'S PETITION TO MODIFY TERMS AND
CONDITIONS OF PROSPECTTVE PURPA AGREEMENTS
3. That the Commission direct any other relief for Avista deemed appropriate
and in the public interest.
Respecttully submitted this *-!^tof February, 2015.
AVTSTA CORPORATTON
A*l*
Senior Counsel
Page - 6 AVISTA CORPORATION'S PETITION TO MODIFY TERMS AND
CONDITIONS OF PROSPECTTVE PURPA AGREEMENTS