20220215Reconsideration_Order_No_35321.pdf

ORDER NO. 35321 1
Office of the Secretary
Service Date
February 15, 2022

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF AVISTA
CORPORATION’S ANNUAL COMPLIANCE
FILING TO UPDATE THE LOAD AND GAS
FORECASTS IN THE INCREMENTAL COST
INTEGRATED RESOURCE PLAN AVOIDED
COST MODEL TO BE USED FOR AVOIDED
COST CALCULATIONS
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CASE NO. AVU-E-21-14

ORDER NO. 35321

On October 13, 2021, Avista Corporation (“Company” or “Avista”) submitted a
compliance filing (“Filing”) requesting the Commission issue an order accepting its updated load
forecast, updated natural gas price forecast, and contracts used as inputs to calculate its incremental
cost Integrated Resource Plan (“IRP”) avoided cost rates, as required by Order Nos. 32697 and
32802.
On November 5, 2021, the Commission issued a Notice of Application and established
a November 26, 2021, public comment deadline and a December 3, 2021, Company reply deadline.
Order No. 35220.
At the Commission’s November 23, 2021, Decision Meeting, Staff submitted a memo
recommending the Commission vacate the comment and reply deadlines established in Order No.
35220 and establish new public comment and Company reply deadlines to allow the Company to
update its Filing with the updated load forecast and updated natural gas forecast used as inputs in
the Company’s incremental cost IRP avoided cost model. Staff offered that the updates would
allow the matter to be processed using the most up-to-date information.
On November 26, 2021, the Commission issued Order No. 35236 vacating the
comment and reply deadlines established in Order No. 35220 and set a December 14, 2021, public
comment deadline and a December 21, 2021, Company reply deadline. Staff filed the only
comments. The Company replied non-substantively.
On December 28, 2021, the Commission approved the Company’s updated load
forecast, updated natural gas price forecast, and contracts used as inputs to calculate its incremental
cost IRP avoided cost rates. See Order No. 35274. In Order No. 35274 the Commission also found
that all subsequent filings by the Company, and the other Idaho electric utilities subject to the
Public Utility Regulatory Policies Act of 1978 (“PURPA”), update load forecast, natural gas price

ORDER NO. 35321 2
forecast, and contracts used as inputs to calculate their IRP have an effective date of January 1 of
the year following their annual filings.
On January 18, 2022, Idaho Power filed a Petition for Reconsideration (“Petition”)
asking the Commission to rescind “that portion of Final Order No. 35274 directing that the January
1st effective date be applicable to ‘all Idaho electric utilities subject to PURPA and make the same
applicable to only Avista.” Idaho Power Petition at 7. No cross-petitions or comments were
received.
Having reviewed the record and Idaho Power’s Petition, we issue this Final Order on
Reconsideration granting Idaho Power’s request that the January 1 effective date for updates to the
load and gas incremental cost IRP avoided cost rates as directed in Order No. 35274 not apply to
it.
BACKGROUND
Under PURPA and the Federal Energy Regulatory Commission’s (“FERC”)
implementing regulations, this Commission has approved the IRP method to calculate avoided
cost rates for qualifying facilities (“QFs”) that are above the resource-specific project eligibility
cap. QFs that are below the applicable project eligibility cap are eligible to receive published
avoided cost rates calculated using the surrogate avoided resource. See Order No. 32697 at 7-8.
The avoided cost rate is the purchase price paid to QFs for the energy and capacity that the QF
provides to the utility. 18 C.F.R. § 292.101(b)(6)(defining “avoided cost”). To ensure that avoided
costs most accurately reflect the utility’s marginal cost of energy or capacity, the Commission has
directed utilities to “update fuel price forecasts and load forecasts annually – between IRP filings,”
and to update the Commission about its “long-term contract commitments because of [their]
potential effect . . . on a utility’s load and resource balance.” See Order No. 32697 at 22.
Order No. 32697 established June 1 as the date to file the annual update. Order No.
32802 later changed the date for filing the annual update to October 15 of each year.
On October 15, 2021, Idaho Power submitted its annual compliance filing to update
the load and gas forecasts for the incremental cost IRP model. See Case No. IPC-E-21-35. Staff
filed comments on December 21, 2021 recommending, among other things, that the Commission
direct Idaho Power, in addition to Avista and Rocky Mountain Power, to continue filing their
annual load and gas forecast updates by October 15, but change the effective date established in
Order No. 32802 to January 1. Staff Comments in Case No. IPC-E-21-35 at 8. On December 28,

ORDER NO. 35321 3
2021, Idaho Power replied, urging the Commission not to change the effective date for the updated
gas and load forecast used to set incremental cost IRP avoided cost rates. Idaho Power Reply
Comments in Case No. IPC-E-21-35 at 10.
On January 21, 2022, the Commission issued Order No. 35294 approving Idaho
Power’s updated load and gas forecasts used in the incremental cost IRP avoided cost model filed
in Case No. IPC-E-21-35. Like Order No. 35274, Order No. 35294 also directed Avista, Idaho
Power, and Rocky Mountain Power to continue filing their load and gas forecast updates on
October 15 but changed the future effective dates for the updated IRP avoided cost rates to January
1 as recommended by Staff.
On February 10, 2022, the Commission issued Order No. 35317 in Case No. PAC-E-
21-20, Rocky Mountain Power’s case updating its load and gas forecast used to determine the
incremental cost IRP avoided cost rates. Order No. 35317 directed Rocky Mountain Power’s future
load and gas forecast updates would have an effective date of the following January 1, but did not
apply to Idaho Power or Avista.
IDAHO POWER PETITION
Idaho Power stated its belief that “it is an error to issue a Final Order changing
compliance requirements for Idaho Power in Avista’s case when Idaho Power has a simultaneous
pending proceeding with the exact same issue before the Commission, and the Commission issued
said Final Order [Order No. 35274] . . . in Avista’s case prior to hearing or considering Idaho
Power’s separate case [Case No. IPC-E-21-35].” Idaho Power Petition at 5. Idaho Power describe
the timeline of events in this case and its related—but separate case—Case No IPC-E-21-35. Idaho
Power maintains that on the same day the Final Order in this case was issued, directing Avista,
Idaho Power, and Rocky Mountain Power to file future load and gas forecast updates with an
effective date of January 1—December 28, 2021—it filed reply comments in its own case—Case
No. IPC-E-21-35—considering the same issue. Id. Idaho Power argues that Order No. 35274 was
issued without considering Idaho Power’s reply comments on the same issue in its own case. Id.
Idaho Power’s Petition cites its reply comments in Case No. IPC-E-21-35 where the Company
stated:
The October 15 effective date is critical to ensure that projects that may enter the
energy sales agreement queue after October 15 are priced appropriately based on
the most updated information. Indeed, the Commission has regularly approved past

ORDER NO. 35321 4
October updates effective as of October 15 of the applicable year, even though the
order may be dated after that date.

Id; quoting Idaho Power Reply Comments in Case No. IPC-E-21-35 at 9-10.

The Company continues:

Creating a lag between the updated filing date and the effective date creates the
potential for projects to try to anticipate the impact the update will have on avoided
cost pricing. If projects believe the update will result in lower avoided cost pricing,
there may be the potential for claims that projects have established legally
enforceable obligations as they try to remain eligible for the old pricing. Moving
the effective date to January 1 thus creates the potential for increased litigation,
does not create any benefit, and is unnecessary. Id. at 6; quoting Idaho Power Reply
Comments in Case No. IPC-E-21-35 at 9-10. . . . Creating a lag from October 15 to
January 1 every year with the natural gas and load forecast update unnecessarily
opens up what should be a routine Compliance filing into a potential driver of
controversy and additional litigation over pricing and avoided cost rate eligibility.

Id.

Idaho Power maintains that Order No. 35274 was overreaching because the
Commission did not consider its Reply Comments in Case No IPC-E-21-35 and it was issued in
Avista’s case, which Idaho Power had its own case filed that the Commission was considering at
the time it issued Order No. 35274. Additionally, Idaho Power argues that Order No. 35274 did
not state sufficient reasoning behind the Commission’s decision to alter the effective date of the
load and gas forecast update for IRP avoided cost rates that had been established for several years
since Order No. 32802 was issued. Idaho Power proposed that the January 1 effective date imposed
in Order No. 35274 be considered and ruled upon separately in Case No. IPC-E-21-35 and petitions
the Commission to remove it from the directive in Order No. 35274.
STANDARD OF REVIEW
A person may petition the Commission to reconsider its orders. See Idaho Code § 61-
626; Rules 331-333 (IDAPA 31.01.01.331-.333). Reconsideration allows the petitioner to bring to
the Commission’s attention any question previously determined and affords the Commission an
opportunity to rectify any mistake or omission. Washington Water Power Co. v. Kootenai
Environmental Alliance, 99 Idaho 875, 879, 591 P.2d 122, 126 (1979); Rule 325. The petitioner
has 21 days from the date of the final order in which to ask for reconsideration. Idaho Code § 61-
626(1). The petition must specify why it “contends that the order or any issue decided in the [o]rder

ORDER NO. 35321 5
is unreasonable, unlawful, erroneous or not in conformity with the law.” Rule 331.01. Further, the
petition “must state whether the petitioner . . . requests reconsideration by evidentiary hearing,
written briefs, comments, or interrogatories.” Rule 331.03. Any answers or cross-petitions must
be filed within seven days after the petition was filed. Rule 331.02 and .05.
Once a petition is filed, the Commission must issue an order saying whether it will
reconsider the parts of the order at issue and, “[i]f reconsideration be granted, said order shall
specify how the matter will be reconsidered and whether any cross-petitions for reconsideration
will be granted.” Idaho Code § 61-626(2). If reconsideration is granted, the Commission must
complete its reconsideration within 13 weeks after the date for filing petitions for reconsideration.
Idaho Code § 61-626(2). The Commission must issue its final Order on reconsideration within 28
days after the matter is finally submitted for reconsideration. Id. “If after reconsideration, including
consideration of matters arising since the making of the order, the [C]ommission shall be of the
opinion that the original order or any part thereof is in any respect unjust or unwarranted or should
be changed, the commission may abrogate or change the same.” Idaho Code § 61-626(3). An order
made after reconsideration abrogating or changing the original order has the same force and effect
as an original order. Id.
COMMISSION FINDINGS AND DISCUSSION
The Commission has jurisdiction over this matter under Idaho Code §§ 61-501, -502
and -503. The Commission is empowered to investigate rates, charges, rules, regulations, practices,
and contracts of public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provision of law, and to fix the same by order. Idaho Code §§
61-502 and 61-503. In addition, the Commission has authority under PURPA and FERC
regulations to set avoided costs, to order electric utilities to enter fixed-term obligations for the
purchase of energy from QFs, and to implement FERC rules. The Commission may enter any final
order consistent with its authority under Title 61 and PURPA.
We issued Order No. 35274 directing Avista, Idaho Power, and Rocky Mountain
Power to continue filing their load and gas forecast updates for the incremental cost IRP avoided
cost rates annually on October 15 but changed the effective date from October 15 to the following
January 1. The intent was to alter the effective date to allow Staff and interested parties time to
review the load and gas forecast updates and to prevent having identical filing and effective dates.

ORDER NO. 35321 6
Idaho Power was not a party in this case but Order No. 35274 affects it even though it
had a similar case pending—Case No. IPC-E-21-35. Accordingly, we find it reasonable to grant
Idaho Power’s Petition. The January 1 effective date for future load and gas incremental cost IRP
avoided cost rates in Case No. 35274 no longer applies to Idaho Power. We find that Case No.
IPC-E-21-35 is the appropriate case to determine the effective date for future load and gas
incremental cost IRP avoided cost rates for Idaho Power.
O R D E R
IT IS HEREBY ORDERED Idaho Power’s Petition for reconsideration is granted;
Idaho Power is no longer subject to the directive that future load and gas incremental cost IRP
avoided cost rates will be effective on January 1 as ordered by Order No. 35274.
THIS IS A FINAL ORDER ON RECONSIDERATION. Any party aggrieved by this
Order may appeal to the Supreme Court of Idaho pursuant to the Public Utilities Law and the Idaho
Appellate Rules. See Idaho Code § 61-627.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 15th day
of February 2022.

ERIC ANDERSON, PRESIDENT

JOHN CHATBURN, COMMISSIONER

//ABSTAIN TO AVOID CONFLICT//

JOHN R. HAMMOND, JR., COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\AVU-E-21-14\orders\AVUE2114_final on recon_dh.docx