20220713Final_Order_No_35462.pdf

ORDER NO. 35462 1

Office of the Secretary
Service Date
July 13, 2022
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On February 23, 2022, Avista Corporation (“Avista”) and the Regents of the University
of Idaho (“University”) (collectively, the “Parties”) jointly petitioned the Commission for an order
approving a power purchase agreement (“Agreement”) between Avista and the University for the
University’s facility comprised of three micro-steam turbine-generator sets (“Petition”). Petition
at 1. The Parties requested a Commission order approving the Agreement’s effective date of
February 16, 2022. Id. at 4.
On March 25, 2022, the Commission issued a Notice of Petition and Notice of Modified
Procedure, setting public comment and Company reply deadlines. Order No. 35356.
Commission Staff (“Staff”) filed comments to which the Company replied. No other
comments were received.
Having reviewed the record in this case, we issue this Order approving the joint Petition
of Avista and the University as amended.
BACKGROUND AND PETITION
The University owns and operates an 825 kW micro-steam turbine electric generation
facility (“Facility”) located in Moscow, Idaho which is connected to Avista’s electrical system. Id.
The Parties submitted an interconnection agreement with their Petition. See Exhibit D to the
Petition.
The University intends to use the output from the Facility to serve the University’s load
first. Petition at 3. If the Facility’s output exceeds its load, the University will sell the excess energy
to the Company at the avoided costs calculated at the time of delivery. Id. For any energy delivered
from the Facility to the Point of Delivery in any hour, the avoided cost will equal the Market
Energy Price for the hour expressed in $/kilowatt-hour (“kWh”) multiplied by the total kWh
delivered in that hour. Id.; see also Section 5.2 of Exhibit D.
The Parties agreed to a term of 20 years from February 16, 2022. Petition at 4.

IN THE MATTER OF AVISTA AND THE
UNIVERSITY OF IDAHO’S JOINT
PETITION FOR APPROVAL OF A POWER
PURCHASE AGREEMENT (STEAM
FACILITY)
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CASE NO. AVU-E-22-03

ORDER NO. 35462
ORDER NO. 35462 2

STAFF COMMENTS
Based on its review, Staff recommends the parties make the following changes to the
Agreement: (1) remove the option, “other mutually agreed-to index;” (2) set avoided cost rates at
85% of the PowerDex hourly Mid-C index price; (3) correct the mistaken Nameplate Size in
Attachment 2 of exhibit D; (4) use 85% of PowerDex hourly mid-Columbia index price as avoided
cost rates for the potential of a lapsed contract period; and (5) update Article 21 to ensure any
amendment or modification does not become valid without Commission authorization. Staff
Comments at 2.
1. Avoided Cost Rates
Staff notes that the Company’s Schedule 62 Cogeneration and Small Power Production
Schedule provides six rate options, none of which is purely market based. However, Staff notes
the Agreement proposes to use the “PowerDex hourly Mid-C index price”—a purely market-based
rate—as the avoided cost rates in the Agreement. Id. at 3. Staff notes that market-based rates for
LEO purchases has been approved by the Commission before and does not disagree with allowing
these rates in the Agreement. Id.
That said, Staff recommends the Parties remove the option of “other mutually agreed-
to index” in Articles 1.16 and 5.2 of the Agreement because, to change the Agreement to use
another market price index, the Parties would need to obtain prior Commission approval.
Staff further recommends that an 85% adjustment factor be applied to the PowerDex
hourly Mid-C index price for avoided cost rates for non-firm energy generation, consistent with
prior Commission orders.
2. Nameplate Size
Staff notes that Attachment No. 2 of Exhibit D states that the Nameplate Size is 1,050
kilowatts (“kWs”) but believes it should be 825 kWs. Staff notes that this discrepancy was likely
an error because elsewhere in the Application the Facility’s Nameplate Capacity rating is listed as
825 kWs, Exhibit A explicitly states the project consists of “three micro-steam turbine generator
sets designed to produce 275 kWs each”—for a total of 825 kWs, and Attachment No. 2 of Exhibit
D states the Maximum Generation Injection at Point of Common Coupling is 825 kWs. Id. at 4.

ORDER NO. 35462 3

3. Lapsed Contract Period
Staff recommends that if the final approved effective date results in a lapsed contract
period that requires retroactive rates, the Parties use 85% of the PowerDex hourly Mid-C index
price for the energy delivered during the lapsed contract period.
4. Renewable Energy Certificates
Staff notes that the Commission has never decided REC ownership or allocation for
QF’s that use market-based rates. Staff believes the Parties’ agreement for the University to retain
the RECs is reasonable given that the Parties are not using IRP-based avoided cost rates or
published avoided cost rates, which the Commission has previously determined allocation and
ownership for.
5. Article 21: Amendment
Staff believes that Article 21 of the Agreement, which states that, “[n]o change,
amendment or modification of any provision of this Agreement shall be valid unless set forth in a
written amendment to this Agreement signed by both Parties,” should include additional language
reflecting that Commission approval is required for any amendment or modification to the
Agreement before it becomes valid.
Staff recommends that the Parties file an updated Agreement as a compliance filing to
reflect Staff’s recommended changes.
COMPANY REPLY COMMENTS
The Company filed reply comments stating that it agreed with all of Staff’s
recommendations and that it incorporated them into an Amended Agreement. The Company filed
the Amended Agreement which incorporated all of Staff’s recommendations as an attachment to
its comments.
COMMISSION DISCUSSION AND FINDINGS
The Commission has jurisdiction over this matter under Idaho Code §§ 61-501, -502,
and -503. Idaho Code § 61-501 authorizes the Commission to “supervise and regulate every public
utility in the state and to do all things necessary to carry out the spirit and intent of the [Public
Utilities Law].” Idaho Code §§ 61-502 and -503 empower the Commission 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. 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
ORDER NO. 35462 4

purchase of energy and capacity from QFs, and to implement FERC rules. The Commission may
enter any final order consistent with its authority under Title 61 and PURPA.
The Commission has reviewed the record, including the Parties’ Petition, Staff’s
comments, Avista’s reply comments, and the Amended Agreement. The Amended Agreement
incorporates all of Staff’s recommendations. We find it to be fair, just, and reasonable to approve
the Parties’ Amended Agreement filed with Avista’s reply comments.
ORDER
IT IS HEREBY ORDERED that the Amended Agreement between the Company and
the University is approved, effective as of February 16, 2022.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order regarding any matter
decided in this Order. Within seven (7) days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration. Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 13th day
of July 2022.

ERIC ANDERSON, PRESIDENT

JOHN CHATBURN, COMMISSIONER

JOHN HAMMOND, COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

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