20221005Comments.pdf

MICHAEL DUVAL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, TDAHO 83720-0074
[phone]
IDAHO BAR NO. II7I4
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Street Address for Express Mail:
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BOISE, TD 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIBS COMMISSION
IN THE MATTER OF THE JOINT PETITION
OF AVISTA CORPORATION AND IDAHO
COUNTY LIGHT & POWER COOPERATIVE
ASSOCIATION FOR APPROVAL OF POWER
PURCHASE AND SALE AGREEMENT
CASE NO. AVU-8.22.I4
COMMENTS OF THE
COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission, by and through its Attomey of
record, Michael Duval, Deputy Attorney General, submits the following comments.
BACKGROUND
On August 11,2022, Avista Corporation ("Company") and Idaho County Light & Power
Cooperative Association, Inc. ("Seller") (hereinafter referred to as the "Parties"), jointly applied
to the Commission requesting an order approving the Parties' new Power Purchase Agreement
("PPA"). Seller owns and operates a 1,0101 kilowatt ("kW") hydroelectric generating facility
near Lucile, Idaho ("Facility"). The Facility is a quali$ing facility under the Public Utility
Regulatory Policies Act of 1978. The Parties requested an effective date of October 31,2022,
t Given the limitations of the diameter of the penstock, Seller estimates the maximum net power production
capacity of the Facility under ideal conditions is 900 kW. Joint Petition at 2.
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ISTAFF COMMENTS OCTOBER 5,2022
because the original 1986 contract will expire on October 30,2022. The PPA's term is 20 years
following the effective date of October 31,2022.
STAFF REVIEW
Staffls review has focused on the Nominal Rating versus the Maximum Net Power
Production Capacity, Capacity Payment Eligibility, Avoided Cost Rates, Potential Modifications
to the Facility, and the Operating Year. Staff recommends that the Parties amend the PPA to
reflect the updated definition of Operating Year.
Nominal Rating versus Maximum Net Power Production Capacity
Staff does not have any issues with the Nominal Rating or Maximum Net Power
Production Capacity used in the PPA. The Nominal Rating2 stated in the original 1986 contract
was 900 kW, which considered the effect of limitations of the penstock. Absent any penstock
limitations, the Nominal Rating in the original 1986 contract could have been listed as 1,010 kW
See Responses to Staff s Production Request No. I (b) and 1 (c).
In the proposed PPA, the Nominal Rating is listed as I ,010 kW, absent any penstock
limitations. Considering the limitations of the penstock, the proposed PPA lists the Maximum
Net Power Production Capacity under ideal conditions is approximately 900 kW. See Exhibit D
of the PPA and Response to Staff s Production Request No. l(b).
Although the original 1986 contract did not specify the impacts of the penstock
limitations, the Nominal Rating of the Facility and the Maximum Net Power Production
Capacity have not changed since the original contract. See Response to Staff s Production
Request No. I (d). Therefore, Staff does not have any issues with the Nominal Rating or the
Maximum Net Power Production Capacity used in the PPA.
Capacity Payment Eligibility
Staff believes that the Facility should be granted immediate capacity payments for the
full term of the PPA. In Order No.32697, the Commission stated that, "if a QF project is being
paid for capacity at the end of the contract term and the parties are seeking renewal/extension of
the contract, the renewal/extension would include immediate payment of capacity." Because the
2 Nominal Rating means the same as Nameplate Rating. Response to Staff s Production Request No. I (a)
2STAFF COMMENTS OCTOBER 5,2022
1986 contract contained capacity payments, Staffrecommends immediate capacity payments for
the full term of the PPA.
Avoided Cost Rates
The PPA was signed by both Parties on August 9,2022, and the avoided cost rates used
are the rates authorized at that time.
Potential Modifications to Facility
Section 9.7 of the PPA states "[a]ny modifications to the Facility from the as-built
description of the Facility in Exhibit D shall not be valid unless set forth in a written amendment
to this Agreement signed by both Parties and subsequently approved by the Commission." Staff
believes this closely follows Commission's direction in Order No. 35489 and sufficiently
addresses potential issues associated with modifications to Facility.
Operating Year
Section l.l9 of the PPA defines Operating Year as "each l2-month period from July I
through June 30." Because the original 1986 contract expires on October 30,2022,5taff
believes the Operating Year should have been defined as "each 12-month period from October
3l through October 30." The Company agrees with Staff and has submitted an amendment to
reflect the updated definition of Operating Year.
STAFF RECOMMENDATIONS
Staff recommends Commission approval of the amended PPA as filed to include the
correct definition of Operating Year.
JSTAFF COMMENTS OCTOBER 5,2022
Respectfully submitted this day of October20?2.
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Michael Duval
Deputy Attorney General
Teehnioal Staff: Yao Yin
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4STAFF COMMENTS ocToBER 5,2A22
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 5th DAY OF OCTOBER 2022,
SERVED THE FOREGOING COMMENTS OF TIM COMMISSION STAFF, IN
CASE NO. AVU.E,-22-14, BY E.MAILING A COPY THEREOF, TO THE
FOLLOWING:
KEVIN HOLLAND MANAGER
WHOLESALE MARKETING &
CONTRACTS
AVISTA CORPORATION
PO BO){ 3727
SPOKANE WA99220-3727
E-MAIL : [e-mail]
[e-mail]
GREGORY M ADAMS
RICHARDSON ADAMS PLLC
5I5 N 27TH ST
BOISE ID 83702
E-MAIL: [e-mail]
MICHAEL G ANDREA
SENIOR COUNSEL
AVISTA CORPORATION
PO BOX3727
SPOKANE WA99220-3727
E-mail: [e-mail]
MAX BEACH
ID COUNTY LIGHT & POWER
COOPERATIVE
PO BOX 300
GRANDEVILLE ID 83530
E-MAIL: [e-mail]
CERTIFICATE OF SERVTCE