20170802notice_of_modified_procedure_order_no_33831.pdf

Office of the Secretary
Service Date
August 2,2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )CASE NO.GNR-E-17-02
OF IDAHO POWER COMPANY TO )
REVIEW THE SURROGATE AVOIDABLE )NOTICE OF
RESOURCE (SAR)METHODOLOGY FOR )MODIFIED PROCEDURE
CALCULATING PUBLISHED AVOIDED )
COST RATES )ORDER NO.33831
______________________________________________________________________________________
)
Each year since 2013,Staff has calculated updated published avoided cost rates for
contracts between the three Idaho utilities (Idaho Power,PacifiCorp,and Avista)and qualifying
facilities under the Public Utility Regulatory Policies Act (PURPA).Order No.32697;see Case
Nos.IPC-E-17-07,PAC-E-17-05,AVU-E-17-02.The annual update reflects the updated natural
gas price forecast of the U.S.Energy Information Administration (EIA),and each year,Staff has
used the ETA’s Mountain Region natural gas forecast.See Order Nos.32817,33041,33305,
33538.Idaho Power Company filed an objection to Staffs May 2017 proposed update,asserting
that it should be calculated using the ETA’s Henry Hub forecast rather than the EIA’s Mountain
Region forecast.See Idaho Power Objection in Case No.IPC-E-17-07.
The Commission approved Staffs proposed published avoided cost rates as reasonable
but directed the Commission Secretary to accept Idaho Power’s Objection in Case No.IPC-E-17-
07 as an application to initiate a generic proceeding.Order No.33773.The Commission issued a
Notice of the generic proceeding,and set a deadline for petitions to intervene.Order No.33778.
The Commission received and granted Petitions to Intervene by Avista Corporation,the Idaho
Hydroelectric Power Producers Trust d/b/a Idahydro,Renewable Energy Coalition (REC),the J,R.
Simplot Company,and Tamarack Energy Partnership.Order Nos.33788,33794,33802,33807,
33809.The Commission Secretary issued a Notice of Parties,including these named intervenors,
and PacifiCorp,which is a party by virtue of being one of Idaho’s three electric utilities in this
generic case.
The parties informally conferred and agreed that the sole issue is whether the
Commission should use the EIA’s Henry Hub forecast instead of the EIA’s Mountain Region
forecast in calculating published avoided cost rates each year,The parties did not agree how to
process this case.Staff thus brought that issue before the Commission at its July 31,2017 decision
meeting.According to Staff,Avista and Idaho Power agreed with Staffs proposal that this case
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33831
be processed by Modified Procedure.Staff represented that Simplot and REC indicated they
believed a technical hearing was necessary.No party filed a motion asking the Commission to set
such a hearing.Rules 202 and 203 of the Commission’s Rules of Procedure,IDAPA 31.01.01.202
and .203,state that “[plersons desiring a hearing must specifically request a hearing in their written
protests or comments”and state ‘reasons why modified procedure should not be used.
Based on our review of the record to date,and absent a written submission by a person
or party requesting an alternative,the Commission has preliminarily determined that it is
appropriate to review this case through Modified Procedure.This preliminary finding does not
preclude future consideration of a technical hearing should a request be submitted.
NOTICE OF MODIFIED PROCEDURE
YOU ARE HEREBY NOTIFIED that the issue to be decided in this case is whether
the Commission should use the ETA’s Henry Hub forecast instead of the EIA’s Mountain Region
forecast to calculate published avoided cost rates each year.As noted above,Idaho Power has
objected to Staff’s use of the E1A’s Mountain Region natural gas forecast in calculating updated
published avoided cost rates.Idaho Power proposed that the updated published avoided cost rates
should have been calculated using the ETA’s Henry Hub natural gas forecast.See Idaho Power
Objection (hereafter referred to as the “Application,”per Order No.33773).
YOU ARE FURTHER NOTIFIED that Idaho Power uses the Henry Hub forecast in
the Company’s Integrated Resource Plan (IRP)process,and in arriving at avoided cost rates
calculated under the Incremental Cost IRP method (for projects that exceed the published rate
eligibility cap).Application at 2.
YOU ARE FURTHER NOTIFIED that the Company asserts that using the Mountain
Region forecast (as proposed by Staff and adopted by the Commission in Order No.33773)to
calculate published avoided cost rates results in rates that are over $8 per megawatt-hour (MWh)
more than using the Henry Hub forecast for the same calculation.Id.
YOU ARE FURTHER NOTIFIED that,according to the Company,Order No.32697
does not specify which subset of the ETA’s forecast Staff must use in calculating updates to the
Commission’s published avoided cost rates.Id.at 3.The Company asserts that the Henry Hub
ETA forecast is used by the Public Utility Commission of Oregon to update its published avoided
cost pricing.Id.at 6.The Company contends,“Customers are harmed by an avoided cost
methodology that results in inflated prices based on natural gas forecasts that are not applicable to
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33831 2
the utility.”Id.atô.The Company further contends,“[tihe continued use of the Mountain Region
natural gas forecast that does not represent prices that are utilized by Idaho Power,results in an
artificially high price that custoiers should not be required to pay.”Id.at 7.
YOU ARE FURTHER NOTIFIED that the Company argues,using the EIA’s Henry
Hub forecast “would result in a closer approximation of the Company’s avoided cost pricing,
which for published rates is locked in for 20-year term contracts,and results in a substantial cost
savings to Idaho Power customers in the mandatory PURPA purchase requirements of potentially
hundreds of millions of dollars.”Id.at 7-8.
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter,and that the Commission will proceed
under Modified Procedure pursuant to Rules 201 through 204 of the idaho Public Utilities
Commission’s Rules of Procedure,IDAPA 31.01.01.201 through .204.The Commission notes
that Modified Procedure and written comments have proven to be an effective means for obtaining
public input and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application must file a written comment in support or opposition with the Commission within
twenty-one (21)days from the service date of this Notice.The comment must contain a statement
of reasons supporting the comment.Persons desiring a hearing must specifically request a hearing
in their written comments.Written comments concerning this case shall be mailed to the
Commission at the address below:
Commission Secretary
Idaho Public Utilities Commission
P0 Box 83720
Boise,ID 83720-0074
Street Address for Express Mail:
472 W.Washington Street
Boise,ID 83702-59 18
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission’s home page at wwv pu daiiogv.Click the “Case Comment or Question Form”
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33831 3
under the “Consumers”tab,and complete the comment form using the case number as it appears
on the front of this document.’
YOU ARE FURTHER NOTIFIED that if a party wishes to reply to the comments,the
party must file its reply within 14 days from the comment deadline.
YOU ARE FURTHER NOTIFIED that if no written comments,protests,or request for
hearing are received within the time limit set,the Commission will consider this matter on its
merits and enter its Order without a formal hearing.If written comments and/or request for hearing
are received within the time limit set,the Commission will consider them and,in its discretion,
may set the matter for formal hearing.
ORDER
IT IS HEREBY ORDERED that this case be processed by Modified Procedure,IDAPA
31.O1.Ol.201-.204.Persons interested in submitting written comments in this matter must do so
no later than 21 days from the service date of this Order.
IT IS FURTHER ORDERED that if a party wishes to file a reply,the party must file the
reply within 14 days from the comment deadline.
Parties may access public comments through the Commission’s electronic docket for the case.Parties must serve
their documents on all other parties as specified in the Notice of Parties to this case.
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33831 4
DONE by Order of the Idaho Public Utilities Commission at Boise,idaho this Zn
day of August 2017.
ATTEST:
V
Diane M.Hanian
Commission Secretary
O:GNR-E-1 7-O2djh2
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33831
ERIC ANDERSON,COMMISSIONER
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