20170811Decision Memo.pdf

DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECR-ETARY
COMMISSION STAFF
LEGAL
FROM:KARL KLEIN
DEPUTY ATTORNEY GENERAL
DATE: AUGUST 9,2017
SUBJECT: SIMPLOT,S JOINT MOTION FOR EXPEDITED RELIEF FROM THE
COMMISSION'S ORDER TO PROCESS CASE BY MODIFIED
PROCEDURE, CASE NO. GNR-E-17-02
This matter comes before the Commission on the "Expedited Joint Protest and Joint
Motion in Opposition to Modified Procedure and Joint Motion to Convene Technical Hearing"
(the Joint Motion) filed August 4, 2017, by intervenors Idaho Hydroelectric Power Producers
Trust d/b/a Idahydro, Renewable Energy Coalition (REC), the J.R. Simplot Company, and
Tamarack Energy Partnership (TEP). After the Joint Motion was filed, Idaho Power, Avista, and
Staff responded to it. Additionally, Idaho Power's response included a Motion asking the
Commission to clarify the scope of the proceeding. Staff s response to the Joint Motion also
responds to Idaho Power's Motion to Clarify.
This memorandum presents the background leading to these filings. It then briefly
notes arguments raised in the filings (the detailed arguments in the filings speak for themselves
and are not repeated here). It concludes by listing potential decision points for the Commission
to consider in making a ruling.
BACKGROUND
In Case No. IPC-E-17-07, the Commission approved Staffs proposed published
avoided cost rates for PURPA contracts. Staff used the EIA's Mountain Region forecast to
calculate the rates. Idaho Power objected to this and argued that the proposal calculated the rates
using the EIA's Henry Hub forecast should be used. The Commission ultimately treated Idaho
IDECISION MEMORANDUM
Power's objection as an application to initiate this generic case. See Order No. 33773 (Case No.
rPC-E-r7-07).
On June 8, 2017, the Commission issued a Notice of Application and set a deadline
for petitions to intervene in the generic case. Order No. 33778 (Case No. GNR-E-17-02). Avista
Corporation, the Idaho Hydroelectric Power Producers Trust d/b/a Idahydro, REC, J.R. Simplot
Company, and TEP intervened. See Order Nos. 33788, 33794, 33802, 33807, 33809. The
Commission Secretary then issued a Notice of Parties that included Idaho Power, Stafi the
intervenors, and PacifiCorp (which is a party by virtue of being one of ldaho's three electric
utilities in this generic case).
Following this, the parties conferred and agreed that the sole issue in this generic
case is "whetherthe 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." See Order No.
33831, at I (Notice of Modified Procedure). The parties disagreed, however, on how to process
the case. Staff thus submitted a decision memo reporting the parties' views to the Commission:
While Avista, Idaho Power, and Staff proposed to use Modified Procedure, intervenors Simplot
and REC believed a technical hearing was necessary. Id. at l-2.
The Commission ultimately declined to schedule a technical hearing, finding instead
that the case should be processed by Modified Procedure because:
No party filed a motion asking the Commission to set such a hearing. Rules
202 and203 of the Commission's Rules of Procedure, IDAPA 31.01.01.202
and .203, state that "[p]ersons 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.
Id. at l-2. The Commission set a 2l-day comment deadline, and a l4-day reply deadline. Id. at 4.
THE JOINT MOTION
After the Commission issued its Notice of Modified Procedure, intervenors Simplot,
REC, TEP, and Idahydro (the o'Movants") jointly moved the Commission to set aside the Notice
of Modified Procedure and schedule a technical hearing. See Joint Motion, and Idahydro's
DECISION MEMORANDUM 2
Joinder in [the Joint Motion]. The Movants asked for expedited relief within seven days (i.e., by
August 11, 2017) to "prevent premature efforts in preparation of comments that would otherwise
be due within 21 days of the Notice of Modified Procedure," i.e., by August 23,2017. Joint
Motion at 2. The Movants represented that they made good faith efforts to notify all parties of
their expedited request before filing the Joint Motion. /d.
The Movants argue, in summary, that:
o "The legal standard for use of Modified Procedure is not met" (id. at 3-5);
"Modified Procedure is not in the public interest" (id. at 5-8); and
"Modified Procedure with a Zl-day comment deadline is inadequate;"
instead, if Modified Procedure is used, there should be at least 45 days to
comment (id, at8-9).
IDAHO POWER'S RESPONSE AND MOTION TO CLARIFY
Idaho Power' response and motion to clarify argues, in summary:
The proceeding's scope is "properly limited to which subset of the U.S.
[EIA] annual energy outlook's natural gas forecast is appropriate for Idaho
Power in the 2017 anntal update of SAR published avoided cost rates"
(Idaho Power Response at2-6); however,
a
a
a
a
a
"The Commission should vacate and close [this generic case] and proceed
pursuant to Modified Procedure under the limited scope of Idaho Power's
response and objection to Staffls use of the Mountain Region Subset of
EIA's annual energy outlook natural case forecast in Case No. IPC-E-17-
07" (id. at6-9).
AVISTA'S RESPONSE
Avista's response argues, in summary:
The Commission should proceed as specified in the Notice of Modified
Procedure; "The issue in this proceeding is clearly defined and the [Joint
Motion] should be rejected" (Avista Response at2-4).
STAFF RESPONSE
Staff s response argues, in summary:
. "[The] scope of the case [should] be limited to "whether the Commission
should use the EIA's Henry Hub forecast instead of the EIA's Mountain
Region forecast to calculate published avoided cost rates each year" (Staff
Response at 3-4);
JDECISION MEMORANDUM
a
a
"lf the Commission denies Movants' request to vacate Order No. 33831
(Notice of Modified Procedure)," then "the Commission [should] extend
deadlines to 45 days from the date of its order on [the Joint Motion] for
comments, and2l days from the comment deadline for replies" (id.); and
"[the] Commission [should] deny Idaho Power's request to vacate this
docket" (id ).
COMMISSION DECISION
No one asked for oral argument on these filings. Given the parties' written positions,
how does the Commission wish to proceed? For example:
l. Expedited Relief. The Commission can rule upon a motion on fewer than 14 days'
notice if the movants have made good faith efforts to notify all parties, and if the facts support
action on shortened notice. IDAPA 31.01.01 .256.02,.03. Did the Movants make good faith
efforts to notify all parties about the Joint Motion and, if so, do the facts support action on
shortened notice?
2. Clarification of Issue. Does the Commission wish to clarify the issue(s)? If so,
does the Commission wish to subject intervenors to conditions based on the clarification, as
suggested by Staff?
3. Modified Procedure or Technical Hearine. Does the Commission wish to:
a. Grant the Joint Motion by vacating the Notice of Modified Procedure and
setting a technical hearing, as requested by Simplot, REC, TEP, and
Idahydro? If so, how does the Commission wish to set deadlines for
testimony? or
b. Continue to process this case by Modified Procedure, but set longer
comment deadlines with at least 45 days from the service date of the Order
being allowed for comments, and 2l days from the comment deadline
being allowed for replies, as requested by Staff and suggested
(alternatively) by Movants? or
c. Deny the Joint Motion, as suggested by Avista, and continue reviewing
this proceeding as specified in the Notice of Modified Procedure (i.e.,21
days for comments, 14 days for a reply, with parties being allowed to
request a technical hearing, if needed, in their comments); and
4. Close this Case and Reopen the Prior Case. Does the Commission wish to denv
the Joint Motion, and instead close this generic case, vacate Final Order No. 33773, reopen Case
DECISION MEMORANDUM 4
No. IPC-E-17-07, and process Idaho Power's Objection by Modified Procedure in that case, as
requested by Idaho Power?
5. Anything else?
tu(
Karl T. Klein
Deputy Attorney General
M:GNR-E- 17-02_kk
5DECISION MEMORANDUM
Peter J. Richardson (lSB No. 3195)
Attorney for the J. R. Simplot Company
Gregory M. Adams (lSIl No. 7454)
I.ocal Atrorney for the Renewable Energy Coalition
Richardson Adams, PLLC
515 N. 271h Street
Boise, Idaho 83702
'l'elephone: (208) 938-790 I
Fax: [phone]
Gregory M. Adams (lSB No. '1454)
Richardson Adams, PLLC
515 N. 27th Street
Boise, ID 83702
Telephone : 2A8.938.223 6
Fax: [phone]q44
gre gf@ri chardso nadams. c om
Local Counsel for Renewable Energy Coalition
Irion Sanger
Sanger Law, P.C.
I I l7 SW 53'd Avenue
Portland. OR 97215
Attorney for Renewable Energy Coalition
Michael C. Creamer (lSB No.4030)
Preston N. Caner (lSB No. 8462)
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
1'elephone: (208)-388 - 1 200
Facsimile: (208) -388-l 300
Attomeys hr Tamarack Energy Partnership
BEFORE THE
IDAI{O PUBLIC UTILITIES COMMISSION
IN HE MATTER OF THE APPLICAT'ION
IDAHO POWER COMPANY TO REVIEW'TI'IE SI"]RROGATE AVOIDABI,E RESOTJRC]A
(sAR) METHODOLOGY rOR
CAI,CULATING AVOIDED COST RATES
)) C:ASI: NO. GNR-E-17-Az
IXPITDI'II D JOINT I'}RO'f l1S1' AN I)
JOINT MOTION IN OPPOSITION TO
MODI}'I ED PROCEDTJRE AN D
JOINI" MOI'ION TO CONVENI:
TECHNICAT. HEARING
ORIGINAL
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COMBS NOW. the J. R. Simplot Company, Renewable Energy Coalition. and Tamarack
Energy Partnership hereinafter referred to as "Movants,-" and pursuant to the ldaho Public
LJtilities Commission's ("Commission") Rules of Procedure, Rules 56. 203, and 256, IDAPA
3 I .01 .01 .56" 3 I .01 .01 .203, 3l .01 .01 .256.03. hereby move the Commission to schedule technical
hearings in the above captioned matter and not to proceed pursuant to its rules regarding
modified procedure pursuant to Rule 201 et. seq, For the reasons explained herein, Movants
respectfully request expedited treatment on their protest to modified procedure and request that
the Commission vacate the Notice of Modified Procedure issued in this proceeding within seven
days of this filing to prevent the premature efforts in preparation of comments that would
otherw'ise be due within 2l days of the Notice of Modified Procedure.
Rule 201 provides for modified procedure, "by written submissions rather than by
hearing" only when the Commission finds "that the public interest may not require a hearing to
consider the issues presented." For the reasons stated below, the Movants respectfully aver that
the legal standard this Commission has adopted for the use olmodified procedure has not been
met. In addition, the public interest requires a hearing, and technical testimony, because the
issues presented are complex and potentially conrove(ed such that written submissions, by
attomeys. will not be sufficient to create an adequate record upon which a decision can be
rendered in the public interest.
I. REQUEST FOR EXPEDITED TREATMENT
Movants respectfully request expedited treatment on their protest to modified procedure.
Specilically, Movants request that the Commission vac&te the Notice of Moditled Procedure
issued in this proceedirrg w'ithin seven days of'this filing to prevent the premature effbrts in
IXPEDITED JOINT PROTIiST AND JOTNT MOTION IN OPPOSITION TO MODTFIEI)
PROCEDI.JRE AND JOTNT MOTION TO CONVENE TECHNICAI- HEARTNG
PACE 2
preparation of comments that would otherwise be due within 2l days of the Notice ol'Modified
Procedure.
Rule 256 allows expedited consicleration on a pracedural motion if the party requesting
expedited treatment provides the facts supporting such expedited treatment and complies with
the notice provisions in Rule 256.02.b. See IDAPA 31.01.01.256.03.
Expedited treatment is supported by the thcts. Without expedited treatment of this aspect
of Movants' tiling. all parties (including the utilities and staff) will be left to begin preparing
comments to be filed by the currently ef tective deadline of August 23.2017. Good cause
therefore exists for expedited action on the procedural request here under Rule 256.
Additionally, the requested period of seven days provides more than the requisite two days in
Rule 256"02.b, for opposing parties to relay their peisition tc, the Commission Secretary.
Additionally. Movants have complied with the notice provisions lor expedited treatnrent.
Counsel fbr J.R. Simplot made a good faith effort to notify all parties of this expedited request.
Counsel for ldahohydra, Tom Arkoosh, indicated he supports this motion. however he could not
be reached to sign the motion prior to filing. Counsel tbr Commission, Daphne Huang, and
counsel for Rocky Mountain Power, Yvonne Hogle. each received actual notice via telephone.
Counsel for Avista. Michael Andrea, and ceiunsel for ldaho Power, Donovan Walker. did not
answer their telephones, but a voicemail was left notifying them of the motion fbr expedited
relief prior to liling the sanre. All parties w'ere sent a copy of this liling via electronic mail.
)THE LEGAL STANDARD FOR USE OF MODIFTED PIIOCEDTJRE IS
NOT MET
'l"here is, olcourse. rro provision in the [daho Cnde specilically allowing lbr the use ol'
modilled procedure by the Comrnission in prosecuting its dr:ckets. However, the ldaho public
utilities law also does not specifically require an evidentiary hearing. Llence, the legal steurdard
EXPEDITED .lOINl' PRO'[ES'I' AND JOIN'f MOTION lN OPPOSITION T0 MODIFI[1[)
PROCEDURE AND JOINl'MO'|ION TO CONVENI] THCHNICAL HI,ARING
PAGE 3
fur modified procedure is both Commission created and Commission interpreted. The
Commission clearly articulated that standard in a recent docket in which the No(hwest and
Intermountain Power Producers Association (NIPPC) ob.iected to the use of modified procedure
in a contested matter. In response to NIPPC's objection to the use of Modified Procedure this
Commission ruled:
ln American Puhlic Gas the D,C. Circuit held that the Federal Power Commission
(FPC) is not required to process all cases coming before it rvith formal hearings, to
include witness and cross examination, "Evidentiary submissions in written form nray be
sulllcient. Icitation ornitted. underscoring added by the Commission] The Circuit Court
fu(her explained that:
The ability [of the IrPCjto choose with relative lreedom the procedure it will use
to acquire relevant information gives the Commission power to realistically tailor
the proceedings to fit the issues before it, the infbrmation it needs to illuminate
those issues and the manner of presentation which, in its judgment, will bring
belbre it the relevant informati<ln in the most elficient nranner.
The procedure chosen by the Commission nlust olcourse give the parties tbir
notice of exactly rvhat the Cclmmission proposes to do, together rvith an
opportunity to comment. to object, and to make written submissions; and the final
order of the Commissir:n must be based on substantial evidence.l
Significantly, the D.C. Circuit Court opinion relied on by the Commission in denying NIPPC's
objection to the use of Modified Procedure made clear that the parties must have advance "notice
of exactly what the Commission proposes [o do." ]'his Commission relied on that rationale in
its ruling that:
Sul"ficient notice of exactly what the fidaho] Commission was considering was provided
to allow all interested parties an opportunity to participate. Ample opportunity was given
fbr the provide evidence in support of their positions.2
Order 32217 p. l0
Id. p. ll.
ljXPtrDI'|ED JOINT PRO"THST AND JOINT MOl"lON IN OPPOSITION TO MODII"IUD
PROCEDURE AND JOINl' MOTION TO CONVENE TECIINICAL [{EARING
PAGTJ 4
I
2
The Contmission in this docket, by way of contrast with its established standard lbr the use ol'
Modifred Procedure, has not provided the parties with any idea ol'what it is "considering" nor
any idea of what it "proposes to do."
In t'act, the "Application" that ldaho Power trled in this casc does not meet the
requirements fbr an application under the Commission's rules. since it is titled a "Response and
Objection" filed in a diffbrent docket. ldaho Power's proposal is turther confused by a
subsequent "Amended Application" it filed on June 27 ,2017 . afier this Commission's initial
Notice of Application issued on June 8, 2017, wherein ldaho Power appears make substantive
changes to its proposal by altering the reference gas price description it proposes and deleting an
aspect of its prior response and objection related to the "ICIRP methodology." The more recent
Notice of Modified Procedure Order No. 33831 rel'ers only the "Application" &nd it is not clear
what. if any. impact the Amended Application has or what the final proposal is for which parties
are invited to comment.
Without a clean application or clearly proposed changes. it is not entirely clear rvhat the
proposal is upon which Movants would submit comments under modified procedure. C'learly,
this Cornmission's policy on when to proceed on Modified Procedure is not satisfied in this
docket. In this circumstance, modified procedure is not appropriate.
3. MODIFIED PROCEDURE IS NOT IN THE PUBLIC INTEREST
"l"his Commission's rules on Modified Procedure requires bnth a public interest finding
and an identitication of the relevant issues: "l'he Commission may prelinrinarily flnd that the
public interest may not require a hearing to considered the issues presented in a proceeding."
This Commission's Rule allowing Modilied Procedure presumes that the "issues presented" are
sufficiently known such that the Commission may therefore make its finding that resolution of
IIXPEDIT"I:D JOINT PROTI:ST AND JOINT MO-rlON lN OPPOSIl'tON'l'() MODIITIF.t)
PROCEDURE AND JOINT MOT"ION l'O CONVENE'fHCHNICAL H[:ARINC
PAGI: 5
those "issues presented" may be had without a hearing. In this docket. however, the "issues
presentecl" are vague and undefined. Idaho Power's "Application" was actually filed as an
objection in a diftbrent docket (lPc-lr-17- l 7) that was restricted to just determining ldaho
Power's avoided cost rates paid to PTJRPA QFs for the coming year. The Commission restyled
the objection into an application and opened a generic docket to consider ldaho Power's initial
"objection" that has been redefined as an Application. Now the exact scope and implication of
Idaho Power's initial "Objection" is not clear.
Ceneric Dockets are not provided for in the Commission's rules. nor are they provided
for under the Idaho PUC laws. Hence. the exact scope of this "generic docket" is unrestricted
by law or rule.
l'he ostensible issue addressed by ldaho Power in its Objection a.k.a complaint is "the
use of the EIA's Henry l{ub fbrecast, adjusted for Sumas and ldaho City Gate in the 2017 annual
update to published avoided cost rates for ldaho Power."3 The J. R. Simplot Company petitioned
to intervene, noting that ldaho Power's Objection raises issues associated not only with avoided
cost pricing per se. but also with the prudence determination of the Company's energy
conservation and demand response programs.{ ldaho Power did not object to the J. R. Simplot's
Petition to lntervene and ldaho Power made no claim that Simplot's Petition to Intervene
resulted in an expansion of the issues.
Thus, thc issues in this docket clearly extend beyond just the proper natural gas fbrecast
to be used in determining avoided cost rates Idaho Power pays pursuant to its obligations under
PURPA. That said, the issues related to such a determination are complex, fbctually driven and
I Response and Objection of ldaho Power Company at p. 8.
4.1. R. Simplot Petition to Intervene at pp. 2 - 3.
EXPEDI'TED JOIN'I'PROTESTAND JOIN'f MO'I'ION IN OPPOSI"fION TO MODIFIEI)
PROCEDI.'RH AND JOINT MO'|ION TO CONVENE TEC[{NICAI. HEARTNC
PAGE 6
subject to significant divergence of opinion. It is not in the public interest to attempt to resolved
these complex issues via submission of comments, signed by attorneys without the beneflt of
sworn testimony of experts in this complex field. The "applicant" (ldaho Power) should be
required to lile direct testimony putting lbrth a prima thcia case, suhject to critical examination
and discovery rights. If, after examination of that testimony, the parties in lhct conclude the case
could be resolved with responsive comments, the Commission and the parties could certainly
change course at that time. However. at this point, there is no evidentiary basis tcl even fully
understand ldaho Power's position or whether any expert in the t'reld exists to support its
proposal.
'l'he inclusion of the other two investor-owned utilities in this generic docket turther
complicates the factual issues and makes a finding that proceeding under modified procedure
even less susceptible to a public interest finding. Indeed, none of the utilities have put forth
testimony supporting any change in the natural gas fbrecast used for determining avoided costs.
Because the issues are technical in nature it would be inappropriate to proceed w'ithout expert
testimony to serve as the fbundation fbr any Commission decision.
In its Notice of Modified Procedure. the Commission observed that.
No party filed a motion asking the Commission to set such a hearing. Rules 202
and 203 of the Commission's Rules o{'Procedure state that "persons desiring a
hearing must specifically request a hearing in their written protests or comments"
and state "reasons why modified procedure should not be used."s
It is, of course. premature at best to expect pa(ies to specilically request a hearing and flle
written protests to a Notice r:f Modified Procedurc that has not even been issued. Itules 202 and
203 contemplate the proccdure to be followed u./ier a notice ol'moditled procedure has been
5 Notice of'Modified Procedure, Order No.33831 at p.2.
EXPLDITED JOINI-PROTEST AND JOINT MOTION IN OPPOSI'flON'l'O MODIFIEI)
PROC:EDURE AND JOINT MOTION TO CONVENE TECHNICAL HEARING
PAGE 7
issued - not helbre. J'he Movants hereto attempted to infbrmally impress upon the utilities and
staff that modified procedure is inappropriate in a fbctually intense docket such as this * to no
avail. l"{ence the Movants have been f-trrced to fbrmally object to the use of Modified Procedure
and hereby respectfully request the Commission prosecute this case pursuant to a reasoned and
measured process that includes the preliling of direct, reply and rebuttal testimonies atong with
t'ull rights of discovery.
Because the Commission has now issued its Notice of Modihed Procedure it is necessary
to lodge this r.rritten protest to its use. At a minimum. the Commission should vacate its Notice
of Modified Procedure and schedule a prehearing conference to allow the parties to attempt to
specifically identily the relevant issues. narrow'the same if possible, antl to establish a schedule
fbr completion ol'(ongoing) discovery and the lodging oltestimony. rebuttal testimony and
schedule a hearing.
4. MODIFIED PROCEDURE WITH A 2I.OAY COMMTNT DEADLINE IS
TNADEQUATN
'fhough the issues encompassed by this proceeding are not precisely clear. at this point it
appears that the proceeding will involve, at a minimum, analysis ol'dillbrent indices lor natural
gas forecasting. nationwide; the relationship between futures and derivative trading market. such
as the lntercontinental Exchange, and natural gas forecast; and the relationship between natural
gas forecasts rised in surrogate avoided rates ancl ldaho Power's l)emand Side Management
programs.
Discovery trom Movants and Staf'f has begun but is not yet complete. Substantial and
technical expert testimony is needed to fully and adequately present evidence and argument in
this prcrceeding. [-imiting the proceeding to written comments, within a2l-day timeframe. will
not ftrster the fully' considered. lully argued rssolution this proceeding calls fur.
EXPITDITED JOINT PROTEST AND JOINT MOTION rN OPPOSITION TO MODIFIED
PROCEDURE AND JOINT MOTION TO CONVENE TECHNICAL I{EARING
PAGE 8
Further, this case also raises importa"nt policy considerations that apply to all three
utilities that warrant additional time and factual developnrent. Published avoided cost rates For
Idaho Power Company. Rocky Mountain Power and Avista have long heen developed by
Commission staff using the SAR methodology in conjunction with the HIA Annual llnergy
Outlook Reference Case mountain gas lirrecast. lt would be a ma.ior change in ldaho's PURPA
policies, if ldaho Powcrns proposal is adopted and similar modified mcthodology is applied to
the other two utilities. lf thc PUC allows ldaho Power to use fior avoided cost purposes a gas
fbrecast other that the IlA reference case in order to be consistent with its IRP gas fbrecast. the
same rules would likely apply to other utilities' IR[] as well. Although PacifiCorp does not use
the EIA to forecast gas prices lor its IRP. its IRP gas price lbrecast is generally similar to the
EIA gas price forecast scenario (the ltigh Oil and Cas Resource and'l"echnology scenario) that
Idaho Pr:wer used fur its IRP. The resulting ellbct of aligning the gas price lbrecast for small QF
ar,,oided cost prices with the gas price fbrecast pmposed by the utilities tilr their IRP purposes
would be large reductions (approximately l5%) in avoided co$t prices. This type of permanent
and r-rotable change that applies to all three utilities should not be made on an expedited basis anel
without the ability of the parties to review and vet its t'actual underpinnings.
l"herefbre. i1'the Clommission is not inclined to hald a technical hearing or require any
technical evidence be presenteci by ldaho Power, Movants respecllully requesl at least 45 days
for initial comn:lents and 2l days for rebu(tal.
WHEREFORA. the J. R. Sinrplot Company. Renewahle l:nergy Coalition. and
'l"amarack Energy Partnership respectfully rcquest that this Comn"rission vacate its Notice of
Modified Procedure in this proceeding as detailed herein"
IjXPrlDIl'ED JOINT PROTEST AND JOINT MOTION IN OPPOSITION TO MODII:tL,D
PROCHDURE ANID JOINT"MOTION TO CONVNNE Tf;CI"INICAI. TIEARINC
PACI;]9
DATAD this 4th day of August 201 7
Pcter.l (lSB No.3l95)
Richardson Adams, PLLC
515 N.27ft Street
Boise, Idaho 83702
Telephone: [phone] I
Fax: [phone]
Attorney for the J. R. Simplot Company
Michael C, Creamer (lSB No. 4030)
Preston N. Carter (lSB No. 8462)
Givens Pursley LLP
601 W. Bannock St.
lloise. ID 83702
Telephone: (208)-388 -l 200
Facsimile: (208) -388- I 300
fbr'famarack Energy Partnership
M. Adams (lSB No. 7454\
Richardson Adams. PLLC
515 N. 27th Street
Boise. ID 83702
Telephone: 2A8.9382?3 6
Fax: [phone]
[e-mail]
t,ocal Counsel for Renewable Ilnergy Coalition
Irion Sanger
Sanger Law. P.C.
I I l7 SW 53'd Avenue
Portland, OR 97215
Attorney lbr Renewable Energy Coalition
EXPI'DI]'ED JOINI'PRO]"[SI"AND JOINT MOI'ION IN OPPOSII"ION TO MODIFIED
PROCEDURI] AND JOINT MOTION TO CONVENE'TECHNICAI, HEARTNC
PAGE IO
I
I ;,r i
C, Tom Arkoosh, ISB No. 2253
ARKOOSI"I LAW OFFICI]S
802 W. Banrrock Street. Suitc 900
P.O. Ilox 2900
Boise, ID 83701
I'elephone: [phone]
Facsimile: [phone]
Email: tom.arkoosh alkQosh.corn
Attorneys lbr Idahydro
N'TTIE MATTER OF I"I"IE APPLICAI"ION
OFTHE ANNUAL UPDATE TO
PUBLISHED AVOIDED COST RATES TO
REFLECT'AN UPDATED NATURAL GAS
PRICE FORECAST OF'fHE U.S. ENERGY
INITORMAI'ION AGI]NCY (EIA)
BEFORE TIIE IDAHO PUBLIC UTILITIES COMMISSION
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Case No. CNR-E-17-02
IDAHYDRO'S JOINDEIT IN
EXPEDITED JOINT PROTEST ANI)
JOIN'I'MO'TION IN OPPOSITION T0
MODI FI EI) PROCTiC LJRE ANT)
JOTNT MOTION TO CONVENE
"I'ECIINI CAL }I }:ARI NG
COMES NOVI the ldaho llydroelectric Power Producers "l'rust ("ldahydro"'), an
intervenor in the above matter, and hereby joins the Expedited .Joint Protest und Jetint Motictn in
Opposition to Modified Pr<tcedure and Joinl Molion to C'onvene Technical Hearing filed herein
on August 4, 2017. Idalrydro approved and consented to the Expcdited .loint Protest ancl ,loint
Motion in Opposition lo Moclified Procedure ancl Joint il{otion to (.'onvene 7'ec'hnical Ileuring.
but counsel u,as unavailable to sign the same. ldahydro hereby adopts and ratifies the lixpedited
Joint Protest ond .loint llotion in Opposition to Modi/ied Procedure and ,loint Motion to
Convene Technical l{earing as though the same were set forth herein in tull.
IDAIIYDRO'S JOINDl.ilt lN IiXPIIDITI:D JOIN1- PRO'l'l)S'l'AND J0IN]'M0'flON IN
OPPOSI'TION 1'O MODIIIIED PROCTJCTJRIi AND JOINT MO'I'ION'fO CONVb.NI'I'ECI{NICAL I"IEARINC * Page I
: 'ir.l
r
:fh' /'DATED this * day of August,20l7.
ARKOOS}I LAW OI]ITIC]I.]S
C.'l'om Arkoosh
Attorney for Idahydro
IDAI-IYDRO'S JOINDER IN EXPEDITED JOINT PROTES'T AND JOINT MOTION IN
OPPOSITION TO MODIF-IED PROCECURE AND JOINT MO'TION TO CONVENE
I'IICHNICAt. HEARING - Page 2
nvr' -
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mmh.
An TDACORP Company
DONOVAN E. WALKER
Lead Counsel
dwa I ker@i daho power.com
August 7 ,2017
VIA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington
Boise, ldaho 83702
Re: Case No. GNR-E-17-02
Review of Surrogate Avoided Resource (SAR) Methodology
Case No. IPC-E-17-07
Update to Published Avoided Cost Rates Based on the Updated Natural
Gas Price Forecast of the U.S. Energy lnformation Administration (ElA)
Dear Ms. Hanian:
Enclosed for filing in the above matters please find an original and seven (7)
copies of the Response to Expedited Protest and Motion of the Joint Parties and ldaho
Power Company's Motion for Clarification.
Ve ly yours,
(ill
Donovan E. Walker
DEW:csb
Enclosures
1221 W. ldaho St. (83702)
PO. 8ox 70
8oise. lD 83707
I
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
IN THE MATTER OF THE ANNUAL
UPDATE TO PUBLISHED AVOIDED
COST RATES BASED ON THE
UPDATED NATURAL GAS PRICE
FORECAST OF THE U.S. ENERGY
TNFORMATTON ADMTNTSTRATTON (ErA)
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTIL]TIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY TO
REVIEW THE SURROGATE AVOIDED
RESOURCE (SAR) METHODOLOGY
FOR CALCULATING PUBLISHED
AVOIDED COST RATES
CASE NO. GNR.E-17-02
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CASE NO. |PC-E-17-A7
RESPONSE TO EXPED]TED
PROTEST AND MOTION OF THE
JOINT PARTIES AND IDAHO
POWER COMPANY'S MOTION
FOR CLARIFICATION
ldaho Power Company ("ldaho Power" or "Company") hereby respectfully
submits the following response to the Expedited Joint Protest and Joint Motion in
Opposition to Modified Procedure and Joint Motion to Convene Technical Hearing filed
by J. R. Simplot Company ('Simplot"), Renewable Energy Coalition, and Tamarack
Energy Partnership (hereafter, "Joint Parties") on August 4, 2A17. Additionally, ldaho
Power herein respectfully moves the ldaho Public Utilities Commission ("Commission")
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION . 1
..t'-i li
for an order clarifying the scope of this proceeding and the issue or issues for
consideration contained therein.
ldaho Power agrees that Modified Procedure is appropriate for the Commission
to consider the limited issue that was initially raised by ldaho Power in its Response and
Objection to the natural gas forecast proposed by Commission Staff ("Staffl') in Case
No. IPC-E-17-07. However, if the Commission's intent is to conduct a proceeding with a
much broader scope regarding changes to the surrogate avoided resource ("SAR")
methodology, then a new matter supported by testimony and a technical hearing may
be appropriate.
l.
THE SCOPE OF THIS PROCEEDING IS PROPERLY LIMITED TO WHICH
SUBSET OF THE U.S. ENERGY INFORMATION ADMINISTRATION ("EIA"}
ANNUAL ENERGY OUTLOOK'S NATURAL GAS FORECAST IS APPROPRIATE
FOR IDAHO POWER IN THE 2017 ANNUAL UPDATE OF SAR PUBLISHED
AVOIDED COST RATES.
As referenced in ldaho Power's Response and Objection initially filed in Case
No. IPC-E-17-07
Prior to the ldaho Public Utilities Commission's
("Commission") Order No. 32697 (December 18, 2012), the
surrogate avoided resource ("SAR") avoided cost
methodology utitized the natural gas forecast published by
the Northwest Power and Conservation Council ("NPCC').
However, because updates to NPCC's forecast were
relatively infrequent in a volatile natural gas price market, the
Commission, with Order No. 32697, moved to annual natural
gas forecast updates using the EIA natural gas forecast.
The Commission directed, 'lT lS FURTHER ORDERED that
natural gas prices utilized in the SAR Methodology be
updated annually, on June 1 of each year, with the most
recent natural gas forecasts provided by EIA's Annual
Energy Outlook." Order No. 32697, p. 52; See a/so, Order
No. 32697, pp.7-1 1, 16.
pp.1-2
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION.2
ln each subsequent year thereafter, the Commission would update the SAR
avoided cost rates for each utility by initiating a case for each utility with a letter from the
Deputy Attorney General representing Commission Staff proposing the adjustment to
published avoided cost rates based upon the updated natural gas forecast from the EIA
Annual Energy Outlook. Staffs 2017 letter to the utilities states
In accordance with the methodology approved in Order No.
32697 , the "reference case" natural gas price forecast for the
Mountain Region's Electric Power sector included in EIA's
Annual Energy Outlook serves as the basis for computing
avoided cost rates. ln Order No. 32697, the Commission
also found that the final release of Annual Energy Outlook
automatically triggers a recalculation of the published
avoided cost rates. ln Order No. 32802, the Commission
clarified that an update should occur on June 1 or within 30
days of the final release of the Annual Energy Outlook,
whichever is later.
EIA released the Annual Energy Outlook 2017 on January 5,
2A17. Staff has used this forecast to compute the new
published avoided cost rates. A copy of the relevant natural
gas price forecast is attached.
Also attached are updated published avoided cost rates for
all three utllities. Please review the rates and file your
respective responses (either written or via e-mail) with the
Commission on or prior to June 10,2A17.
Letter from Daphne J. Huang, Deputy Attorney General, May 16,2017, p.2.
As evidenced in the above-quoted letter, the process utilized by the Commission
is that the annual update is an automatic recalculation of the published avoided cost
rates initiated by the final release by EIA of the Annual Energy Outlook natural gas
forecast. ln all prior years since 2012,ldaho Power has responded that it agrees with
the calculations performed by Staff. However, for this year's update, ldaho Power did
not agree, and thus filed its Response and Objection to Staffs proposed calculation.
ldaho Power's Response and Objection does not contest the underlying
methodology used to update SAR avoided cost prices with the most recent gas
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION .3
forecast, nor does ldaho Power's Response and Objection contest the SAR
methodology itself. Equally inapplicable is Simplot's claim that somehow issues related
to the prudence of energy conservation and demand-side management are relevant in
this proceeding. Petitions to intervene do not expand the issues in a case. ldaho
Power's Response and Objection points out that the Commission's prior orders directed
the use of "ElA's Annual Energy Outlook"l but did not further specify the data subset of
EIA's Annual Energy Outlook, and the Annual Energy Outlook contains several data
subsets. ldaho Power has not always used the EIA Annual Energy Outlook in its
lntegrated Resource planning process, but for the 2017 lntegrated Resource Plan
("lRP"), it does. The EIA Annual Energy Outlook natural gas forecast subset used by
ldaho Power in its 2017 lRP, updated with the January 2A17 EIA Annual Energy
Outlook, would result in published avoided cost rates that are approximately $B per
megawatt-hour lower than those proposed by Staff, and subsequently implemented by
the Commission, in the annual update based upon the Mountain Region subset of EIA's
Annual Energy Outlook. However, in both of those scenarios-that used by ldaho
Power's 2017 IRP and that used by Staff in IPC-E-17-07-the Commission's ordered
EIA Annual Energy Outlook is utilized.
Because the Commission has not specified which specific natural gas forecast is
to be used other than "ElA's Annual Energy Outlook" and both Commission Staff and
ldaho Power use a natural gas forecast from the 2017 EIA Annual Energy Outlook, the
issue and question raised by ldaho Power in its Response and Objection was and is
limited to the Commission's determination as to which subset of the EIA Annual Energy
Outlook is appropriate for use in the Commission's automatic annual recalculation of
' Order No. 32697, pp. 16, 52; Oder No. 32802, p. 3
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION - 4
published avoided rates for ldaho Power for the 2017 updale. ldaho Power has raised
no issue other than which EIA Annual Energy Outlook data subset is appropriate.
It should be noted that ldaho Power's Response and Objection is specific to
ldaho Power. The Commission opens a utility-specific case simultaneously for each
utility for the annual published avoided cost rate update. ln this instance, coincident
with the May 16, 2A17, initiating letter from the Deputy Attorney General, the
Commission initiated Case No. IPC-E-17-07 for ldaho Power, Case No. PAC-E-17-A5
for Rocky Mountain Power, and Case No. AVU-E-17-02 for Avista Utilities. ldaho
Power is not aware of whether the use of EIA's Annual Energy Outlook Mountain
Region subset natural gas forecast does or does not correspond to the other utilities'
updates, but ldaho Power does note that both Rocky Mountain Power and Avista
Utilities filed letters agreeing to Staffs calculated rates.
When contacted by counsel for Commission Staff regarding the process for
addressing ldaho Power's Response and Objection in Case No. IPC-E-17-07, counsel
for ldaho Power agreed that it would be fair for the Commission to take comments from
interested parties under Modified Procedure regarding the issue raised by ldaho
Power's Response and Objection, noting that neither party could recall any objection
beyond simple mathematical corrections being raised in relation to the annual SAR
published avoided cost rate updates in the past. However, ldaho Power is unclear, as
apparently are the Joint Parties, as to what the Commission intends with the treatment
of ldaho Power's Response and Objection in Case No. IPC-E-17-07, used as an
application to open a general case for all three utilities in Case No. GNR-E-17-02.
The proper scope of this proceeding is limited to the Commission determining
what EIA Annual Energy Outlook natural gas forecast should be applied to the SAR
published avoided cost rates for ldaho Power with the 2017 annual update. As stated,
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION .5
this is an automatic annual update, calculated and published by the Commission itself.
Neither the utilities nor the qualifuing facility parties conduct this calculation.
Commission Staff maintains the SAR model, conducts the published avoided cost rate
calculations for each utility, and the Commission publishes the rate tables itself. The
Commission would be well within its rights and authority to determine which EIA Annual
Energy Outlook natural gas forecast it intends to use, and publish its standard SAR
based rates accordingly with no further process and procedure under its previously
directed automatic update of published avoided cost rates. lf the Commission intends
some broader examination of the SAR methodology by use of the GNR-E-17-02 case,
ldaho Power respectfully asks for clarification as to what issues the Commission wishes
to examine with regard to the methodology. Depending upon the nature of such issues,
a proper determination can then be made as to whether it is appropriate to process
such a case by Modified Procedure or with testimony and a technical hearing
il.
THE COMMT$SION SHOULD VACATE ANp CTOSE CA9E NO. GNR-E-17-02
AN"pI:BOCEED pURSUANT TO MOprFtEp pRgpEPURq UNDER THE LtMtTEp
SCOPE OF IDAHO POWER'S RESPONSE AND OBJECTION TO STAFF'S USE
OF THE MOUNTAIN REGION SUBSET OF EIA'S ANNUALJNERGY OUTLOOK
NATURAL GAS FORECAST IN CASE NO. IPC.E.17.O7.
ldaho Power attempted to clarify with the parties that the scope of this matter did
not include a request to change the methodology, but was limited to the Commission's
determination as to the appropriate EIA Annual Energy Outlook natural gas forecast.
See the July 1 1, 2017, e-mail from Donovan E. Walker submitted as Attachment 1
hereto and incorporated herein by this reference.2 Mr. Richardson, on behalf of the
Joint Parties, replied that they agreed with ldaho Power's e-mail, but then proceeded to
misstate the scope as "input values to the avoided cost calculation." (July 12, 2017,
2 Also included in Attachment'l are the subsequent responses and e-mails from various parties"
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION - 6
e-mail from Peter Richardson, included in Attachment t hereto). ldaho Power stated in
its July 11 , 2017 , e-mail-and the Company maintains the position it expressed in 2A11
in Case No. GNR-E-11-O3-that use of the SAR methodology for the establishment of
proper avoided cost rates should be abandoned. However, the Company
acknowledges that the Commission rejected that position in Order No. 32697 from Case
No. GNR-E-11-03, and the Company's Response and Objection filed in this matterwas
and is not intended to challenge the methodology itself. As stated to the parties, should
the parties and the Commission wish to pursue a case about changing the SAR
methodology, ldaho Power's position in such a case would be to abandon the use of the
SAR methodology altogether. Attachment 1, July 1 1, 2017 e-mail from Donovan E.
Walker. ldaho Power does not believe that is the current scope of this proceeding, but
admittedly it is now somewhat unclear what the Commission's intent is as to the proper
scope of this proceeding given the treatment of ldaho Power's Response and Objection
as an application to open Case No. GNR-E-17-02.
Consequently, ldaho Power agrees with the Joint Parties that the Commission
should not only vacate the Notice of Modified Procedure issued in Case No.
GNR-E-17-02, but, further, ldaho Power proposes that the Commission should also
vacate the initiation of Case No. GNR-E-17-A2 and that portion of Order No. 33773
which directed, "lT lS FURTHER ORDERED that the Commission Secretary shall
accept ldaho Power's objection in this case [Case No. IPC-E-17-A7] as an application,
and open a separate generic case in which the Commission will issue notice of
application and a 14-day period for petitions to intervene therein." Order No. 33773, p.
3. ldaho Power proposes that the Commission clarify that the limited scope of this
proceeding is, as described above, limited to which subset of the previously ordered EIA
Annual Energy Outlook's natural gas forecast is appropriate for ldaho Power in the 2017
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION - 7
annual update of SAR published avoided cost rates. The Commission already has a
case which was opened and dedicated to the purpose of the annual update to ldaho
Power's published avoided cost rates, IPC-E-17-47, and ldaho Power's Response and
Objection could properly be processed by Modified Procedure comments from
interested parties within that case. Determination of this issue is neither "complex" nor
"factually intense," as maintained by the Joint Parties. lt is simply a matter of what the
Commission intends by use of "ElA's Annual Energy Outlook" in its annual automatic
recalculation of published avoided cost rates for ldaho Power. There has been no more
explanation offered for Commission Staffls use of the Mountain Region subset of EIA's
Annual Energy Outlook than there has been for any other subset, including the EIA
Annual Energy Outlook subset which ldaho Power has used for the 2017 lRP, which is
the process designed to look at the prudent acquisition of generation resources among
other things.
The Commission initiated a docket, Case No. IPC-E-17-07, with the title: Update
to Published Avoided Cost Rates to Reflect an Updated Natural Gas Price Forecast of
the U.S, Energy lnformation Administration (ElA), by letter from the Deputy Attorney
General. That letter provided Commission Staffs proposed updated published avoided
cost calculations for ldaho Power and stated, "Please review the rates and file your
respective responses (either written or via e-mail) with the Commission on or prior to
June 10,2017." Letterfrom DaphneJ. Huang, DeputyAttorneyGeneral, May 16,2017,
p. 2. ldaho Power had previously sent an e-mail to Staff raising the issue as to the
proper use of the 2017 EIA Annual Energy Outlook natural gas forecast3 and
subsequently filed its Response and Objection to Staff's proposed avoided cost rates on
May 24, 2017. lt naturally follows that it would be proper to process ldaho Power's
3 See Attachment 2 hereto, incorporated herein by this reference.
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION .8
Response and Objection in the case that was initiated for consideration of that particular
issue, and to which ldaho was directly responding.
il1.
CONCLUSION
ldaho Power respectfully asks the Commission to clarify the proper scope of this
matter. ldaho Power, as well as the Joint Parties, appear unsure and without sufficient
guidance and direction as to what the proper scope of this proceeding is and should be.
ldaho Power believes that the scope of this matter is limited to the narrow issue as to
which subset of the EIA Annual Energy Outlook's natural gas forecast is appropriate for
ldaho Power in the 2017 annual update of SAR published avoided cost rates. As such,
it should properly be pursued by Modified Procedure as an ongoing part of the case
initiated for that purpose, IPC-E-17-07, Should the Commission desire and intend a
broader proceeding that examines and/or challenges the methodology itself or as the
Joint Parties propose, the "input values to the avoided cost calculation" or the prudence
of energy conservation and demand-side management, then these issues should be
pursued separately from the annual update based upon EIA's Annual Energy Outlook
natural gas forecast for ldaho Power. Modified Procedure is appropriate for the narrow
scope of determining the proper subset of EIA's Annual Energy Outlook natural gas
forecast. lf, however, the Commission intends a broader scope, then it may be more
appropriate to have a more formal process and procedure including testimony and a
technical hearing.
Respectfully submitted this 7th day of August 2Afi .
DONOVAN E
Attorney for ldaho Power Company
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION T 9
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1l
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BEFORE THE
IDAHO PUBLIG UTILITIES COMMISSION
IDAHO POWER COMPANY
Walker Donovan
From:
Sent:
To:
Walker, Donovan
Tuesday, July 1 1, 2017 9:09 AM
'Daphne Huang'; MichaelAndrea, Tom Arkoosh; Sangerlaw; Peter Richardson;
[e-mail] ; Greg Adams
RE: GNR-E-I7-02, SAR avoided cost published rate reviewSubject:
Ail,
ldaho Power agrees that modified procedure is appropriate. There appears to have been some confusion, and so to
clarify, the Company's request in this matter is related to selecting the proper input, i.e., the appropriate EIA natural gas
forecast for the annual avoided cost update, and is not a reguest to change the methodology at this time.
Should the parties wish to pursue a case about changing the methodology, ldaho Powe/s position in such case would be
to abandon the use of the SAR methodology all-together. ldaho Power would agree that a case such as this would
require a full schedule of testimony and technical hearing. However, because our filing at present is limited to the
proper EIA gas forecast input, we believe modified procedure is appropriate for consideration of that issue.
Thanks,
Donovan E. Walker
LEAD COUNSEL
ldaho Power I Legal
208-388-53 17
From: Daphne Hua ng Imailto:Daphne.Huang@ puc.idaho.gov]
Sent: Monday, July 10,2017 11:23 AM
To; MichaelAndrea <[e-mail]>; Tom Arkoosh <[e-mail]>; SangerLaw
<[e-mail]>; Peter Richardson <[e-mail]>; [e-mail]; Walker, Donovan
<DWa [e-mail]>; Greg Adams <[e-mail]>
Subject: IEXTERNAL] GNR-E-17-02, SAR avoided cost published rate review
6ood morning,
Petitions have been granted for the following parties, whose representatives l've included in this email:
Avista
ldaHydro
Renewable Energy Coalition
Simplot
Tamarack Energy Partnership
Staff has conferred and proposes that we process the case by modified procedure. lf all are in agreement, we can
discuss a comment schedule. lf any party believes a process other than modified procedure is warranted, I will set up a
meeting for parties to confer in person and/or by telephone.
Please respond to all, indicating whether you agree with Staff s proposal of modified procedure, or if you believe a
conference is needed to discuss whether a technical hearing is appropriate.
Thank you,
Daphne Huang I Deputy Attorney General
Office of the Attorney General
l
I
I
ldaho Public Utilities Commission
472 W. Washington
P.O. Box 83720
Boise, ldaho 83720-007 4
Direct: [phone] | Fax: [phone]
[e-mail]
2
NOTICE: This email may be confidential, privileged, and exempt from public disclosure, and is intended for use only by
thenamedrecipient(s). lfyouarenottheintendedrecipient,thenyoumaynotuse,disclose,copy,ordistributethe
email or its contents. lf you believe you received this email in error, please immediately notify the sender and delete the
copy you received.
From
$ent:
To:
Peter Richardson <[e-mail]>
Wednesday, July 12, 2417 2'.U PM
Daphne Huang; MichaelAndrea; Tom Arkoosh; Sangerlaw; [e-mail];
Walker, Donovan; Greg Adams
IEXTERNAL] RE: GNR-E-17-A2, SAR avoided cost published rate reviewSubject:
l-hank you Daphne; all of the non-utility intervenors have conferred and we are in agreement that modified procedure is
not appropriate for this dockct. We believe there are significant technical and factual issues implicated such that a
technical hearing is warranted.
In fact, at least two of the parties have already retained an expert witness who has agreed to review the case and prepare
testimony (after an appropriate discovery opportunit,') for filing.
We do not believe a conf'erence is needed to discuss whelher a technical hearing is appropriate as rve are in unanimous
agreement that one is, indeed, appropriate. That said. obviously if Staff believes further discussion on this question is
B'arranted we are prepared to participate in an appropriately noticed prehearing conference to discuss. We are also
prepared to participate in a prehearing conference for establishing a schedule for discovery, prefiling testimony. rebunal
testimony and hearing dates.
Finally', as a point of clarification, we do agree with Donovan's email in which he states that this docket is not about
methodology. but is restricted to input values to the avoided cost calculation.
Peter Richardson
Richardson Adzuns" PLt.C
515 N.27th Street
Boise. Idaho 83702
[phone] office
(708) 867 -2021 cell
peterft)richardsonadam s. com
From: Daphne Huang Imailto:[e-mail]]
S€nt: Monday, July tO,2017 11:23 AM
To: MichaelAndrea <[e-mail]>; Tom Arkoosh <[e-mail]>; Sangerlaw
<[e-mail]>; Peter Richardson <[e-mail]>; [e-mail]; Walker, Donovan
<DWalker@ ldahopower.com>; Greg Adams <[e-mail]>
Subject: GNR-E-17-02, SAR avoided cost published rate review
Good morning,
Petitions have been granted for the following parties, whose representatives l've included in this email
Avista
ldaHydro
Renewable Energy Coalition
Simplot
Tamarack Energy Partnership
Staff has conferred and proposes that we process the case by modified procedure. lf all are in agreement, we can
discuss a comment schedule. lf any party believes a process other than modified procedure is warranted, I will set up a
meeting for parties to confer in person and/or by telephone.
Walker, Donovan
1
Please respond to all, indicating whether you agree with Staffs proposal of modified procedure, or if you believe a
conference is needed to discuss whether a technical hearing is appropriate.
Thank you,
Daphne Huang I Deputy Attorney General
Office of the Attorney General
ldaho Public Utilities Commission
472W. Washington
P.O. Box 83720
Boise, ldaho 83720-0074
Direct: [phone] | Fax: [phone]
d@
NOTICE: This email may be confidential, privileged, and exempt from public disclosure, and is intended for use only by
the named recipient(s). lf you are not the intended recipient, then you may not use, disclose, copy, or distribute the
email or its contents. lf you believe you received this email in error, please immediately notify the sender and delete the
copy you received.
7
IlYalker Donovan
From:
Sent:
To:
Peter Richard son < peter@richardsonada ms. com >
Wednesday, July 19, 2017 10:11 AM
Daphne Huang; MichaelAndrea; Tom Arkoosh; SangerLaw; [e-mail];
Walker, Donovan; Greg Adams; Preston N. Carter
IEXTERNALJ RE: GNR-E-17-02, SAR avoided cost published rate reviewSubject:
Rather than crowding the Commission's schedule with a formal motion on a process question, I think it would be
valuable to, as Daphne initially suggested, "l will set up a meeting for parties to confer".
Peter Richardson
Richardson Adams. PLLC
515 N.27th Street
Boise, Idaho 83702
[phone] office
[phone] cell
peter@ri chardsonadams. com
From: Daphne Huang Imailto:Da [e-mail]]
Sent: Wednesday, July 19,2Ol7 9:59 AM
To; Peter Richardson <[e-mail]>; MichaelAndrea <[e-mail]>; Tom
Arkoosh <[e-mail]>;SangerLaw <[e-mail]>; [e-mail]; Walker,
Donovan <[e-mail]>; Greg Adams <[e-mail]>; Preston N. Carter
< presto nca [e-mail]>
Subject: RE: GNR-E-17-02, SAR avoided cost published rate review
Preston Carter, for TEP, was inadvertently omitted from the email chain and has thus only recently been apprised of the
parties' positions on how to process this case.
To recap:
ldaho Power's filing specifically addresses the natural gas forecast input for the SAR avoided cost calculation,
and not the SAR methodology.
Staff, ldaho Power, and Avista believe the issue can be adequately addressed through comments in modified
procedure.
Simplot has represented that "all of the non-utility intervenors" agree a technical hearing is needed.
I suggested that Simplot file a joint motion requesting a technical hearing to which any party may respond. I
have not received a response.
Alternatively, I could put the question before the Commission based on the parties' informal
representations. Let me know how the parties wish to proceed.
Thank you,
Daphne
Daphne Huang I Deputy Attorney General
Office of the Attorney General
ldaho Public Utilities Commission
472W. Washington
P.O. Box 83720
Boise, ldaho 83720-0074
Direct: [phone] | Fax: [phone]
I
d a oh[e.huaItg@ puc. ida ho.eov
NOTICE: This email may be confidential, privileged, and exempt from public disclosure, and is intended for use only by
the named recipient(s). lf you are not the intended recipient, then you may not use, disclose, copy, or distribute the
email or its contents. tf you believe you received this email in error, please immediately notify the sender and delete the
copy you received.
From: Daphne Huang
Sent: Wednesday, July 72,20!7 4:34 PM
To:'Peter Richardson'<peter@fjchardslr.n_adams.com>; MichaelAndrea <[e-mail]>; Tom
Arkoosh <[e-mail]>; SangerLaw <[e-mail]>; [e-mail]; Walker,
Donova n <DWa lker@ lda hopowsl.cem>; Greg Adams <G res@ richa rdsonada m Lcom>
Subject: RE: GNR-E-17-02, SAR avoided cost published rate review
Thank you, Pete. t propose that Simplot file a joint motion to set a technical hearing, setting forth the reasons why the
agreeing-parties' positions cannot be adequately presented in comments.
Any opposing party may file an answer (we could agree to have such answers filed within 7 days?). The pleadings would
be put before the Commission as a matter in progress at a decision meeting.
Thoughts?
Daphne
From:PeterRichardson[mailto:peter@richards ms.com]
Sent: Wednesday, July 12,2017 2:34 PM
To: Daphne Huang <[e-mail]>; MichaelAndrea <[e-mail]>; Tom Arkoosh
<[e-mail]>; SangerLaw <!rion@Saneel:lAtu,cAm>; nf gc,@givenspursley.cgm; Walker, Donovan
< DWalker@ ldahopower.com>; Greg Adams <[e-mail]>
Subject: RE: GNR-E-17-02, SAR avoided cost published rate review
Thank you Daphne; allof the non-utility intervenors have conferred and we are in agreement that modified procedure is
not appropriate for this docket. We believe there are significant technical and factual issues implicated such that a
technical hearing is warranted.
In fact, at least two of the parties have already retained an expert witness who has agreed to review the case and prcpare
testimony (after an appropriate discovery opportunity') for filing.
We do not believe a conlerence is needed to discuss whether a technical hearing is appropriate as we are in unanimous
agreement that one is, indeed, appropriate. 1"hat said, obvir:usl.v- if Staff believes further discussion on this question is
warranted we are prepared to participate in an appropriately noticed prehearing conference to discuss. We are also
prepared to palticipate in a prehearing confbrence for establishing a schedule for discovery, prefiling testimony. rebuttal
testimony and hearing dates.
Finally, as a point of clarification, we do agree with Donovan's email in which he states that this docket is not about
methodology. bul is restricted to input values to the avoided cost calculation.
Peter Richardson
Richardson Adams, PLLC
515 N. 27th Sreet
2
Boise, Idaho 83702
[phone] olfice
[phone] cell
pe te r(Ori c hardso nad ams. conJ
From: Da phne H uang [ma i lto : Da ph ne, H ua ns@ puc. ida ho.gg_v]
Sent: Monday, July 10,2017 11:23 AM
To: MichaelAndrea <[e-mail]>; Tom Arkoosh <[e-mail]>; Sangerlaw
<[e-mail]>; Peter Richardson <[e-mail]>; [e-mail]; Walker, Donovan
<[e-mail]>; Greg Adams <[e-mail]>
Subject: GNR-E-17-02, SAR avoided cost published rate review
Good morning,
Petitions have been granted for the following parties, whose representatives l've included in this email:
Avista
ldaHydro
Renewable Energy Coalition
Simplot
Tamarack Energy Partnership
Staff has conferred and proposes that we process the case by modified procedure. lf all are in agreement, we can
discuss a comment schedule. lf any party believes a process other than modified procedure is warranted, I will set up a
meeting for parties to confer in person and/or by telephone.
Please respond to all, indicating whether you agree with Staffs proposal of modified procedure, or if you believe a
conference is needed to discuss whether a technical hearing is appropriate.
Thank you,
Daphne Huang I Deputy Attorney General
Office of the Attorney General
ldaho Pubtic Utilities Commission
472 W . Washington
P.O. Box 83720
Boise, ldaho 8372A-OO7 4
Direct: [phone] I Fax: [phone]
daphne.huang(opuc.idaho.gov
NOTICE: This email may be confidential, privileged, and exempt from public disclosure, and is intended for use only by
the named recipient(s). lf you are not the intended recipient, then you may not use, disclose, copy, or distribute the
email or its contents. lf you believe you received this email in error, please immediately notify the sender and delete the
copy you received.
3
I
I
I
i
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. GNR.E-17.02
IDAHO POWER COMPANY
ATTACHMENT 2
cAsE NO. IPC-E-17-07
Walker Donovan
From:
Sent:
To:
Cc:
Subject:
Darrington, Michael
Thursday, May 1 '1, 2017 4:38 PM
Polito, Michael; Walker, Donovan
Haener, Rick
FW: SAR ModelUpdate
From: Yao Yin Imailto:[e-mail]]
Sent: Thursday, May !1,2A17 3:56 PM
To: Darrington, Michael <M Darrington @ idahopower.com>
Cc: Randy Lobb <[e-mail]>; Youngblood, Mike <[e-mail]>; Mike Louis
<Mike. [e-mail] ho.gov>
Subject: IEXTERNAL] RE:SAR Model Update
Hello Michael,
Thanks so much for your email on the use of Mountain Region natural gas forecast in the SAR model. Since this is a
generic price forecast for all ldaho electric utilities, not just ldaho Power, we believe we should not change the forecast
unilaterally. But if ldaho Power would like to change the source of the forecast, it can file an application before the
Commission.
Thanks,
Yao Yin
utilities Analyst
ldaho Public Utilities Commission
Tel: [phone]
From: Darrington, Michael [ma ilto:M Darrineton @idahopower.com]
Sent: Thursday, May 4,2077 11.:20 AM
To: Yao Yin <Yao.Yin @puc.idaho.gqy>
Cc: Randy Lobb <[e-mail],o,sov>; Youngblood, Mike <[e-mail]>
Subject: SAR Model Update
Hi Yao,
ldaho Power anticipates that pursuant to IPUC Order No. 32697,Staff will soon be updating the Surrogate Avoided
Resource ("SAR") model with the updated Inergy lnformation Administration ("ElA") natural gas price forecast that was
released on January 5,2OL7 . Since the issuance of Order No. 32697, Staff has utilized the EIA forecast as an input to the
SAR methodology, and specifically applied the Mountain Region natural gas forecast under the table titled Electric
Prices: Energy Prices by Sector and Source.
ldaho Power understands that Order No. 32697 generically requires the use of the EIA forecasts as an input to the SAR
methodology, but that order and subsequent errata orders do not specify the data series that is to be applied to the SAR
methodology. ldaho Power is concerned that the use of the Mountain Region forecast is not a representative forecast
for natural gas prices as it represents pricing in a higher priced supply basin than where ldaho Power holds firm pipeline
1
capacity and performs natural gas transactions, and consequently its use unreasonably inflates the avoided cost prices
calculated under the SAR Methodology.
ln accordance with Commission orders, the lncremental Cost lntegrated Resource Plan ("lClRP") methodology utilizes
the natural gas price forecast that ldaho Power uses in its IRP process. The Company's IRP model uses the EIA natural
gas price forecast for Henry Hub, adjusted for pricing at Sumas and ldaho City Gate, where ldaho Power holds firm
pipeline capacity and does perform natural Bas transactions. Specifically, in the development of the 2017 lRP, ldaho
Power is using EIA's NaturalGas Spot Price at Henry Hub: High oiland gas resource and technology (nom S/MMBtu)
forecast. ldaho Power has presented this forecast at the IRP Advisory Council ("lRPAC") meetings, and believes the
forecast consists of a more accurate expectation of long term natural gas prices that are accessible to ldaho Power. As
presented at the Janua ry L2,2017 ,IRPAC meeting, and included below, analysis of this forecast demonstrates it follows
recent history and is in close alignment with ICE settled transactions, which are based on actual willing buyer/willing
seller transactions.
ldaho Power recommends that pursuant to Staff s update to the SAR methodology in accordance with Order No. 32697,
that Staff use the Natural Gas Spot Price at Henry Hub: High oil and gas resource and technology (nom S/MMBtu)
forecast, that is more applicable to prices that are based on real and expected natural gas prices. ldaho Power
appreciates your consideration of this suggestion and believes that using this forecast will result in the determination of
more appropriate published avoided cost pricing.
Henry Hub Natural Gas Prices (NominalS/mmbtul
Please contact me with any questions.
Sincerely,
Michael Darrington
ENERGY CONTRACTS
ldaho Power I Power Supply
Work 208-388-5946
Email mdarr [e-mail]
2
I
Walker Donovan
From:
Sent:
To:
Cc:
SubJect:
Darrington, Michael
Thursday, May 04, 2017 11:20 AM
Walker, Donovan; Polito, Michael
Youngblood, Mike
FW: SAR ModelUpdate
From: Darrington, Michael
Sent: Thursday, May 04,20L7 11:20 AM
To:'Yao Yin' <[e-mail]>
Cc:'[e-mail]'<[e-mail]>;Youngblood, Mike <[e-mail]>
Subject: SAR Modet Update
Hi Yao,
ldaho Power anticipates that pursuant to IPUC Order No. 32697, Staff will soon be updating the Surrogate Avoided
Resource ("SAR") model with the updated Energy lnformation Administration ("ElA") natural gas price forecast that was
released on January 5,2017. Since the issuance of Order No. 32697, Staff has utilized the EIA forecast as an input to the
SAR methodology, and specifically applied the Mountain Region natural gas forecast under the table titled Electric
Prices: Energy Prices by Sector and Source.
ldaho Power understands that Order No. 32697 generically requires the use of the EIA forecasts as an input to the SAR
methodology, but that order and subsequent errata orders do not specify the data series that is to be applied to the SAR
methodology. ldaho Power is concerned that the use of the Mountain Region forecast is not a representative forecast
for natural gas prices as it represents pricing in a higher priced supply basin than where ldaho Power holds firm pipeline
capacity and performs natural gas transactions, and consequently its use unreasonably inflates the avoided cost prices
calculated under the SAR Methodology.
ln accordance with Commission orders, the lncrementalCost lntegrated Resource Plan ("lClRP") methodology utilizes
the natural gas price forecast that ldaho Power uses in its IRP process. The Company's IRP model uses the EIA natural
gas price forecast for Henry Hub, adjusted for pricing at Sumas and ldaho City Gate, where ldaho Power holds firm
pipeline capacity and does perform natural gas transactions. Specifically, in the development of the 2017 lRP, ldaho
Power is using EIA's Natural Gas Spot Price at Henry Hub: High oil and gas resource and technology (nom S/MMBtu)
forecast. ldaho Power has presented this forecast at the IRP Advisory Council ("IRPAC") meetings, and believes the
forecast consists of a more accurate expectation of long term natural gas prices that are accessible to ldaho Power. As
presented at the Janua ry t2,2017,lRPAC meeting, and included below, analysis of this forecast demonstrates it follows
recent history and is in close alignment with ICE settled transactions, which are based on actual willing buyer/willing
seller transactions.
ldaho Power recommends that pursuant to Stal?s update to the SAR methodology in accordance with Order No. 32697,
that Staff use the Natural Gas Spot Price at Henry Hub: High oil and gas resource and technology (nom S/MMBtu)
forecast, that is more applicable to prices that are based on real and expected natural gas prices. ldaho Power
appreciates your consideration of this suggestion and believes that using this forecast will result in the determination of
more appropriate published avoided cost pricing.
I
Henry Hub ltlatural 6as Prices {Nominal $lmmbtu}
-
Please contact me with any questions.
Sincerely,
Miehael 0arrington
ENERGY CONTRACTS
ldaho Power lPower Supply
Work 208-388-5946
Email mdirri nqlqn@idahooowel-qgm
2
liivrsra
Avista Corp.
l41l East Mission P.O. Box 3727
Spokane. Washington 99220-0544
Telephone [phone]
Toll Free 800-727-9174
August 7,2017
State of ldaho
Idaho Public Utilities Commission
472W. Washinglon St.
Boise, ID 83702-5983
I
:.:l
',1
Attention: Ms. Diane Hanian, Secretary
Re: GNR-E-17-02 Avista Response to Motion
Dear Ms, Hanian:
Enclosed for filing with the Commission is Avista Corporation's Response to Motion in
Case No. GNR-E-17-02. Please direct any questions on this matter to Michael Andrea at 509-
495 -2564 or gr iqhael.nndrea{S.avistacorp.com.
Sincerely,
/r/ Luln"qrQe,nta,i*
Linda Gervais
Sr. Manager, Regulatory Policy
Avista Utilities
I inda. {rervai s@avi stacsrp.com
Michael G. Andrea (lSB No. 8308)
Senior Counsel
Avista Corporation
l4l I East Mission, MSC-23
Spokane, WA99202
Phone: (509\ 495-2564
Facsimile: (509) 777 -5468
Email : [e-mail]
Attorney lbr Avista Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MA]TER OT THE APPLICAI'ION
OT IDAHO POWER COMPANY TO REVIEW
]"HE SURROGATE AVOIDED RESOURCE
(sAR) METHODOLOGY FOR
CALCULATING PUBLISHED AVOIDED
COST RATES
NO. CNR-E-I7-02
ANSWER OF AVIST'A
CORPORATION TO EXPEDITED
PROTESTAND MOTION OF TTIE
JOTNT PARTIES
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Pursuant to the Idaho Public Utilities Commission's ("Commission") Rules of
Procedure 256, Avista Corporation ("Avista") hereby respectfully submits the following
response ("Response") to the Expedited Joint Protest and Joint Motion in Opposition to
Modifled Procedure and Joint Motion to Convene Technical Hearing ("Joint Protest and
Motion'") filed by J.R. Simplot Company'. Renewable Energy Coalition, and Tamarack
Energy Partnership (hereafter, "Joint Parties") on August 4,2017, in the above-captioned
matter. I
The Joint Parties request that the Commission vacate the Notice of Modified
Procedure issued in this proceeding and requesl that the Commission set this proceeding
ronAugust 7,2017,ldaho Hydroelectric Power Producers Trust ("ldahydro") filed a joinder in
the Joint Protest and Motion.
Page - I ANSWER OF AVISTA CORPORATION TO EXPEDITED PROI'ESI-ANI)
MOTION OF TT"IE JOINT PARTIES
i
for a technical hearing.2 In the Joint Parties' view, modified procedure is not appropriate.
in large part, because "the issues presented are complex and potentially controverted such
that written submissions, by attomeys, willnot be sufficient to create an adequate record
upon which a decision can be rendered in the public interest"3 and the Commission "has
not provided the parties with any idea of what it is 'considering' nor any idea of w'hat it
'proposes to do."'4 As discussed herein, the Joint Parties' arguments are without merit.
More llndamentally, to the extenl the Joint Parties feel that a hearing is required. the
Commission provided a process flor requesting such a hearing: "Persons desiring a
hearing must specifically request a hearing in their written comments."s Accordingly, the
Joint Protest and Motion should be rejected.
I. The Issue in this Proceeding is Clearly Defined and the Joint Protest and
Motion Should be Rejected.
In the Joint Protest and Motion, the Joint Parties argue that modified procedure is
not appropriate. in large part. because "the issues presented are complex and potentially
controverted such that written submissions, by attomeys, will not be sufficient to create
an adequate record upon which a decision can be rendered in the public interest"c and the
Commission "has not provided the parties with any idea of what it is'considering'nor
any idea of what it'proposes to do."'7 In the Notice of Moditied Procedure, the
Commission clearly stated that "the sole issue is whether the Commission should use the
EIA's Henry Hub fiorecast instead of the EIA's Mountain Region fbrecast in calculating
r Joint Protest and Motion at 2.I Joint Protest and Motion at 2.I Joint Protest and Motion at 5.
5 order No. 3383 I at page l.
" Joint Protest and Motion at 2.
? Joint Protest and Motion at 5.
Page - 2 ANSWER OF AVISTA CORPORAI'ION TO EXPEDII"IID PROTEST AND
MOTION OF THE JOINT PARTIES
I
published avoided cost rates each year."8 Accordingly, contrary to the Joint Parties
argument, the issue is clearly stated and all panies are on notice of precisely what the
Commission is considering and what it proposes to do. To be sure, it is difficult to imagine
how the Commission could have been any clearer in stating the issue in this proceeding.
Interestingly, nowhere in the Joint Protest and Motion do the Joint Parties acknowledge the
Commission's clear statement of the issue.e
The Joint Parties attempt to convolute the issue by purporting that the issues have
been expanded in this proceeding beyond the single issue clearly articulated by the
Commission. Specifically. the Joint Parties note that J.R. Simplot Company petitioned to
intervene and noted in its intervention that "ldaho Power's Objection raises issues associated
not only with avoided cost pricing per se, but also with the prudence determination of the
Company's energy conservation and demand response programs."r0 Apparently. it is Joint
Parties' view that, since ldaho Power did not object to J.R. Simplot's Petition to lntervene on
grounds that such petition resulted in an expansion of the issues. the issues in this proceeding
"extend beyond just the proper natural gas forecast to be used in determining the avoided cost
rates Idaho Power pays pursuant to its obligations under PURPA."rr Again. the Joint Parties
ignore the Commission's clearly articulated statement of the issue in this proceeding in what
appears to be an attempt to expand the scope of this proceeding.
The issue in this proceeding is clearly stated. The Joint Parties' arguments that
modified procedure is inappropriate in this proceeding (either because it violates Commission
policy or is not in the public interest) are without merit. The Joint Parties Joint Protest and
Motion should be rejected. The issue in this proceeding-i.e.. whether the Commission
t Order No. 3383 I at page l.
E See generally Joint Protest and Motion.
ro Joint Protest and Motion at 6.
rr Joint Protest and Motion at 6.
Page - 3 ANSWER OF AVISTA CORPORATION TO EXPEDITED PROTEST AND
MOllON OF THE JOINT PAR IES
should use the EIA's Henry Hub forecast instead of the EIA's Mountain Region forecast in
calculating published avoided cost rates each yearr2*should be resolved in accordance with
the procedure set forth in the Commission's Notice of Modified Procedure issued in this
proceeding. Any affempt to expand the scope of this proceeding should be rejected. To the
extent that the Joint Parties desire a hearing they can request such hearing in their comments
as required by the Notice of Modified Procedure issued by the Commission.r3
II. Conclusion
'Ihe proper scope of this proceeding is limited to the Commission determining
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.ra 'l'he
Commission should object any attempt to expand the scope of this proceeding beyond
resolution of that clearly stated issue. Resolution of the clearly stated issue is appropriately
resolved through modified procedure. Accordingly, the Commission should reject the Joint
Parties Joint Protest and Motion and process this proceeding in accordance with the Notice of
Modified Procedure issues in this proceeding.
Respectfully submitted this 7th day of August 2017.
AVISTA CORPORATION
MichaelG. Andrea
Senior Counsel
rr Order No. 3383 I at page l.
13 Order No. 3383 I at page 3.
IOrderNo.33831 atpage I (stating"the sole issue [in this proceeding] is whetherthe
Commission should use the EIA's Henry Hub forecast instead of the HIA's Mountain Region
fbrecast in calculating published avoided cost rates each year.").
Page - 4 ANSWER OF AVISTA CORPORATION TO EXPEDITED PRO'IEST AND
MOTION OF TI]E JOINT PARTIES
I
DAPHNE HUANG
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-A07 4
[phone]
IDAHO BAR NO. 8370
Street Address for Express Mail:
472 W . WASHTNGTON
BOISE, IDAHO 83702.59I8
Attorney for the Commission StatT
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY TO
REVIEW THE SURROGATE AVOIDABLE
RESOURCE (SAR) METHODOLOGY FOR
CALCULATING PUBLISHED AVOIDED
COST RATES
CASE NO. GNR-T,.17.02
STAFF ITESPONSE TO
SIMPLOT'S JOINT EXPEDITED
MOTION
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This case was initiated after Idaho Power objected to Commission StafI's proposed 2017
annual update to published avoided cost rates for contracts entered between Idaho's electric
utilities and qualifying fhcility (QF) projects under the Public Utility Regulatory Policies Act
(PURPA). Idaho Power asserted that Staff should have used the EIA's Henry Hub forecast
rather than the EIA's Mountain Region forecast in making its calculations. 'fhe Commission
approved Staff s proposal as reasonable, but directed the Commission Secretary to accept Idaho
Power's objection as an application to initiate a generic proceeding to consider ldaho Power's
proposed change, Order Nos. 33773,33778 (Notice of generic proceeding). 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 l"amarack Energy Partnership (TEP). Order Nos. 33788,33794,33802, 33807,
33809.
On August 2,2017, the Commission issued Notice that it was appropriale to process the
case by Modified Procedure. The Commission noted that the parties had informally conferred
STAFF RESPONSETO SIMPLOT'S
JOTNT EXPEDITED MOTION AUGUS'r 9,2017I
and did not agree how to process the case. Order No. 33831 at l. However, no party filed a
motion per Rule 202 stating "reasons why modified procedure should not be used." Id. atl. On
August 4,2017, Simplot filed an expedited joint protest and joint motion opposing the
Commission's order, and jointly requesting a technical hearing.
A. Simplot's joint expedited motion for technical hearing
Simplot, joined by REC, TEP, and (by later joinder) Idahydro (together, "Movants"), &sk
the Commission to vacate its Notice of Modified Procedure, and to schedule technical hearings
in this case. Motianal2; Idahydro Joinder. Movants did not request oral argument, but ask that
the Commission issue a decision on their request "within seven days of this filing." Motion at 2.
They state there is "good cause" for an expedited ruling "to prevent the premature efforts in
preparation of comments that would otherwise be due . . . August 23,7017." Id. at2-3. Movants
note they made good faith efforts to notify all parlies of their expedited request before filing the
motion. ^k/.
In arguing that modified procedure is inappropriate in this case, Movants assert that the
Commission's Notice of Modified Procedure "has not provided the parties with any idea of what
it is 'considering' nor any idea of what it 'proposes to do."' Id. at 4-5 (citing Order No. 32212 at
10, in which the Commission found modified procedure was appropriate, and fbrmal hearing
unnecessary, to process a case addressing avoided cost issues under PURPA). Movants further
assert that modified procedure in this case is not in the public interest because the "'issues
presented' are vague and undefined." Icl. al6.
According to Movants, Simplot petitioned to intervene, "noting that Idaho Power's
Objection raises issues associated not only with avoided cost pricing per se, but also with the
prudence determination of the Company's energy conservation and demand response programs."
/r/. Because "ldaho Power did not object to [Simplot's] Petition to Intervene, . . . the issues in
this docket clearly extend beyond just the proper natural gas forecast to be used in determining
avoided cost rates." 1d.
Movants also argue that a 2l-day comment period is inadequate, citing that discovery
from Movants and Staff is not yet complete. Id. at8. Movants request "at least 45 days for
initial comments and 2l days for rebuttal." Id. al 9,
S]'AFF RESPONSETO SIMPLOT'S
JOINT EXPEDITED MO"|ION 2 AUGUST 9,2417
B. Idaho Power's response
Idaho Power filed a response objecting to Movants' request for technical hearing in this
case. According to Idaho Power, the "proper scope of this proceeding is limited to the
Commission determining what EIA Annual Energy Outlook natural gas forecast should be
applied to the SAR published avoided cost rates for ldaho Power with the 2017 annual update."
Idaho Power Response at 5, 9. Idaho Power states, "[t]he Comrnission would be well rvithin its
rights and authority to determine which EIA Annual Energy Outlook natural gas forecast it
intends to use, and publish its standard SAR based rates accordingly with no lurther process and
procedure under its previously directed automatic update of published avoided cost rates." ld at
6. Flowever, ldaho Power states it is unclear "as to what the Commission intends with the
treatment of ldaho Power's Response and Objection in Case No. IPC-E-17-07, used as an
application to open a general case for all three utilities" in this case. Id. at 5. Idaho Power states,
"if the Commission's intent is to conduct a proceeding with a much broader scope regarding
changes to the surrogate avoided resource ("SAR") methodology, then a new matter supported
by testimony and a technical hearing may be appropriate ." Id, at 2.
Idaho Power recommends that the Commission vacate and close this matter, and reopen
IPC-E-17-07. Id. at 8-9. In that case, the Commission entered Final Order No. 33773 approving
Staff's proposed annual SAR avoided cost rates fur Idaho Power. Iel. ldabo Power proposes that
its objection be processed (presumably after first vacating Final Order No. 33773) by modified
procedure under that docket, Case No. IPC-E-n-A7.
C. Avista's response
Avista also tlled a response objecting to Movants' requests. Avista asserts Movants'
arguments that modif'red procedure is inappropriate are without merit. Avista Response at 3. If a
party feels a hearing is required, it "must specifrcally request a hearing in their written
comments." ld. at 2 (quoting Order No. 33831 at 1). Avista also notes that the Commission has
stated "the sole issue is whether the Commission should use the EIA's I-lenry Hub forecast
instead of the EIA's Mountain Region forecast in calculating published avoided cost rates each
year." Id. at2-3 (quoting Order No. 33831 at I ). Avista challenges Movants' attempt, through
its intervention, to expand the issues in the proceeding "beyondjust the proper natural gas
STAFF RESPONSETO SIMPLOT'S
JOINT EXPEDITED MOTION 3 AUGUST9,2017
forecast to be used in deterrnining . . . avoided cost rates," ignoring the Commission's "clearly
articulated statement of the issue in this proceeding." Id. at3.
D. Commission StafPs response
As an initial matter, Staff agrees that the sole issue in this case, as articulated by the
Commission in Order No. 33831, is whether the Commission should use the EIA's Henry Hub
Ibrecast instead of the EIA's Mountain Region forecast in its annual published avoided cost rate
calculations. Staff notes that under Rule 74, the Commission willgrant intervention if doing so
will "not unduly broaden the issues" and may grant intervention "subject to reasonable
conditions." IDAPA 31.01.01.074. Staff recommends that the Commission reaffirm the scope
of the case and clarily that intervenors are limited, per Rule 74,1o the one identified issue,
As to Movants'request to set a technical hearing, Staff does not oppose it, with the
understanding that the only issue in the case is which subset of the EIA's naturalgas forecast
should be used in Staff's calculations of SAR published avoided cost rates. Nonetheless, Staff
believes it can adequately present its position on the identified issue through modified procedure
and has no objection to the extended comment deadlines proposed by Movants in the event the
Commission keeps modified procedure in place. In fact, due to heavy caseloads and overlapping
dcadlines, if the Commission proceeds in this case by modified procedure, Staffasks that the
deadlines be set at 45 days from the date of the Commission's order on this motion for
comments, and 2l days after the comment deadline fur a reply, if any.
As to Idaho Power's recommendation that the Commission close this docket and reopen
Case No. IPC-E- l 7 -07 to address the Company's objection in that case, Staff does not agree.
Staff has always used the same EIA firrecast in calculating SAR avoicled cost rates fbr all three
utilities. Any change to a calculation input for one utility may impact the other utilities. 'fhis is
rvhy, when Idaho Power requested a change to the natural gas forecast input, Staffrecommended
that the Commission open a generic case - to permit the other utilities to weigh in. Staff believes
this generic proceeding will allow the Commission to decide - in one proceeding, implemented
at the same time - rvhether to change the natural gas forecast Staff uses in calculating SAR
avoided cost rates for ldaho Power, Avista, and PacifiCorp.
In summary, Staff asks that the scope of the case be limited to "whether the Commission
should use the EIA's Henry Hub forecast instead of the EIA's Mountain Region forecast to
STAFF RESPONSETO SIMPLOT'S
JOINT EXPEDITED MOTION 4 AUGUST 9,2017
calculate published avoided cost rates each year." Order No. 33831 at2. If the Commission
denies Movants' request to vacate Order No. 3383 I (Notice of Modified Procedure), Stafl asks
that the Commission extend deadlines to 45 days from the date of its order on this motion for
comments, and 21 days from the comment deadline for replies, if any. Finally, Staff
recommends that the Commission deny Idaho Power's request to vacate this docket.
Dated at Boise, Idaho, this 'ft dayofAugust2olT.
Deputy Attorney General
Umisc/CommentVgnrc I 7.2djh
STAFF RESPONSETO SIMPLOT'S
JOINT EXPEDITED MOTION 5 AUGUST 9,2017