20200416Notice_of_Application_Order_No_34628.pdf

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34628 1
Office of the Secretary
Service Date
April 16, 2020
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE ANNUAL
UPDATE TO “SURROGATE AVOIDED
RESOURCE” AVOIDED COST RATES
)
)
)
)
)
)
)
)
)
CASE NO. GNR-E-20-01

NOTICE OF APPLICATION

NOTICE OF
MODIFIED PROCEDURE

ORDER NO. 34628

On April 14, 2020, Commission Staff presented a Decision Memo at the Commission’s
regularly scheduled Decision Meeting recommending the Commission utilize a more formal
process to update natural gas price forecasts for the Surrogate Avoided Resource (“SAR”) method.
This Commission has developed the SAR method for determining published avoided cost rates for
eligible qualifying facilities (“QFs”) under the Public Utility Regulatory Policies Act of 1978
(“PURPA”) for all three major Idaho electric utilities; PacifiCorp dba Rocky Mountain Power
(“Rocky Mountain Power”), Avista Corporation (“Avista”), and Idaho Power Company (“Idaho
Power”).
The Commission approved Staff’s recommendation to formalize this annual update
going forward. For purposes of this docket, Staff’s Decision Memo will operate as its Application
to the Commission to initiate its annual review. Subsequent annual SAR updates will be initiated
with an Application to the Commission. Despite the change in procedure to allow for better
tracking and transparency, this update is still intended to be a simple arithmetic calculation to an
established methodology.
We now issue this Notice of Application and Notice of Modified Procedure
establishing comment deadlines.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that pursuant to PURPA and the implementing
regulations of the Federal Energy Regulatory Commission (“FERC”), the Idaho Public Utilities
Commission (“Commission”) has approved the SAR method to calculate published avoided cost
rates for eligible QFs for all three major Idaho electric utilities. Published avoided cost rates are
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34628 2
the purchase price paid for energy and capacity to QFs who meet project eligibility size
requirements for the resource type, as established by the Commission. The method to calculate
the published avoided cost rates was established in GNR-E-11-03. Order Nos. 32697, 32802.
YOU ARE FURTHER NOTIFIED that the Commission’s SAR model currently uses
a natural gas combined cycle combustion turbine as the surrogate resource for determining the
avoided cost of energy and capacity. Because published avoided cost rates are based on the costs
that would be incurred by a natural gas facility, the natural gas price forecast is a key input in the
SAR model. In accordance with the method approved in Order No. 32697, the “reference case”
natural gas price forecast for the Mountain Region’s Electric Power sector included in the U.S.
Energy Information Administration (“EIA”) Annual Energy Outlook is used to calculate published
avoided cost rates.
YOU ARE FURTHER NOTIFIED that the annual release of a new natural gas price
forecast by the EIA triggers an updated calculation of avoided cost rates. Order No. 32697. In
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. The EIA released the
Annual Energy Outlook 2020 on January 29, 2020. Staff has incorporated this forecast into the
new model. The updated calculations form the underlying record in this case.
YOU ARE FURTHER NOTIFIED that with this Notice, the Commission seeks
comment on whether the updated natural gas price forecast has been correctly incorporated into
the SAR model.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that Staff has incorporated the EIA “reference case”
natural gas price forecast for the Mountain Region’s Electric Power sector into the existing SAR
model.
YOU ARE FURTHER NOTIFIED that supporting documents for the update to the
SAR model, including a copy of the EIA “reference case” natural gas price forecast for the
Mountain Region’s Electric Power sector, the updated avoided cost rates as calculated by Staff,
and the SAR model are available on the Commission’s web site at www.puc.idaho.gov by clicking
“Electric” then “Open Cases” then selecting the case number at the top of this document and then
looking in “Case Files.”
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34628 3
YOU ARE FURTHER NOTIFIED that for a new 20-year contract with levelized rates
with Idaho Power for a QF that comes online in 2020, the update will result in rates that are 11%
to 17% lower than those previously approved, depending on the type of QF.
YOU ARE FURTHER NOTIFIED that for a new 20-year contract with levelized rates
with Rocky Mountain Power for a QF that comes online in 2020, the update will result in rates
that are 12% to 17% lower than those previously approved, depending on the type of QF.
YOU ARE FURTHER NOTIFIED that for a new 20-year contract with levelized rates
with Avista for a QF that comes online in 2020, the update will result in rates that are 14% to 17%
lower than those previously approved, depending on the type of QF.
YOU ARE FURTHER NOTIFIED that Staff requested the Application be processed
by Modified Procedure.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission's jurisdiction under Title 61 of the Idaho Code and specifically Idaho
Code §§ 61-501, 61-502 and 61-503.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission's Rules of Procedure, IDAPA 31.01.01.000 et seq.
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter, and that it will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the 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 written comment must contain
a statement of reasons supporting it. Persons desiring a hearing must specifically request a hearing
in their written comments. Written comments concerning this docket shall be mailed to the
Commission and the companies at the addresses reflected below:

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34628 4
For the Idaho Public Utilities
Commission:

Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
Street Address for Express Mail:

11331 W. Chinden Blvd.,
Building 8, Suite 201-A
Boise, ID 83714

E-Mail: [e-mail]
For Idaho Power Company:

Donovan E. Walker
Michael Darrington
Idaho Power Company
1221 West Idaho Street 83702
P.O. Box 70
Boise, ID 83707-0070

E-Mail: [e-mail]
[e-mail]
[e-mail]
[e-mail]

For Avista:

Michael Andrea
Clint Kalich
Avista Utilities
1411 E. Mission
P.O. Box 3727
Spokane, WA 99220-3727

E-Mail: [e-mail]
[e-mail]

For Rocky Mountain Power:

Ted Weston
PacifiCorp dba Rocky Mountain Power
1407 West North Temple, Suite 330
Salt Lake City, UT 84116

Daniel MacNeil
PacifiCorp dba Rocky Mountain Power
825 NE Multnomah Street
Portland, OR 97232

E-Mail: [e-mail]
[e-mail]

Comments must contain the case caption and case number shown on the first page of this
document. Persons desiring to submit comments electronically may do so by accessing the
Commission’s home page located at www.puc.idaho.gov. Click the “Case Comment Form” under
“Consumers” and complete the form using the case number as it appears on the front of this
document. These comments must also be sent to the utility or utilities to which the comment
pertains.
YOU ARE FURTHER NOTIFIED that Idaho Power, Avista, and Rocky Mountain
Power must file comments stating whether Staff correctly captured and calculated the updated
natural gas price forecast for their company. These comments must be filed within twenty-one
(21) days from the service date of this Notice.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34628 5
YOU ARE FURTHER NOTIFIED that interested persons must file any reply
comments within twenty-eight (28) days from the service date of this Notice.
YOU ARE FURTHER NOTIFIED that if no written comments or protests 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 are received within the time limit set, the
Commission will consider them and, in its discretion, may set the same for a formal hearing.
ORDER
IT IS HEREBY ORDERED that the annual update to the SAR method to incorporate
the most recent natural gas forecast be processed by Modified Procedure, Rule 201-204 (IDAPA
31.01.01.201-.204). Persons interested in submitting written comments, and Idaho Power, Avista,
and Rocky Mountain Power, must submit their comments within 21 days from the service date of
this Notice. Interested persons must file any reply comments within 28 days from the service date
of this Notice.
IT IS FURTHER ORDERED that parties continue to comply with Order No. 34602,
issued March 17, 2020. All pleadings should be filed with the Commission electronically and shall
be deemed timely filed when received by the Commission Secretary. See Rule 14.02. Service
between parties should also be accomplished electronically. Voluminous discovery-related
documents may be filed and served on CD-ROM or a USB flash drive.
///
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34628 6
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this day of
16th April 2020.

PAUL KJELLANDER, PRESIDENT

KRISTINE RAPER, COMMISSIONER

ERIC ANDERSON, COMMISSIONER

ATTEST:

Diane M. Hanian
Commission Secretary

I:\Legal\ELECTRIC\GNR-E-20-01\GNRE2001_ntc app_mod_ej.docx