GNR-E-02-01.pdf

NOTICE OF INVESTIGATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE 1
Office of the Secretary
Service Date
February 5, 2002
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE INVESTIGATION
OF THE CONTINUED REASONABLENESS
OF CURRENT SIZE LIMITATIONS FOR
PURPA QF PUBLISHED RATE
ELIGIBILITY (i.e., 1 MW) AND
RESTRICTIONS ON CONTRACT LENGTH
(i.e., 5 YEARS).
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CASE NO. GNR-E-02-01

NOTICE OF INVESTIGATION

NOTICE OF MODIFIED
PROCEDURE

NOTICE OF COMMENT/
PROTEST DEADLINE

Congress in 1978 as part of the National Energy Act and as part of a package of
legislation designed to address the then prevailing nationwide energy crisis passed the Public
Utility Regulatory Policies Act (PURPA). Its purpose was to encourage the promotion and
development of renewable energy technologies as alternatives to fossil fuels and the construction
of new generating facilities by electric utilities. PURPA requires that electric utilities offer to
purchase power produced by cogenerators or small power producers that obtain qualifying
facility (QF) status.
The rate to be paid for QF power is not to exceed the “incremental costs” to the
utility of alternative electric energy. Under the implementing rules and regulations of the
Federal Energy Regulatory Commission (FERC) the rate a qualifying facility receives for the
sale of its power is generally referred to as the “avoided cost” rate and should reflect the
incremental cost to an electric utility of electric energy or capacity or both, which, but for the
purchase from the qualifying facility, such utility would generate itself or purchase from another
source. PURPA and related FERC regulations provide that the rates for QF purchases (1) shall
be just and reasonable to the electric consumers of the electric utility and in the public interest,
and (2) shall not discriminate against qualifying cogenerators or small power producers.
FERC promulgated the general scheme and rules, but left implementation to the
regulatory authorities of the individual states. Under FERC rules and regulations, published
rates are required only for purchases from qualifying facilities with a designed capacity of 100

NOTICE OF INVESTIGATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE 2
kilowatts (kW) or less. Reference 18 C.F.R. § 292.304(c). PURPA, however, does not prohibit
the publishing of rates for larger projects. In its discretion, this Commission has set the design
capacity limit for published rates at 1 megawatt (MW). A special hearing to establish and
approve such rates is required. Rates and contracts for facilities larger than 1 MW are to be
individually negotiated. FERC establishes no requirement regarding length of contract.
In comments filed in Idaho Power Company Case No. IPC-E-01-37, the J.R. Simplot
Company petitioned the Commission to revisit and review two issues, i.e., (1) the size of QF
projects entitled to published avoided cost rates and (2) contract length. Simplot asks that the
Commission re-examine the basis for its decisions to limit published rates to QFs smaller than 1
MW in size and set the required contract term at five years.
In Order No. 25884, Case No. IPC-E-93-28, the Commission found that there was a
widely held expectation that there would be increasing competition within the electric utility
industry. The Commission also found that ratepayers should be indifferent to whether a resource
serving them was constructed by a utility or an independent developer. The cost and quality of
service provided by either should be the same. Simplot contends that competition in the electric
industry in Idaho is very unlikely in the foreseeable future and that such a rationale for limiting
the size of QFs to 1 MW for published rates, is no longer compelling or an eventuality. Order
No. 25884 pp. 3-4. Simplot also questions whether ratepayers have been held indifferent.
Simplot proposes that QF developers up to 10 MW in size should have access to published SAR
based avoided cost rates. Simplot also advocates reinstatement of the 20-year contract as
necessary for the QF industry to be able to assist the State’s regulated electric utilities in
providing the capacity and energy they need.
Simplot requested that the Commission (1) expand entitlement to the Commission’s
published avoided cost rates to all QFs that are 10 MW or less in capacity and (2) increase the
standard PURPA contract length for all QFs 10 MW or less in capacity from 5 to 20 years, with
the QF developer retaining the right to choose the term up to 20 years.
The Commission in its Order No. 28945 in Case No. IPC-E-01-37 found the issues of
contract length and size limitation raised by Simplot to be important issues meriting a separate
forum or docket for discussion.

NOTICE OF INVESTIGATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE 3
Accordingly, YOU ARE HEREBY NOTIFIED that the Commission has initiated
this generic docket and is soliciting comments on the continued reasonableness of current QF
size limitations for published rate eligibility (i.e., 1 MW) and restrictions on contract length (i.e.,
5 years) from the QF community, from interested persons and from those regulated electric
utilities (Idaho Power, Avista and PacifiCorp) required to purchase QF power pursuant to
Sections 201 and 210 of the Public Utility Regulatory Policies Act of 1978, and the
implementing rules and regulations of the Federal Energy Regulatory Commission (FERC).
YOU ARE FURTHER NOTIFIED that the Commission has also preliminarily found
that the public interest regarding the issues under consideration in this docket may not require a
hearing and that the Investigation may be processed under Modified Procedure, i.e., by written
submission rather than by hearing. Reference Commission Rules of Procedure, IDAPA
31.01.01.201-204.
YOU ARE FURTHER NOTIFIED that the Commission will not hold a hearing in
this proceeding unless it receives written protests or comments opposing the use of Modified
Procedure and stating why Modified Procedure should not be used. Reference IDAPA
31.01.01.203.
YOU ARE FURTHER NOTIFIED that the deadline for filing written comments or
protests with respect to this investigation and the Commission’s use of Modified Procedure in
Case No. GNR-E-02-1 is Friday, March 15, 2002. Persons desiring a hearing must request a
hearing in their written protests or comments.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the deadline, the Commission will consider the matter on its merits and enter its
Order without a formal hearing. If comments or protests are filed within the deadline, the
Commission will consider them and in its discretion may set the matter for hearing or may
decide the matter and issue its Order on the basis of the written positions before it. Reference
IDAPA 31.01.01.204.
YOU ARE FURTHER NOTIFIED that the written comments concerning this
investigation should be mailed to the Commission, Avista Corporation, PacifiCorp dba Utah
Power & Light Company and Idaho Company at the addresses reflected below.

NOTICE OF INVESTIGATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE 4
COMMISSION SECRETARY
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074

Street Address for Express Mail:

472 W WASHINGTON ST
BOISE, ID 83702-5983
AVISTA CORPORATION

ROBERT J. LAFFERTY
BLAIR STRONG
PO BOX 3727
SPOKANE, WA 99220

PACIFICORP

GREGORY N. DUVALL
JIM FELL
PACIFICORP
424 PUBLIC SERVICE BLDG.
920 SW 6TH AVE
PORTLAND, OR 97204

JOHN M. ERIKSSON
UTAH POWER & LIGHT COMPANY
1407 WEST NORTH TEMPLE
SALT LAKE CITY, UT 84140

IDAHO POWER COMPANY

BARTON L KLINE
SENIOR ATTORNEY
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070

All comments should contain the case caption and case number shown on the first page of this
document.
Persons desiring to submit comments via e-mail may do so by accessing the
Commission’s homepage located at www.puc.state.id.us under the heading “Contact Us.” Once
at the “Contact Us” page, select “Email Case Comments or Questions,” fill in the case number as
it appears on the front of this document, and enter your comments.

NOTICE OF INVESTIGATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE 5
DATED at Boise, Idaho this __4th____ day of February 2002.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

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