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An IDACORP Company
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Barton L. Kline
Senior Attorney
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February 6, 2007
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P. O. Box 83720
Boise, Idaho 83720-0074
Re:Case No. IPC-07-
In the Matter of Idaho Power Company s Petition to Revise the
Published Avoided Cost Rates to Include a daily Load Shape; and
To Clarify the Rules governing Entitlement to Published Avoided
Cost Rates
Dear Ms. Jewell:
Please find enclosed for filing an original and seven (7) copies of Idaho Power
Company s Petition for the above-referenced matter.
I would appreciate it if you would return a stamped copy of this transmittal letter in
the enclosed self-addressed, stamped envelope.
~rUIY yours
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~rt~~ L. Kline
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Enclosures
O, Box 70 (83707)
1221 W. Idaho St"
Boise, ID 83702
BARTON L. KLINE , ISB # 1526
MONICA B. MOEN, ISB # 5734
Idaho Power Company
1221 West Idaho Street
P. O. Box 70
Boise , Idaho 83707
Telephone: (208) 388-2682
FAX Telephone: (208) 388-6936
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idahopower.com
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Attorneys for Idaho Power Company
Express Mail Address
1221 West Idaho Street
Boise, Idaho 83702
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S PETITION TO REVISE THE
PUBLISHED AVOIDED COST RATES TO
INCLUDE A DAILY LOAD SHAPE; AND
TO CLARIFY THE RULES GOVERNING
ENTITLEMENT TO PUBLISHED AVOIDED
COST RATES
CASE NO. IPC-
PETITION
Idaho Power Company ("Idaho Power" or the "Company ), pursuant to RP 053,
hereby requests that the Idaho Public Utilities Commission ("Commission ) issue its
order:
Revising the published avoided cost rates for qualifying facilities ("OFs
under Sections 201 and 210 of the Public Utility Regulatory Policies Act of 1978
PURPA") to reflect Idaho Power s daily load shape and recognize the difference in
value between energy delivered by OFs during heavy load hours and energy delivered
PETITION , Page
during light load hours. This revision would not change the computation of avoided
costs but it could change the total revenues received by OFs depending on when during
the day they deliver energy. The Company s proposed published rates reflecting the
daily load shape are set out in Attachment 1 enclosed with this Petition; and
Clarifying the rules governing the entitlement to published rates to prevent
OF projects capable of delivering more than 10 aMW per month from artificially
restructuring into smaller projects in order to qualify for the published avoided cost
rates. The Company s proposed rule to address this problem is set out in Attachment 2
which is enclosed with this Petition.
This Petition is based on the following:
BACKGROUND
In Case no. IPC-07-03, filed concurrently with this Petition, Idaho Power has
requested that the Commission raise the cap on the entitlement to published rates from
its current level of 100 kW to 10,000 average kW/mo (10 average megawatts or 10
aMW). In Case No. IPC-07-03 Idaho Power has also asked the Commission
reduce the published avoided cost rates to be paid to intermittent wind powered OF
resources to compensate for the additional costs these resources impose on Idaho
Power.
The relief the Company is requesting in Case No. IPC-07-03 is limited in its
application to intermittent wind powered OF resources.However, there are other
changes and clarifications that the Company believes need to be made to the current
avoided cost rates and rules that would apply to all OFs , both wind powered and
otherwise. To avoid any claim by the developer of a non-wind powered OF that issues
PETITION , Page 2
affecting its project are being decided in a proceeding primarily aimed at wind powered
OFs, Idaho Power has filed this separate Petition to address the issues common to both
wind powered OFs and non-wind powered OFs. It is Idaho Power s belief that this
separation will ensure that all parties receive adequate notice and due process.
II. REVISING THE PUBLISHED RATES TO INCLUDE PAYMENT
DIFFERENTIALS FOR ENERGY DELIVERED DURING HEAVY
LOAD HOURS AND LIGHT LOAD HOURS
Since the early 1980'when PURPA was first implemented in Idaho, the
Commission has shaped Idaho Power s OF purchase rates to address the difference in
energy values between the various seasons of the year. This seasonalization of the
avoided cost rates recognizes that energy delivered by OFs has different values based
on when it is delivered. For example , energy delivered in the summer season is more
valuable because it can be used to meet the Company s summer season peak loads.
Similarly, energy provided by OFs has different values based on how it can help
meet the Company daily peaks in load. This difference in value between heavy load
hours and light load hours was the basis for the daily shape adjustment that was
approved for Avista Corporation in Commission Order No. 30111 issued in Case No.
A VU-06-4. In that case the Commission approved Avista s request to change its
published avoided cost rates to reflect the difference in value between energy delivered
by OFs during heavy load hours as compared to light load hours.
In this Petition, Idaho Power is requesting that the Commission also allow Idaho
Power to revise its published avoided cost rates to reflect the difference in value
between energy delivered during heavy load hours and energy delivered during light
load hours. This revision to reflect daily load shape does not change the computation of
PETITION , Page 3
avoided costs. It only adjusts the shape of the payments. With the addition of a daily
load shape to published rates, a OF delivering energy on a uniform around-the-clock
basis would see no change in the total revenue it received each month as a result of the
daily shape adjustment. However, with the daily shape adjustment, a OF that delivers a
greater percentage of its total energy output during heavy load hours will receive more
total revenue each month than a OF that delivers a greater percentage of its total
energy output during light load hours.The Company s proposed changes to the
published rates to reflect the daily shape adjustment are shown in Attachment 1.
Attachment 1 also shows the avoided cost rates proposed for wind powered OFs
reflecting the combined effect of the daily load shape adjustment and the reduced
avoided costs due to the additional cost of wind integration discussed in the Company
Petition in Case No. IPC-07-03.
III.RULES TO PREVENT LARGE QFs FROM RECONFIGURING INTO SMALLER
PROJECTS TO QUALIFY FOR THE PUBLISHED RATES
The Commission has previously determined that OF projects that are expected to
generate more than 10 aMW each month are not entitled to receive the published rates.
Instead, the purchase rates for these larger OF projects are individually negotiated
based on avoided costs determined by use of the AURORA system dispatch model.
This use of the AURORA model to determine avoided costs for large OFs is commonly
referred to as the IRP methodology. Historically, avoided costs determined by use of
the more sophisticated IRP methodology have been slightly lower than the published
rates.
As the Commission is well aware , a number of large wind and geothermal
projects have been identified as possible developments in Idaho. While Idaho Power
PETITION , Page 4
pleased that some of those resources may be available to add to its resource portfolio
there is a legitimate concern if in Case No. I PC-07 -03 the Commission grants Idaho
Power s request to raise the cap for entitlement to the published rates back to 10 aMW
per month , larger wind powered OF projects will choose to create multiple legal entities
to reconfigure themselves into multiple smaller projects in order to qualify for the
historically higher published rates. The same concern exists for OFs using other
generation technologies.
This same concern was recently addressed in the PURPA avoided cost rate-
setting proceedings before the Public Utility Commission of Oregon. (Docket No. UM-
1129). The parties to that proceeding settled this issue by negotiating a stipulation
which was approved by the parties and presented to the Oregon Commission for
approval. The stipulation was signed by all of the utilities , the Oregon Department of
Energy, the Staff of the Oregon Public Utilities Commission , Sherman County and the
R. Simplot Company. No party to the case opposed the stipulation. In Order No. 06-
538 and Order No. 06-586, the Oregon Commission approved the settlement stipulation
that defined those small cogeneration facilities or small power production facilities
eligible to receive Oregon "standard rates.
Idaho Power has enclosed as Attachment 2 a proposed rule which the Company
requests the Commission adopt in this case. Attachment 2 is nearly identical to the
stipulated language approved by the Oregon Public Utility Commission to resolve the
disaggregation issue in Oregon. The primary difference between Attachment 2 and the
Oregon-ordered language is terminology that is unique to Oregon. For example , in
Attachment 2 Idaho Power has substituted "published rates" for "standard rates , the
PETITION , Page 5
term used in Oregon. In addition , Attachment 2 includes changes to reflect the fact that
Idaho uses monthly energy capability (10 aMW) as the cap on entitlement to published
rates and measures OF performance on a monthly rather than annual basis.
Idaho Power requests that the Commission approve the rule proposed in
Attachment 2 to define OFs entitlement to the published rates.
IV.RECOMMENDED PROCEDURE FOR PROCESSING THIS PETITION
Idaho Power has posted this pleading and the two Attachments on its website.
has sent e-mails to all of the intervenors in Case No. IPC-05-, the entities that
participated in the workshops that followed the issuance of Order No. 29839 and to
other interested parties advising them of this filing and providing a link to the website. If
the Commission concurs, Idaho Power proposes to expeditiously schedule and conduct
at least one workshop to discuss this Petition. It seems logical that this Petition be
discussed in conjunction with the workshops the Company has proposed to conduct in
Case No. IPC-07-03 because it would affect wind OF resources. As the Company
noted in its Petition in Case No. IPC-07-, the Company believes that a
Commission-sanctioned workshop or process could facilitate settlement discussions at
an early stage of both cases.
At any time , parties could request a pre-hearing conference or otherwise request
that the Commission make a determination as to how to proceed with this case either by
submitting written comments or by the conducting of a technical hearing with pre-filed
testimony and discovery.
Based on all of the foregoing, Idaho Power respectfully requests that the
Commission issue its order.
PETITION, Page 6
Revising the published avoided cost rates for qualifying facilities under
Sections 201 and 210 of the Public Utility Regulatory Policies Act of 1978 to include a
daily shape adjustment as proposed by the Company in Attachment 1 ; and
Establishing rules to prevent OF projects capable of delivering more than
10 aMW per month from artificially restructuring into smaller projects in order to qualify
for the published avoided cost rates available to OF projects capable of delivering 10
aMW or less per month. The Company s proposed rule language to address this issue
is set out in Attachment 2 which is enclosed with this Petition; and
Such other relief as the Commission may deem appropriate.
.ll-\
Respectfully submitted this
& -
day of February 2007.
(1*1
BARTON L. KLINE
Attorney for Idaho Power Company
PETITION, Page 7
BEFORE THE IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-O7-
IDAHO POWER COMPANY
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ATTACHMENT
IDAHO POWER COMPANY
Heavy Load and Light Load price calculation
To calculate this value, Idaho Power accumulated historical daily volumes and prices for all
Mid Columbia Firm Heavy Load Hour (HLH) and Light Load Hour (LLH) transactions for
January 1 , 2003 through January 20 , 2007 provided by Dow Jones.
The weighted average of both HLH and LLH was calculated as:
Summation of all days Daily Volume multiplied by Daily Price divided by the
sum of all Daily Volumes for the same days.
This calculation resulted in:
HLH Weighted average:
LLH Weighted average:
Difference of:
$50.
$38.
$11.
Liqht Load Hours (LLH) beinQ defined
Monday through Saturday Hour ending 2300 through 0600 (Pacific Prevailing Time (PPT))
All Sunday Hours (PPT)
All NERC Holidays (PPT)
NERC Holidays being:
New Years Day
Memorial Day
Independence Day
Labor Day
Thanksgiving Day
Christmas Day
Heavv Load Hours (HLH) beinQ defined
Monday through Saturday Hour ending 0700 through 2200 (PST)
Less all NERC Holidays
IPUC Docket - IPC-07-
Idaho Power Company
Attachment #1
IDAHO POWER COMPANY
AVOIDED COST RATES FOR NON-FUELED PROJECTS
SMALLER THAN TEN MEGAWATTS
December 1 , 2004
Mills/Kwh
IPUC Order NO. 29646
Contract Length ON-LINE YEAR Contract Non-Levelized(Years)2004 2005 2006 2007 2008 2009 Year Rates
49.50.51.52.53.55.2004 49.
49.50.52.53.54.55.2005 50.
50.51.45 52.53.55.56.2006 51.
50.52.53.54.42 55.56.2007 52.
51.52.53.54.56.57.2008 53.
51.53.54.55.56.58.2009 55.
52.53.54.56.57.58.2010 56.41
52.54.55.56.57.59.2011 57.
53.54.55.57.58.47 59.2012 59.
53.55.56.57.59.60.2013 60.40
54.55.56.58.59.60.2014 61.
54.56.57.58.60.61.44 2015 63.
55.56.57.59.60.61.2016 64.
55.57.58.59.61.62.46 2017 66.
56.57.48 58.60.61.62.2018 67.
56.57.59.60.62.63.45 2019 69.
57.58.59.61.62.49 63.2020 70.
57.47 58.60.61.62.64.40 2021 72.49
57.59.60.61.63.40 64.2022 74.
58.59.60.62.40 63.65.2023 75.
2024 77.
2025 79.41
2026 81.
2027 83.
2028 85.
2029 87.
Wind InteQration Cost Adjustment:10.72 Mills/Kwh
Heavy Load and LiQht Load hour price differential:11.63 Mills/Kwh
IPUC Docket - IPC-07-
Idaho Power Company
Attachment #1
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ATTACHMENT 2
Definition of a Small Cogeneration Facility or Small Power Production
Facility Eligible to Receive Published Rates:
A Oualifying Facility (either a small power production facility or a cogeneration
facility) ("OF") will be eligible to receive the published rates if the expected (under
normal and/or average operating conditions) monthly energy generation of the
, together with any other electric generating facility using the same motive
force, owned or controlled by the same person(s) or affiliated person(s), and
located at the same site , does not exceed 10 aMW measured on a monthly
basis.
Definition of a Person(s) or Affiliated Person(s):
As used above , the term "same person(s)" or "affiliated person(s)" means a
natural person or persons or any legal entity or entities sharing common
ownership management or acting jointly or in concert with or exercising influence
over the policies or actions of another person or entity. However, two facilities
will not be held to be owned or controlled by the same person(s) or affiliated
person(s) solely because they are developed by a single entity. Furthermore
two facilities will not be held to be owned or controlled by the same person(s) or
affiliated person(s) if such common person or persons is a "passive investor
whose ownership interest in the OF is primarily related to utilizing production tax
credits, green tag values and MARCS depreciation as the primary ownership
benefit.
Definition of Same Site:
For purposes of the foregoing, generating facilities are considered to be located
at the same site as the OF for which qualification for the published rates is
sought if they are located within a five-mile radius of any generating facilities or
equipment providing fuel or motive force associated with the OF for which
qualification for the published rates is sought.
Shared Interconnection and Infrastructure:
OFs otherwise meeting the above-described separate ownership test and
thereby qualified for entitlement to the published rates will not be disqualified by
utilizing an interconnection or other infrastructure not providing motive force or
fuel that is shared with other OFs qualifying for the published rates so long as the
use of the shared interconnection complies with the interconnecting utility
safety and reliability standards , interconnection contract requirements and
Prudent Electrical Practices as that term is defined in the interconnecting utility
approved OF contracts.
Case No. IPC-O7-
Page 1 of 2
Dispute Resolution:
Upon request, the OF will provide the purchasing utility with documentation
verifying the ownership, management and financial structure of the OF
reasonably sufficient detail to allow the utility to make an initial determination of
whether or not the OF meets the above-described criteria for entitlement to the
published rates. Any dispute concerning a OFs entitlement to the published
rates shall be presented to the Commission for resolution.
Standard Contract Provision:
To insure continued compliance with the requirements stated above , all
contracts utilizing the published rates shall contain a representation in
substantially the following form: "Seller will not make any changes in its
ownership, control or management during the term of this Agreement that would
cause it to not be in compliance with the Definition of a Small Cogeneration
Facility or Small Power Production Facility Eligible to Receive the Published
Rates approved by the Commission at the time this Agreement is executed.
Seller will provide, upon request by Purchasing Utility not more frequently than
every 36 months, such documentation and information as may be reasonably
required to establish Seller continued compliance with such Definition.
Purchasing Utility agrees to take reasonable steps to maintain the confidentiality
of any portion of the above-described documentation and information that the
Seller identifies as confidential except Purchasing Utility will provide all such
confidential information to the Idaho Public Utility Commission upon the
Commission s request."
Case No. IPC-O7-
Page 2 of 2