20120117Comments.pdf

KRISTINE A. SASSER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BAR NO. 6618
2012 JMl /7 Mi 10: 35
LJOLr/L
,"'.~
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR A )
DETERMINATION REGARDING ITS FIRM )
ENERGY SALES AGREEMENT WITH )
RIVERSIDE INVESTMENTS, LLC. )
)
CASE NO. IPC-E-1l-27
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attorney of record, Kristine A. Sasser, Deputy Attorney General, and in response to the Notice
of Application and Notice of Modified Procedure issued in Order No. 32422 on December 27,
2011, in Case No. IPC-E-II-27, submits the following comments.
BACKGROUND
On December 6, 2011, Idaho Power Company fied an Application with the Commission
requesting acceptance or rejection of a 20-year Firm Energy Sales Agreement (Agreement)
between Idaho Power and Riverside Investments, LLC (Riverside). The Application states that
Riverside would sell and Idaho Power would purchase electric energy generated by the Fargo
Drop hydroelectric project (Facilty) located near Homedale, Idaho.
STAFF COMMENTS JANUARY 17,2012
Riverside proposes to own, operate and maintain a 1.27 MW (maximum capacity,
nameplate) generating facilty. Application at 2. The Facility wil be a Qualifying Facilty (QF)
under the applicable provisions of the Public Utility Regulatory Policies Act of 1978 (PURP A).
Riverside selected July 20,2012, as its Scheduled First Energy Date and August 1,2012,
as its Scheduled Operation Date. ¡d. Idaho Power asserts that various requirements have been
placed upon the Facilty in order for Idaho Power to accept the Facilty's energy deliveries. Idaho
Power states that it wil monitor the Facilty's compliance with initial and ongoing requirements
through the term of the Agreement. Riverside and Idaho Power have agreed to liquidated damage
and security provisions. Agreement ~~ 5.3, 5.8.1.
The Application maintains that all applicable interconnection charges and monthly
operation or maintenance charges under Schedule 72 wil be assessed to Riverside. Idaho Power
states that the Facility is currently in the generator interconnection process. "Upon resolution of
any and all upgrades required to acquire transmission capacity for this Facilty's generation, and
upon execution of the FESA and the GIA, this Facility may then be designated as a network
resource." ¡d. at 5.
Idaho Power states that the Facility has also been made aware of and accepted the
provisions in the Agreement and Idaho Power's approved Schedule 72 regarding non-
compensated curtailment or disconnection of its Facility should certain operating conditions
develop on Idaho Power's system. The Application notes that the parties' intent and
understanding is that "non-compensated curtailment would be exercised when the generation
being provided by the Facilty in certain operating conditions exceeds or approaches the minimum
load levels of (Idaho Power's) system such that it may have a detrimental effect upon (Idaho
Power's) ability to manage its thermal, hydro, and other resources in order to meet its obligation to
reliably serve loads on its system." Application at 6.
STAFF ANALYSIS
Staff has thoroughly reviewed the Agreement and finds that it contains terms and
conditions that have become standard in many other existing PURP A contracts. With the
exception of shared ownership of Renewable Energy Certificates (RECs), there are no other
unique or noteworthy features of the Agreement.
Under terms of the Agreement, RECs would be split equally between Riverside and Idaho
Power from the beginning of the contract through its 20-year term. Agreement ~ 8.1. Some recent
STAFF COMMENTS 2 JANUARY 17,2012
PURP A contracts have contained a similar REC sharing arangement, while others have split REC
ownership 50-50 between the first ten years and the last ten years of the contract. In any case, the
Commission has previously held that REC ownership is an acceptable negotiated term for all
PURP A contracts.
The Agreement contains the non-Ievelized published avoided cost rates in accordance with
Commission Order No. 32337. The monthly net energy amounts to be delivered to Idaho Power
beginning in 2012 are also specified in the Agreement. However, it should be noted that because
the First Energy Date for the Facilty is not until the middle of the 2012 irrigation season (July 20),
no monthly generation is shown in the Agreement for the months of April, May, and June.
Agreement at ~ 6.2.1, see attached. It should be recognized, however, that expected generation in
April, May and June for years following 2012 wil be 165,000,550,000, and 725,000 kWhs,
respectively. Ongoing monthly net energy amounts wil be provided by Riverside to Idaho Power
and wil serve as references in determining Surlus Energy. Agreement at ~ 1.34.
RECOMMENDATIONS
Staff recommends that the Commission approve all of the Agreement's terms and
conditions and declare that all payments made by Idaho Power to Riverside for purchases of
energy wil be allowed as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this /7 rt day of January 2012.
~d'~H_
stine A. Sasser
Deputy Attorney General
Technical Staff: Rick Sterling
i:umisc:comments/ipce i 1.27ksrps comments
STAFF COMMENTS 3 JANUARY 17,2012
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 17TH DAY OF JANUARY 2012,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-II-27, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
DONOV AN E WALKER
JASON B. WILLIAMS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: dwalker(iidahopower.com
jwiliams(iidahopower .com
RANDY C ALLPHIN
ENERGY CONTRACT ADMIN
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: rallphin(iidahopower.com
DENNIS DAUGHERTY
FARGO DROP HYDROELECTRIC
RIVERSIDE INVESTMENTS
PO BOX 154
ADRIAN OR 97901
E-MAIL: dennis(irsicorp.net
JiF
SECRETAR
CERTIFICATE OF SERVICE