20130321Comments.pdf

KRISTINE A. SASSER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
P0 BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BAR NO. 6618
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
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BEFORE THE IDAHO PUBLIC UTILITIES OMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR A ) CASE NO. IPC-E-13-02
DETERMINATION REGARDING ITS FIRM )
ENERGY SALES AGREEMENT WITH ) COMMENTS OF THE
J.R. SIMPLOT COMPANY FOR THE SALE ) COMMISSION STAFF
AND PURCHASE OF ELECTRIC ENERGY. )
COMES NOW the Staff of the Idaho Public Utilities Com*iission, 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. 32754 on February 28, 2013,
in Case No. IPC-E-13-02, submits the following comments.
BACKGROUND
On February 20, 2013, Idaho Power Company filed an Application with the Commission
requesting a determination regarding the Firm Energy Sales Agreement (FESA, Agreement)
between Idaho Power and J.R. Simplot. The Application states that Simplot would sell and Idaho
Power would purchase electric energy generated by Simplot's Pocatello cogeneration plant
(Facility) located near Pocatello, Idaho.
Idaho Power states that this request is for a replacement Agreement applicable to an
existing project. The current Agreement expired on March 1, 2013. The Application states that
STAFF COMMENTS 1 MARCH 21, 2013
PURPA QF generation must be designated as a network resource (DNR) to serve Idaho Power's
retail load on its system. In order for this Facility to maintain its current DNR status, there must
be an Agreement associated with its transmission service request (TSR) to maintain compliance
with Idaho Power's non-discriminatory administration of its Open Access Transmission Tariff
(OATT) and compliance with FERC requirements. A lapse of time between the Facility's
expiring agreement and replacement firm energy sales agreement places its status as a DNR and
its associated TSR in jeopardy. In order to provide for the continued and uninterrupted operation
of the cogeneration Facility and its associated plant (to maintain DNR status), the parties requested
interim approval of the Agreement while the Commission completes its review. The Commission
granted interim approval on February 28, 2013, subject to adjustments, until such time as the
Agreement is approved by a final Order of the Commission. See Order No. 32754.
STAFF ANALYSIS
Simplot has elected to contract with Idaho Power for a two-year term using non-levelized
published avoided cost rates as currently established by the Commission for energy deliveries of
less than 10 aMW. As a cogeneration plant, the Facility is classified within the "other" category
of the published rates. The avoided cost rates contained in this Agreement are lower than the
avoided cost rates contained in the expiring Agreement. Because the Facility is an existing QF
whose previous contract with Idaho Power is expiring, this Agreement contains capacity payments
for the entire term of the Agreement. Staff has reviewed the rates contained in the Agreement and
confirms that they are in accordance with the current approved published avoided cost rates
(Commission Errata to Order No. 32697 and Order No. 32737).
The nameplate rating of this Facility is 15.9 MW. Having chosen a published rate
contract, Simplot will be required to provide data on the Facility that Idaho Power will use to
confirm that under normal and/or average conditions, the Facility will not exceed 10 aMW on a
monthly basis. The Facility has met this limitation in the past and is expected to continue to meet
it going forward.
Under the terms of the Agreement, one hundred percent of the Environmental Attributes or
Renewable Energy Certificates directly associated with the production of energy from the Facility
are owned by Simplot. This is consistent with the requirements of Commission Order No. 32687
issued on December 18, 2012.
STAFF COMMENTS 2 MARCH 21, 2013
One element of the new replacement Agreement that distinguishes it from the prior
contract is the insertion of language that excuses Idaho Power from accepting and paying for
energy if curtailment is allowed by Section 210 of the Public Utilities Regulatory Policies Act of
1978 and 18 CFR §292.304. The prior contract referred to 18 CFR §292.304, but the reference to
it in this Agreement is much more explicit.
One other minor language change from the prior agreement is that Mid-Columbia Market
Energy Cost has been defined as the monthly volume weighted average of Dow Jones Mid-C
index prices. The prior agreement did not specify that volume would be used to compute a
weighted average, so this language change will help to clarify the calculation.
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 Simplot for purchases of energy
will be allowed as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this L. I -
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day of March 2013.
A ,t2. SaAAJ-A
Kri me A. Sasser
Deputy Attorney General
Technical Staff: Rick Sterling
i:umisc:comments/ipcel 3.2ksrps comments
STAFF COMMENTS 3 MARCH 21, 2013
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 21ST DAY OF MARCH 2013,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. IPC-E-13-02, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
DONOVAN E WALKER
IDAHO POWER COMPANY
P0 BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
RANDY C ALLPHIN
ENERGY CONTRACT ADMIN
IDAHO POWER COMPANY
P0 BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
CERTIFICATE OF SERVICE