20140610final_order_no_33053.pdf

Office of the Secretary
Service Date
June 10,2014
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE lATTER OF TARIFF ADVICE NO.)
13-05 OF IDAHO POWER COMPA1Y FOR )CASE NO.IPC-E-13-25
AUTHORITY TO UPDATE SCHEDULE 86.)
)ORDER NO.33053
__________________________________________________________________________________________
)
On October 24.2013,Idaho Power Company tiled Tariff Advice No.13-05 with the
Commission seeking authority to update its Schedule 86.At the Commission’s regularly
scheduled November 25,2013,Decision Meeting the Commission suspended the tariff advice
and determined that the case should be processed by Modified Procedure.On December 6,
2013,the Commission issued a Notice of Filing and set a deadline for intervention.Order No.
32945.J.R.Simplot Company;Cassia Wind Farm.LLC;SE Hazelton A,L.P.;Fulcrum,Inc.;
BP Hydro Associates;Bypass Power Company,Inc.and Notch Butte Hydro Company,Inc.,
petitioned for,and were granted,intervention.Order No.32960.A Notice of Parties was issued
and the Commission subsequently adopted the procedural schedule proposed by the parties.
Order No.32985.
Pursuant to the schedule,the parties met on March 4,2014,for confidential
settlement discussions.As a result of successful negotiations and reasonable compromise,the
parties agreed to resolve and settle all issues raised in IPC-E-13-25.On May 14,2014,puist1ai1t
to Idaho Code 61-502.RI>56.and RP 274.the parties filed a Joint Motion for approval of a
Settlement Stipulation.The parties agree that the Settlement Stipulation represents a fair,just,
and reasonable compromise of the disputes between the parties and that it is in the public
interest.
Based upon our review of Tariff Advice No.13-05,the terms of the Settlement
Stipulation,and the Joint Motion for approval signed by all parties,we approve the Settlement
Stipulation as set out in greater detail below.
BACKGROUND
On October 24,2013,Idaho Power filed Tariff Advice No.13-05 with the
Commission seeking authority to update its Schedule 86.Idaho Power proposed to add the
words volume”in front of ‘weighted average”in order to reflect the Company’s past practice of
using the volume-weighted average of the daily on-peak and off-peak Mid-C index prices to
ORDER NO.33053
calculate non-firm energy in determining its avoided energy cost.The Company also proposed
to replace use of the Dow Jones non-firm Mid-C electricity price index with the Platts non-firm
Mid-C electricity price index.
THE STIPULATION AND SETTLEMENT
The parties met on March 4,2014.for confidential settlement discussions.The
parties reached agreement on all issues.Based upon the settlement discussions,and as a
compromise of the respective positions of the parties,the parties agreed to the following terms:
I.The Parties agree to amend the definition of Avoided Energy Cost’
contained in Schedule 86 to state as follo s:
Avoided Lneniv (‘ost is 82.4 of the monthly arithmetic a eraLe 01
each davs Intercontinental Exchange (ICE”)daily lirm Mid—C Peak
Avg and Mid-C Off-Peak Avg index prices,Each days index prices
will reflect the relative proportions ol peak hours and off—peak hours
in the month as follows:
Heavy Load (IlL)Hours:The daily hours from hour ending 07i0—
22(0 Mountain Time.(16 hours)L’xc!udnlg all hours on all Sundays.
New Years Day.Memorial Day.Independence Day,Labor Day.
Thanksgiving Day and Christmas Day.
Light Load (EL)I lours:The daily hours from hour ending 2300—
0600 Mountain ‘I ime (8 hours).plus all other hours on all Sundays.
New Years Day,Memorial Day,Independence Day.Labor Day.
Thanksgiving Day and Chrisirnas Day.
The actual Avoided Energy Cost calculation being:
824 *({(1CE Mid-C Peak Avg *[IL hours tbr day)±(ICE
Mid-C OIl-Peak Avg’*LL hours fr day)J (n*23))
where n =number of days in the month
If the ICE Mid—C’Index pi’ices are not reported br a particular day
or days.prices derived from the respective averages of IlL and LL
prices for the immediately preceding and following reporting
periods or days shall be substituted into the lormula stated in this
definition and shall therefore be multiplied by the appropriate
respective numbers of I—IL and LL Hours for such particular day or
days with the result that each hour in such month shall have a related
McGraw Hill Financial,the publisher of both the Dow Jones and Plaits indices,provided notice to the Company
that as of September 13,2013,it was discontinuing publication of the Dow Jones non-firm index and transitioning
to use ofthe Platts non-firm index,
ORDER NO.33053
price in such fbrmula.If the day for hic1i prices are not reported
has in it only LI,I lours (for example a Sunday).the respective
averages shall use only prices reported for LI.hours in the
immediatel\preceding and following reporting periods or days.If
the day for which prices are not reported is a Saturday or Monday or
is adjacent on the calendar to a holiday,the prices used for HE
hours shall he those for IlL hours in the nearest (forward or
backward)reporting periods or days for which III prices are
reported.
Filed as Attachment No.1 to the Settlement Stipulation is an example
of a Schedule 86 axoided cost rate calculation using one month of
actual data from the ICE Mid-C daily price index.Filed as Attachment
No.2 to the Settlement Stipulation is a red-lined crsion of Schedule 86
show ing the aho c-referenced changes.
2.‘l’he Parties agree to amend the 1 inn Energy Sales Agreements (“FFSA”)
between Idaho Power and each interening party to reference the ICE
index using the same language as,and consistent with,the Schedule 86
language agreed upon herein.Filed as Attachment No.2 to the
Settlement Stipulation are the amendments to the associated Firm
Energy Sales Agreement Amendments,signed by Idaho Power and th
rele ant inter ening party,required to effectuate this change to the power
sales agreements.I he parties jointly recommend approval of each of
these contract amendments as part of this Settlement Stipulation.
3,‘Ihe Parties jointly’recommend to the Commission that it allow any’
existing PURPA qualify’ing facility (“QF”)that currently has a contract
with Idaho Power containing reference to the Dow Jones non-firm Mid
C clecti’icity price index to amend their respective FESAs consistent with
the terms agreed to in this Settlement Stipulation and similar to the
contract amendments submitted for appro\al herewith between Idaho
Power and the intervening parties,should they choose to do so.
The Settlement Stipulation contains a provision stating that all terms and conditions
of the settlement agreement arc subject to approval by this Commission and that only after such
approxal,without material change or modification,has been rcccicd shall the settlement
agreement be alid.
FINDINGS AND CONCLUSIONS
The Idaho Public Utilities Commission has jurisdiction over Idaho Power Company,
an electric utility,and the issues raised in this matter pursuant to the authority and power granted
it under Title 61 of the Idaho Code and the Public Utility Regulatory Policies Act of 1978
ORDER NO.33053 3
(PURPA).The Commission has authority under PURPA and the implementing regulations of
the Federal Energy Regulatory Commission (FERC)to set avoided costs.to order electric
utilities to enter into fixed-term obligations for the purchase of energy from qualified facilities
(QFs)and to implement FERC rules.
In this case,the parties entered into a Settlement Stipulation agreement.Our
Procedural Rule 276 recognizes that the Commission is not bound by the parties’settlement
agreement.The Commission may accept,reject,or amend a proposed settlement.IDAPA
31.01.01.276.The Commission will independently review any settlement to determine whether
it is fair,just and reasonable;in the public interest;and otherwise in accordance with law and
regulatory policy.Id.Furthermore,the proponents of a proposed settlement have the burden of
showing that the settlement is reasonable,in the public interest,and otherwise in accordance with
law and regulatory policy.IDAPA 31.01.01.275.
The parties assert that the Settlement Stipulation is fair and equitable.The parties
maintain that the Settlement Stipulation is a reasonable resolution of all issues related to the
Application filed by Idaho Power.The Stipulation further resolves disputed language contained
in each intervenor’s Firm Energy Sales Agreement.The parties state that it is also in the public
interest for the Commission to approve the settlement.
Based upon our review of the record and the Settlement Stipulation presented by the
parties,we find that the settlement represents a reasonable compromise of the original positions
of the parties.We further find that the changes to both Schedule 86 and the intervenors’Firm
Energy Sales Agreements are just and reasonable and in the public interest.We commend the
parties for resolving their disputes through settlement negotiations.We also find it reasonable to
allow any additional existing PURPA QFs that currently have a contract with Idaho Power
containing reference to the Dow Jones non-firm Mid-C electricity price index,should they so
choose,to amend their respective agreements consistent with the terms of this Settlement
Stipulation and similar to the contract amendments approved by this Order.
ORDER
IT IS HEREBY ORDERED that the Joint Motion of Idaho Power;Commission
Staff;J.R.Simplot Company;SE Hazelton A;Fulcrum;BP Hydro Associates;Bypass Power
Company;Notch Butte Hydro Company;and Cassia Wind Farm for approval of the Settlement
Stipulation is granted.
ORDER NO.33053 4
IT IS FURTHER ORDERED that the parties shall comply with all of the terms and
conditions contained in the Settlement Stipulation.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §6 1-626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this I
day of June 2014.
A
MACK A.REDFORD,COMMISSIONER
)0 -I
MARSHA H.SMITI-{.COMMISSIONER
ATTEST:
Jean D Jewell
Commission Secretary
O:JPC-E-1 3-25ks4
PA IDENT
ORDER NO.33053 5