20140711Renewable Energy Coalition Comments.pdf

RENEWABLE ENERGY COALITION 20!JUL I I 1 ii:j
12050 SWTREMONTST.PORTLRND.OREGON 97225 UTIILI I I
July11,2014
The Honorable Marsha H.Smith
The Honorable Paul Kjellander
The Honorable Mack A.Redford
Idaho Public Utilities Commission
472 West Washington Street
Boise,ID 83720
RE:Case No.IPC-E-14-06,Order No.33055
Dear Commissioners Smith,Kjellander,and Redford:
The Renewable Energy Coalition (“Coalition”)very much appreciates
the opportunity to provide comments regarding the Commission’s
consideration of approval of the April 23,2014 Power Purchase
Agreement (“Agreement”)between Mr.William Arkoosh and Idaho
Power Company (“IPCO”).
As you may recall,the Coalition has been a very active party
in recent PURPA-based dockets in Idaho and the group represents
exclusively through in its Idaho membership only small
hydroelectric projects.Mr.Arkoosh is a member of the Coalition,as
are other parties involved in subsequent power purchase agreements
pending the Commission’s approval.
It is our understanding that the Arkoosh Agreement contains terms
and conditions related to the 901110%bandwidth delivery
requirements that have been negotiated between the contracting
parties.Negotiation and agreement between the parties was the
foundation for the Commission’s Staff to recommend approval of the
Bell Mountain hydro agreement in Case PAC-E-09-09,Order 30989 in
which the Commission ultimately approved replacement of the
901110%bandwidth standard terms with an alternative applying a
Mechanical Availability Guarantee (“MAG”)It is also our
understanding that this Agreement may be the first of several power
purchase agreements recently negotiated with IPCO containing
identical terms and conditions implementing the 901110%bandwIdth
provisions effectively on a monthly basis,including at least two other
agreements with Coalition members.
The Coalition urges the Commission is consider approval of the
Agreement.In doing so we encourage the Commission to recognize
the acceptability for broader and/or future application of the revised
one-month advance estimates which implement the provisions of the
power purchases agreement related to the 90/110%bandwidth and
deem as acceptable replacement of the bandwidth requirements and
terms with alternatives.
Mr.Arkoosh’s Agreement,which has been under negotiation for an
extended period,due primarily to challenges related to the currently
approved 90I110%Bandwidth terms,needs to be finalized within
weeks.In order that the project can meet various project
development and Agreement milestones especially that of coming on
line during the beginning of IPCO’s 2015 peak season,project
financing must be completed first.The financing proceeding Is
dependent upon Commission approval of the Agreement.Other power
purchase agreements in the “queue”for Commission approval likely
have similar circumstances.
In a “not so rare event”the Coalition wholeheartedly agrees with
IPCO’s July 8,2014 responses to Staff’s First Production Request,
requests and responses I through 7.Of special note is IPCO’s
response and observation “However,the motivation of this
performance criteria is not to increase or increase the energy
payments to a project but instead to have a project provide Idaho
Power with more accurate energy estimates that could be used in the
planning of both long-term and short-term operations...”.The Coalition
had an analysis performed several months ago of applying existing
member’s projects long-term historic production data to the current
approved 90/110%bandwidth requirements.The results,reinforced by
an independent analysis,showed a very high risk of revenues being
reduced by as much as 1/3.The modified approach of applying the
Bandwidth in the subject Agreement should be expected to produce
more favorable and reliable expectations of both revenue to projects
and monthly deliveries to IPCO..
Thank you again for considering the approval of Mr.Arkoosh’s
Agreement.
Sincerely
John R.Lowe
Executive Director
Renewable Energy Coalition