20140718Reply Comments.pdf

KRISTINE A. SASSER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 334-03s7
BAR NO. 6618
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702.5983
Attorney for the Commission Staff
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR APPROVAL
OR REJECTION OF AN ENERGY SALES
AGREEMENT WITH WILLIAM ARKOOSH
FOR THE SALE AND PURCHASE OF
ELECTRIC ENERGY FROM THE LITTLE
WOOD RIVER RANCH II PROJECT.
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO.IPC.E.I4-06
REPLY 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
Renewable Energy Coalition's Comments submitted on July 11,2014, in Case No.
IPC-E-14-06, submits the following responsive comments.
BACKGROUND
On July 11,2014, comments were submitted by the Renewable Energy Coalition (REC) in
support of the proposed power sales agreement (Agreement) between Idaho Power Company and
William Arkoosh for the Little Wood River Ranch II hydro project. REC's comments focused
almost exclusively on provisions in the Agreement related to 901110 requirements for
distinguishing firm and non-firm energy, and the proposed changes from quarterly to monthly
notification for generation estimates. REC recommended approval of the Agreement.
REPLY COMMENTS JULY 18,2OI4
Staff is filing a reply because it believes REC's comments are misleading. Although not
expressly authorized to speak on his behall REC claims to represent the interests of Mr. Arkoosh
and other members of REC with pending contracts containing similar language. Consequently,
Staff believes it is important to address issues raised by REC's comments.
STAFF RESPONSE
REC's comments on what it claims are similar contracts are misleading in several
respects. First, REC's comments seem to imply that Commission approval of a deviation from
existing 90/110 requirements for another project justify deviation in the present case. REC states
that "[n]egotiation 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 90lll0% bandwidth
standard terms with an alternative applying a Mechanical Availability Guarantee ('MAG')."
In fact, Staff recommended, and the Commission approved, a deviation from the 90/l l0
requirements for the Bell Mountain project because the project was very small (290 kW) and
because the project agreed to an alternative for the 90/l l0 that is even more rigorous than what is
required for wind projects. Bell Mountain agreed to a5.10o/o integration charge to be applied as a
reduction to avoided cost rates and a90Yo MAG (an85o/o MAG is required for wind).
Moreover, while the Bell Mountain contract substitutes a MAG and an integration charge
for the 90/l 10 requirements, it still requires the QF to provide monthly generation estimates, and
permits them to be revised only at three month intervals - such as is currently required by Order
No. 29632 and recommended by Staff to be applied to Arkoosh's agreement. Consequently, the
terms approved by the Commission in Bell Mountain's contract are drastically different from
what is being proposed in the present case.
REC's comments also refer to several other unnamed contracts that have been negotiated
with Idaho Power containing the same 90/110 requirements as that proposed for Arkoosh's
project. Although there are several contracts currently submitted to the Commission that propose
the same 90/1 10 requirements, there are no contracts that have been approvedby the Commission
with these provisions.
REC also states that it had an independent analysis performed several months ago that
revealed a project's revenues could be reduced by as much as one third under the existing 90/1 10
REPLY COMMENTS JULY 18,2OI4
requirements. Unfortunately, REC did not provide a copy of its analysis to support its position.
Nevertheless, Staff does not believe that the possibility that a project's revenues could be reduced
is justification for changing the 90/1 l0 requirements.
Staff continues to recommend that any change to notification requirements associated with
90/110 be considered in a separate docket. The fact that REC commented in this case not only on
behalf of Mr. Arkoosh but also "other parties involved in subsequent power purchase agreements
pending the Commission's approval" supports Staff s position that possible changes to the 90lll0
are better considered in a separate docket in which all interested persons or parties can participate.
Finally, Staff s initial comments contain an error that does not affect the substance of the
comments. The last sentence of the first paragraph on page 8 is incorrect and should be deleted.
The Little Wood River Ranch II Agreement contains only non-seasonal rates.
Respectfully submitted this $fil day of July 2014.
Technical Rick Sterling
Yao Yin
i:umisc:comments/ipcel6.6ksrpsyy reply comments
REPLY COMMENTS JULY 18,2OI4
CERTIFICATE OF SERYICE
I HEREBY CERTIFY THAT I HAVE THIS 18th DAY OF JULY 2014,
SERVED THE FOREGOING REPLY COMMENTS OF THE COMMISSION STAX'F,
IN CASE NO. IPC-E.14.06, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
DONOVAN E. WALKER
IDAHO POWER COMPANY
P.O. BOX 70
BOISE, TD 83707
E-MAIL: [e-mail]
dockets@idahopower. com
RANDY C. ALLPHIN
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
CERTIFICATE OF SERVICE