20140527Amended Application.pdf

NPO,ITER=
An IDACORP CompanyPE6ElYEI}
?0ll{ }lAY 2? Ptl lrr 116
lDAl''lO Puili;r.
UT ILiTIES COMI}IISSION
DONOVAN E. WALKER
Lead Counsel
[e-mail]
May 27,2014
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
472 W estWashington Street
Boise, ldaho 83702
Re: Case No. IPC-E-14-OT
Head of U Canal Project - Idaho Power Company's Amended Application
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of ldaho Power
Company's Amended Application in the above matter.
yours,
DEW:csb
Enclosures
?u-onovan E. Walker
1221 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorney for ldaho Power Company
!N THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT WITH
NORTH SIDE ENERGY COMPANY, INC.,
FOR THE SALE AND PURCHASE OF
ELECTRIC ENERGY FROM THE HEAD OF
U CANAL PROJECT.
RECEIVf, N
Z0lq tAY 27 Pll tr: 116
IUAH0 ij(;i,1,''"1
uT t[lTi Es c0M l'{ lssl CIl{
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-14-07
AMENDED APPLICATION
ldaho Power Company, pursuant to RP 66, hereby submits this Amended
Application. This Amended Application is identica! to the originally submitted
Application with the exception of the addition of this initial paragraph and the addition of
paragraph 9.5. Paragraph 9.5 provides a summary of changes to terms and conditions
contained in the proposed Energy Sales Agreement from those that the ldaho Public
Utilifies Commission has approved in prior Firm Energy Sales Agreements.
ldaho Power Company ("!daho Powe/'or "Company"), in accordance with RP 52
and the applicable provisions of the Public Utility Regulatory Policies Act of 1978
AMENDED APPLICATION - 1
('PURPA"), hereby respectfully applies to the ldaho Public Utilities Commission
("Commission") for an order accepting or rejecting the Energy Sales Agreement ("ESA")
between ldaho Power and North Side Energy Company, lnc. ("NSEC" or "Selled') under
which NSEC would sell and ldaho Power would purchase electric energy generated by
the Head of U Canal Project ("Facility") located near Jerome, ldaho.
ln support of this Application, ldaho Power represents as follows:
I. INTRODUCTION
1. The ESA submitted herewith is a new contract for a Qualifying Facility
("QF') for a term of 20 years. This ESA complies with the Commission's orders from
Case No. GNR-E-11-03, and contains published rates for projects of 10 average
megawatts ("aMW") or less.
2. The ESA, dated Apri! 23, 2014, was signed by NSEC on April 18, 2014,
and was signed by ldaho Power on April 23, 2014. The ESA was executed in
compliance with the Commission's orders directing the implementation of PURPA for
the state of ldaho, and contains the most recent avoided cost rates pursuant to the
Commission's Order No. 32817.
II. BACKGROUND
3. Sections 201 and 210 of PURPA, and pertinent regulations of the Federal
Energy Regulatory Commission ("FERC'), require that regulated electric utilities
purchase power produced by cogenerators or small power producers that obtain QF
status. The rate a QF receives for the sale of its power is generally referred to as the
"avoided cost" rate and is to reflect the incremental cost to an electric utility of electric
energy or capacity or both, which, but for the purchase from the QF, such utility would
AMENDED APPLICATION.2
generate itself or purchase from another source. The Commission has authority under
PURPA Sections 2O1 and 210 and the implementing regulations of FERC, 18 C.F.R.
S 292, to set avoided costs, to order electric utilities to enter into fixed-term obligations
for the purchase of energy from QFs, and to implement FERC rules.
4. On December 18, 2012, the Commission issued Order No. 32697, which
established parameters for published and negotiated avoided cost rate calculations.
The Commission further established and defined numerous contract terms and
conditions for standard power purchase agreements entered into between regulated
utilities and QFs. On January 2, 2013, the Commission issued Errata to Order No.
32697, which corrected published avoided cost rates to include energy payments not
discounted by transmission and line loss. Then the Commission issued
Reconsideration Order Nos. 32737 and 32802 on February 5, 2013, and May 5, 2013,
respectively, which further clarified certain terms and conditions of power purchase
agreements.
III. THE ENERGY SALES AGREEMENT
5. On April 23,2014,ldaho Power and NSEC entered into an ESA pursuant
to the terms and conditions of the various Commission orders applicable to this PURPA
agreement for a Seasonal Hydro project. Order Nos. 32697 and 32737. A copy of the
ESA is attached to this Application as Attachment 1. Under the terms of this ESA,
NSEC elected to contract with ldaho Power for a 20-year term using the non-levelized
other published avoided cost rates as currently established by the Commission in Order
No. 32817 for energy deliveries of less than 10 aMW. This ESA was executed by
AMENDED APPLICATION - 3
NSEC on April 18,2014. It was subsequently executed by ldaho Power on April 23,
2014, and now filed for the Commission's review.
6. NSEC proposes to operate and maintain a 1.28 megawatt ('MW")
(Maximum Capacity Amount) Seasonal Hydro energy facility to be located near Jerome,
ldaho. The Facility will be a QF under the applicable provisions of PURPA.
7. The nameplate rating of this Facility is 1.28 MW. As defined in paragraph
1.20 and paragraph 4.1.4 of the ESA, NSEC will be required to provide data on the
Facility that ldaho Power will use to confirm that under normal and/or average
conditions, the Facility will not exceed 10 aMW on a monthly basis. Furthermore, as
described in paragraph 7.5 of the ESA, should the Facility exceed 10 aMW on a
monthly basis, ldaho Power will accept the energy (lnadvertent Energy) that does not
exceed the Maximum Capacity Amount, but will not purchase or pay for this lnadvertent
Energy.
8. NSEC has selected May 1, 2015, as the Scheduled Operation Date.
Appendix B. Various requirements have been placed upon Seller in order for ldaho
Power to accept energy deliveries from this Facility. ldaho Power will continue to
monitor compliance with these requirements. ln addition, ldaho Power will monitor the
ongoing requirements through the full term of this ESA.
9. The ESA, as signed and submitted by the parties thereto, contains non-
levelized published avoided cost rates in conformity with applicable Commission orders.
All applicable interconnection charges and monthly operation and maintenance charges
under Schedule 72will be assessed to NSEC.
AMENDED APPLICATION - 4
9.5. This ESA is the first hydro-based agreement submitted to the
Commission for approva! that contains revised terms and conditions subsequent to the
Commission's final and reconsideration orders from Case No. GNR-E-11-03. As such,
the form of the ESA has several terms and conditions that vary from previously
approved agreements in order to comply with the Commission's recent orders. ln
addition, ldaho Power and the Seller have agreed to changes in some provisions that
the parties propose for Commission approval. The major changes incorporated within
this agreement include:
(a) Changed the definition of "Mid-Columbia Market Energy
Cost" to replace reference to the Dow Jones index with reference to the lntercontinental
Exchange (lCE) index and formula consistent with the proposed settlement in Case No.
IPC-E-13-25. This change is relevant to the 90/110 performance requirement;
(b) Added definitions and provisions, paragraphs 1.29, 1.38,
1.39, 3.4, and 7.6, to incorporate definitions of "Non-seasonal Hydro Facility" and
"Seasona! Hydro Facility" as well as "Seasonal Hydro Facility Test Periods" to
incorporate and maintain separate rates for Seasonal and Non-seasonal hydro facilities,
and to ensure that Seasonal hydro projects perform within the requirement of
generating 55 percent of their annual generation in the months of June, July, and
August;
(c) Removed the provisions providing for Delay Liquidated
Damages and maintained provisions to provide for Delay Security and actual delay
damages as provided for by the Commission's adoption of the partial stipulation in
Commission Order No. 32697;
AMENDED APPLICATION - 5
(d) Changed Article VIll, "Environmental Attributes," to indicate
that the Seller owns all Environmenta! Attributes or Renewable Energy
Cred its/Certificates;
(e) Changed paragraph 6.2 to allow the Seller to adjust the
"lnitial Year Monthly Net Energy Amounts" on a monthly, rather than quarterly, basis.
This change is contrary to the Commission's direction that requires Seller revisions to
be submitted no sooner than "the end of month three and every three months
thereafter." Order No. 29632, p. 23. However, with the proposed change, the Seller
must still provide 12 months of estimated Net Energy Amounts, and still cannot revise
the immediate three months of estimated Net Energy Amounts. However, the Seller
can submit revisions on a monthly basis, rather than once every three months. A table
was added to the ESA indicating both "Notification Month" and "Future monthly Net
Energy Amounts eligible to be revised" primarily to provide clarity to the confusing
nature of the Estimated Net Energy Amounts and a Seller's desire to update the same.
Although this change varies from Order No. 29632, both ldaho Power and the Seller
propose Commission adoption of this change. The Seller gains more clarity and
flexibility in adjusting its estimated energy deliveries, and ldaho Power maintains the
stability in the estimates necessary for its planning and operation;
(f) Revised paragraph 12.4 relating to Scheduled Maintenance
to give the Seller the option to claim maintenance will be scheduled at the same time
each year with one notification, in order to eliminate the requirement of sending multiple
notifications for maintenance that is scheduled for the same time every year; and
AMENDED APPLICATION - 6
(g) Several other more minor revisions were made, such as
moving the list of pricing from paragraph 7.1 to Appendix E and F, adding clarifying
terms in Article X relating to metering and SCADA telemetry, adding a definition for
"Authorized Agent," and adding a provision in the forced outage definition providing for
icing events in the facility's primary motive force water source.
10. The ESA provides that all applicable interconnection charges and monthly
operational or maintenance charges under Schedule 72 will be assessed to Seller. A
Schedule 72 Generator lnterconnection Agreement, or "GlA," between NSEC and ldaho
Power was executed on July 29, 2013. PURPA QF generation must be designated as a
network resource ('DNR') to serve ldaho Power's retail load on its system. In order for
the Facility to maintain its DNR status, there must be a power purchase agreement
associated with its transmission service request in order to maintain compliance with
ldaho Power's non-discriminatory administration of its Open Access Transmission Tariff
(OATT) and maintain compliance with FERC requirements.
11. Article 21 of the ESA provides that the ESA will not become effective until
the Commission has approved all of the ESA's terms and conditions and declared that
all payments ldaho Power makes to NSEC for purchases of energy will be allowed as
prudently incurred expenses for ratemaking purposes.
IV. MODIFIED PROCEDURE
'12. ldaho Power believes that a hearing is not necessary to consider the
issues presented herein and respectfully requests that this Application be processed
under Modified Procedure; i.e., by written submissions rather than by hearing. RP 201
AMENDED APPLICATION - 7
ef seg. lf, however, the Commission determines that a technical hearing is required, the
Company stands ready to prepare and present its testimony in such hearing.
V. COMMUNICATIONS AND SERVICE OF PLEADINGS
13. Communications and service of pleadings, exhibits, orders, and other
documents relating to this proceeding should be sent to the following:
Donovan E. Walker
Lead Counsel
ldaho Power Company
1221West ldaho Street
P.O. Box 70
Boise, ldaho 83707
dwal ker@idahopower. co m
Randy C. Allphin
Energy Contract Ad min istrator
ldaho Power Company
1221West ldaho Street
P.O. Box 70
Boise, ldaho 83707
[e-mail]
VI. REQUEST FOR RELIEF
14. ldaho Power respectfully requests that the Commission issue an order:
(1) authorizing that this matter may be processed by Modified Procedure; (2) accepting
or rejecting the Energy Sales Agreement between ldaho Power and NSEC, without
change or condition; and, if accepted, (3) declaring that all payments for purchases of
energy under the Energy Sales Agreement between ldaho Power and NSEC be allowed
as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this 27th day of
DONOVAN E. WALKER
Attorney for ldaho Power Company
AMENDED APPLICATION - 8
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 27th day of May 20141 served a true and correct
copy of the within and foregoing AMENDED APPLICATION upon the following named
parties by the method indicated below, and addressed to the following:
Head of U Canal Project
Alan W. Hansten, Manager
North Side Canal Company
921 North Lincoln
Jerome, ldaho 83338
Hand DeliveredX U.S. Mail
_Overnight Mai!
FAX
Email [e-mail]
AMENDED APPLICATION - 9