HomeMy WebLinkAbout20140820notice_of_application.pdfOffice of the Secretary
Service Date
August 20,2014
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR )CASE NO.IPC-E-14-19
APPROVAL OR REJECTION OF AN )
ENERGY SALES AGREEMENT WITH )
GRAND VIEW PV SOLAR TWO,LLC,)NOTICE OF APPLICATION
FOR THE SALE AND PURCHASE OF )
ELECTRIC ENERGY.)
_____________________________________________________________________________________
)
On July 25,2014,Idaho Power filed an Application with the Commission for
approval or rejection of an energy sales agreement with Grand View PV Solar Two,LLC,for the
sale and purchase of electric energy.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that Idaho Power requests that the Commission
accept or reject the Energy Sales Agreement between Idaho Power and Grand View PV Solar
Two,LLC (Grand View),under which Grand View would sell and Idaho Power would purchase
electric energy generated by Grand View’s 80 megawatt (MW)solar photovoltaic project located
approximately 20 miles southwest of Mountain Home,Idaho.The Agreement between the
parties was executed on July 17,2014.
YOU ARE FURTHER NOTIFIED that the Agreement is for a term of 20 years.
Idaho Power states that the Agreement was executed in compliance with the Commission’s
Orders directing the implementation of PURPA for the State of Idaho and contains negotiated
avoided cost rates based upon the incremental cost,integrated resource plan pricing methodology
available to solar projects whose generation will exceed 100 kilowatts (kW).Idaho Power
explains that the Agreement also contains negotiated solar integration charges as directed by the
Commission in Order No.33043,as well as several other negotiated provisions requiring
specific Commission approval.
YOU ARE FURTHER NOTIFIED that the proposed project is expected to consist of
approximately 340,480 polysilicon photovoltaic panels installed on a single axis tracking system,
supported by a fixed post and beam structure.Grand View selected July 1,2016,as its
Scheduled Operation Date.Various requirements have been placed upon Grand View in order
NOTICE OF APPLICATION 1
for Idaho Power to accept energy deliveries from the project.Idaho Power states that it will
continue to monitor compliance with these requirements throughout the term of the Agreement.
YOU ARE FURTHER NOTIFIED that Idaho Power explains that this Agreement is
the first of its type submitted for approval that contains negotiated avoided cost rates based upon
the incremental cost,integrated resource plan pricing methodology.Prices were determined on
an incremental basis with the inclusion of this project in its queued position of proposed projects
on Idaho Power’s system.Over the 20-year term of the Agreement,monthly rates vary from
approximately $3 1/megawatt hour (MWh)for light load hours in early months of the Agreement
to as high as $1 59/MWh for heavy load hours in the later years of the Agreement.The
equivalent 20-year levelized avoided cost rate would amount to approximately $73.4 1/MWh.
YOU ARE FURTHER NOTIFIED that the Agreement also contains a solar
integration charge that was negotiated and agreed to by the parties.Although the integration
charge is based on Idaho Power’s solar integration study,the study was not yet complete during
contract negotiations.However,the most currently available data and analysis from the study
was used by the parties in the course of negotiations.The negotiated solar integration charge
starts at $0.99/MWh for the first year of the Agreement (2015)and escalates to $1.84/MWh in
2036.The equivalent 20-year levelized solar integration charge would amount to approximately
$1 .28/MWh.Idaho Power states that the 20-year estimated contractual obligation based upon
estimated generation levels,including avoided cost rates and solar integration charges,is
approximately $310,237,634.
YOU ARE FURTHER NOTIFIED that the Agreement does not contain a 90/110
firmness requirement;instead it contains provisions for a Mechanical Availability Guaranty
(MAG),solar forecasting fees,solar integration charge,and a pricing adjustment.Idaho Power
states that it prefers that 90/110 firmness be included in all PURPA QF agreements.The project
preferred a MAG and forecasting costs.Idaho Power maintains that the use of a MAG is not a
replacement for the firmness determinations of the 90/110 provisions;however,based on
negotiations and an agreed to price adjustment,the Company states that it is comfortable and
confident that the Agreement contains provisions to reasonably assure that the project performs
in conformance with its generation estimates and,if not,the project receives a reduced price for
the non-conforming month’s generation.The Agreement allows for a five (5)percent deviation
in the monthly net energy deliveries from the generation profile estimates without assessing a
NOTICE OF APPLICATION 2
price adjustment.If the project’s actual generation deviates downward by more than 5%of its
generation estimates,then a corresponding percentage adjustment to the monthly price is
imposed.However,the adjustment is limited to a maximum price reduction of 10%.Idaho
Power states that consistent and material deviations from the hourly energy estimates in the
generation profile will be considered by Idaho Power to be a material breach of the Agreement.
YOU ARE FURTHER NOTIFIED that new provisions providing for actual delay
damages as opposed to liquidated damages are included in the Agreement,consistent with Order
No.32697.The parties negotiated a 50/50 split of environment attributes (aka renewable energy
credits).As with all PURPA QF generation,the project must be designated as a network
resource (DNR)to serve Idaho Power’s retail load on its system.Consequently,the Agreement
contains provisions requiring completion of a Generator Interconnection Agreement (GIA),
compliance with GIA requirements,and designation as an Idaho Power network resource as
conditions of Idaho Power accepting delivery of energy and paying for the same under the
Agreement.In order for the project to maintain its DNR status,there must be a power purchase
agreement associated with its transmission service request that maintains compliance with Idaho
Power’s non-discriminatory administration of its Open Access Transmission Tariff (OATT)and
maintains compliance with FERC requirements.
YOU ARE FURTHER NOTIFIED that Article 21 of the Agreement provides that the
Agreement will not become effective until the Commission has approved all of the Agreement’s
terms and conditions and declared that all payments Idaho Power makes to Grand View for
purchases of energy will be allowed as prudently incurred expenses for ratemaking purposes.
YOU ARE FURTHER NOTIFIED that the Application and supporting workpapers
have been filed with the Commission and are available for public inspection during regular
business hours at the Commission offices.The Application is also available on the
Commission’s web site at www.puc.idaho.gov.Click on the “File Room”tab at the top of the
page,scroll down to “Open Electric Cases,”and then click on the case number as shown on the
front of this document.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission’s jurisdiction under Title 61 of the Idaho Code and that the
Commission may enter any final order consistent with its authority under Title 61.
NOTICE OF APPLICATION 3
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission’s Rules of Procedure,IDAPA 31.O1.OL000,et seq.
DATED at Boise,Idaho this 2(f day of August 2014.
7’77 7’
/
Jean D Jewell
Càmmission Secetary
N:IPC-E-14-l9ks
NOTICE OF APPLICATION 4