20141002Comments.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:
472W. WASHINGTON
BOISE, IDAHO 83702-5918
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 BLACK CANYON BLISS,
LLC, FOR THE SALE AND PURCHASE OF
ELECTRIC ENERGY FROM THE BLACK
CANYON BLISS HYDRO PROJECT.
?tll!r OCT -2 pt'
CASE NO. IPC-8.I4-23
COMMENTS OF THE
COMMISSION STAFF
26
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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 Notice
of Application and Notice Modified Procedure issued in Order No. 33124 on September 9,2074,
in Case No. IPC-E-14-23, submits the following comments.
BACKGROUND
On August 27,2014,Idaho Power Company (Company) filed an Application requesting
that the Commission accept or reject an Agreement between Idaho Power and Black Canyon
Bliss, LLC (Black Canyon), for the sale and purchase of electric energy generated by the Black
Canyon Bliss Hydro Project.
On August 19,2074,Idaho Power and Black Canyon entered into an Agreement pursuant
to the terms and conditions of various Commission Orders applicable to PURPA agreements for
non-seasonal hydro projects. Idaho Power states that Black Canyon proposes to operate and
STAFF COMMENTS OCTOBER 2,2014
maintain a24.82 kilowatt (kW) non-seasonal hydro energy facility to be located near Bliss,
Idaho. The Company maintains that the project will be a qualified facility (QF) under the
applicable provisions of the Public Utility Regulatory Policies Act (PURPA).
Under the terms of the Agreement, Black Canyon elected to contract with Idaho Power
for a2l-year term using the non-levelized other published avoided cost rates as currently
established by the Commission in Order No. 33084 for energy deliveries of less than l0 average
MW (aMW). Black Canyon has selected November 15,2014, as the project's Scheduled
Operation Date. Various requirements have been placed upon Black Canyon in order for Idaho
Power to accept energy deliveries from this facility. Idaho Power will monitor compliance with
these requirements. Idaho Power will continue to monitor the ongoing requirements throughout
the term of the Agreement.
The Agreement provides that all applicable interconnection charges and monthly
operational or maintenance charges under Schedule 72 will be assessed to Black Canyon. A
Schedule 72 Generator Interconnection Agreement (GIA) between Black Canyon and Idaho
Power was executed on April22,2013. Idaho Power states that PURPA QF generation must be
designated as a network resource (DNR) to serve Idaho Power's retail load on its system. In
order for the facility to maintain its DNR status and maintain compliance with Idaho Power's
non-discriminatory administration of its Open Access Transmission Tariff (OATT) and FERC
requirements there must be a power purchase agreement (PPA) associated with its transmission
service request.
Article 21 of the Agreement provides that the PPA will not become effective until the
Commission has approved all terms and conditions and declared that all payments Idaho Power
makes to Black Canyon for purchases of energy will be allowed as prudently incurred expenses
for ratemaking purposes.
STAFF ANALYSIS
This project is exceedingly small. The nameplate capacity of the facility is 29.82 kW,
whereas the maximum capacity is24.82 kW. Idaho Power explained through email
correspondence that the maximum capacity is lower than the nameplate capacity due to the
physical limitations of the facility location.
The project will be located at the same site once occupied by two other small hydro
facilities. Those facilities were destroyed by a landslide in 1993, and the power sales agreements
STAFF COMMENTS OCTOBER 2,2014
were eventually terminated. In addition, the owner of those facilities is now deceased. Other
than sharing a common site, there is neither connection between the Black Canyon project and
the prior projects nor relationship between the two owners.
The Agreement adopts the non-levelized published avoided cost rates for non-seasonal
hydro facilities in accordance with Commission Order No. 33084, which utilizes July 2021as the
Company's first capacity deficit year in its surrogate avoided resource methodology. Staff has
reviewed the proposed rates and confirms they are correct. All other terms and conditions
contained in the proposed Agreement are consistent with prior Commission orders.
RECOMMENDATIONS
Staff recommends that the Commission approve all of the Agreement's terms and
conditions and declare that all payments made by Idaho Power to Black Canyon for the purchase
of energy will be allowed as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this P day of October 2014.
Technical Rick Sterling
Yao Yin
i :umisc:comments/ipce I 4.23ksrpsyy comments
Deputy Attorney General
STAFF COMMENTS OCTOBER 2,2014
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 2,D DAY oF oCTOBER 2014,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E.14-23, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
DONOVAN E. WALKER
REGULATORY DOCKETS
IDAHO POWER COMPANY
P.O. BOX 70
BOISE, ID 83707
E-MAIL: [e-mail]
dockets@ idahopower. com
RANDY C. ALLPHIN
ENERGY CONTRACT ADMINISTRATOR
IDAHO POWER COMPANY
PO BOX 70
BOISE rD 83707-0070
E-MAIL: [e-mail]
CERTIFICATE OF SERVICE