20141209Comments.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 83702-5918
Attorney for the Commission Staff
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
rDAHO POWER COMPANY FOR APPROVAL ) CASE NO. rPC-E-r4-39
OR REJECTION OF AN ENERGY SALES )
AGREEMENT WITH BLIND CANYON ) COvIMENTS OF THE
AQUARANCH, INC. FOR THE SALE AND ) CO1v1MISSION STAFF
PURCHASE OF ELECTRIC ENERGY. )
)
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attomey of record, Kristine A. Sasser, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure issued in Order No. 33186 on November 26,2014,
in Case No. IPC-E-14-39, submits the following comments.
BACKGROUND
On November 13, 2074,ldaho Power Company filed an Application with the Commission
for approval or rejection of an Energy Sales Agreement with Blind Canyon Aquaranch, Inc. for
the sale and purchase of electric energy from the Blind Canyon Hydro Project.
Idaho Power requests that the Commission accept or reject the Energy Sales Agreement
between Idaho Power and Blind Canyon Aquaranch, Inc. (Blind Canyon), under which Blind
Canyon would sell and Idaho Power would purchase electric energy generated by the project's
STAFF COMMENTS DECEMBER 9,2014
1.625 megawatt (MW) non-seasonal hydro facility located near Wendell, ldaho. The Agreement
between the parties was executed on October 31,2014. The Agreement is for a term of 20 years.
Blind Canyon is currently selling energy to Idaho Power under a2}-year PURPA
agreement that was executed in 1994 and approved by the Commission in January 1995. Order
No. 25852. Blind Canyon has requested a new 2)-year agreement as a PURPA qualifying facility
for a non-seasonal hydro project smaller than 10 average megawatts (aMW). The Agreement
between Idaho Power and Blind Canyon includes full capacity payments pursuant to Commission
Order No. 32697 as a replacement contract.
The nameplate rating of this facility is 1.625 MW. Blind Canyon has selected December
75,2014, as its Scheduled First Energy Date and Scheduled Operation Date in order to maintain
unintemrpted operation after the expiration of its existing agreement. All applicable
interconnection charges and monthly operation and maintenance charges under Schedule 72 will
be assessed to Blind Canyon.
The new Agreement contains revised terms and conditions pursuant to the Commission's
final Orders in Case No. GNR-E-l l-03. These revised conditions are the same or similar to those
recently approved by the Commission in Case Nos. IPC-E-14-06,IPC-E-14-07 and IPC-E-14-12.
The changes include: reference to the ICE index and formula; modified provisions regarding delay
liquidated damages and delay security; ownership of environmental attributes; provisions
providing for revision of initial year monthly net energy amounts on a monthly rather than
quarterly basis; and several other minor changes consistent with Commission Orders.
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.
STAFF COMMENTS DECEMBER 9, 2OI4
STAFF ANALYSIS
The Agreement adopts the non-levelized published avoided cost rates for non-seasonal
hydro replacement contracts. Staff has reviewed the proposed rates and confirms they are correct.
A11 other terms and conditions contained in the 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 Blind Canyon for purchase of
energy will be allowed as prudently incurred expenses for ratemaking purposes. In the event that
this new Agreement is not approved by the Commission in time to meet the Project's December
15,2014 Scheduled First Energy and Scheduled Operation Date, Staff recommends that the parties
continue under the terms of the old Agreement until such time as the Commission issues its final
Order on the proposed Agreement.
Respectfully submitted this q!day of December 2014.
Technical Staff: Rick Sterling
Yao Yin
i :umisc:comments/ipce 14.39ksrpsyy comments
ine A. Sasser
Deputy Attorney General
STAFF COMMENTS DECEMBER9,2OI4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 9TH DAY OF DECEMBER 2014,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E.14-39, 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]
[e-mail]
PAT WINDES
BLIND CANYON AQUARANCH
2757 SOUTH 1O5O EAST
HAGERMAN ID 83332
E-MAIL: jpwindes@ gmail.com
RANDY C. ALLPHIN
ENERGY CONTRACT ADMINISTRATOR
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
CERTTFICATE OF SERVICE