20141216final_order_no_33192.pdf

Office of the Secretary
Service Date
December 16,2014
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR )CASE O.IPC-E-14-40
APPROVAL OR REJECTION OF THE )
AMENDMENTS TO VARIOUS FIRM )
ENERGY SALES AGREEMENTS )ORDER NO.33192
REGARDING THE MID-C MARKET INDEX.)
________________________________________________________________________________________
)
Idaho Power filed an Application with the Commission on November 25,2014,
requesting that the Commission issue an Order approving amendments to three Firm Energy
Sales Agreements (FESAs,Agreements)between Idaho Power and PURPA qualifying facilities
(QFs).Idaho Power states that these amendments are virtually identical,and address the same
issue as those submitted and approved as part of the settlement stipulation in Case No.IPC-E-13-
25 and the approved amendments in Case Nos.IPC-E-14-21 and IPC-E-14-37.
B this Order,we approve the Amendments to the Agreements between Idaho Power
and (1)Tiber Montana (Order No.29232);(2)Idaho Water Resource Board (Order No.29766);
and (3)Idaho Water Resource Board (Order No.29767)for the sale and purchase of electric
energy.
THE APPLICATION
As a preliminary matter,on February 18,2005,Pristine Springs,Inc.,entered into
two separate Firm Energy Sales Agreements with Idaho Power (Agreements 2 and 3).The
Agreements were approved by the Commission on April 25,2005.On April 4,2008,Pristine
Springs and Idaho Water Resource Board entered into an Assignment and Assumption of
Agreements,Permits and Licenses providing for,among other things,assignment of all rights,
titles and interest of Pristine Springs under the Original Agreement.Upon Commission approval
of the amendments in this case,Idaho Power consents to the substitution of Idaho Water
Resource Board for Pristine Springs in each of the Agreements.
Idaho Power states that each of the three Agreements contains 90/110 firmness
requirements that apply a “Market Energy Cost”price to energy deliveries that do not meet the
90/110 requirements.The FESAs define market energy cost with reference to the Dow Jones
Mid-Columbia Index prices for non-firm energy.Idaho Power states that the Agreements’
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provisions for surplus energy and market energy cost generally correlate to Idaho Power’s
Schedule 86,Cogeneration and Small Power Production Non-Firm Energy.
The Dow Jones Mid-Columbia Index was discontinued by the publisher as of October
2013.Case No.IPC-E-13-25 was initiated to address a replacement market index reference for
the non-firm energy price utilized in Idaho Power’s Schedule 86.The parties to IPC-E-13-25
executed a settlement stipulation,approved by the Commission in Order No.33053,which sets
forth reference to the Intercontinental Exchange (ICE)Mid-Columbia index prices,with a
revised formula for calculating the non-firm price in Schedule 86.In addition,the parties to IPC
E-13-25 agreed to amend the FESAs between Idaho Power and each intervening party to
reference the ICE index using the same language as,and consistent with,the Schedule 86
language agreed upon in the stipulation.In approving the stipulation,the Commission stated
“We also find it reasonable to allow any additional existing PURPA QFs that currently have a
contract with Idaho Power containing reference to the Dow Jones non-firm Mid-C electricity
price index,should they so choose,to amend their respective agreements consistent with the
terms of this Settlement Stipulation and similar to the contract amendments approved by this
Order.”Order No.33053 at 4.
Idaho Power and each QF have agreed to amend their FESAs to include the reference
to the ICE index and revised formula that was adopted for Schedule 86 in Case No.TPC-E-13-25.
The Amendments set forth,virtually verbatim,the provisions from Schedule 86 to define
“Market Energy Cost”and/or “Mid-Columbia Market Energy Cost”as appropriate for each
Agreement.
Pursuant to the FESAs which require both parties to agree upon a replacement index
should the Dow Jones index be discontinued,an effective date of October 2013 for use of the
ICE index and calculation referenced in the Amendments is requested.Idaho Power explains
that this would provide for use of the agreed upon ICE index from the time the Dow Jones index
was discontinued.
FINDINGS AND CONCLUSIONS
The Idaho Public Utilities Commission has jurisdiction over Idaho Power,an electric
utility,and the issues raised in this matter pursuant to the authority and power granted it under
Title 61 of the Idaho Code and the Public Utility Regulatory Policies Act of 1978 (PURPA).The
Commission has authority under PURPA and the implementing regulations of the Federal
ORDERNO.33192
Energy Regulatory Commission (FERC)to set avoided costs,to order electric utilities to enter
into fixed-term obligations for the purchase of energy from qualified facilities (QFs)and to
implement FERC rules.The Commission is also empowered to resolve complaints between QFs
and utilities and approve QF contracts.
Staff reviewed Idaho Power’s Application and the pertinent Agreements.Staff
reiterated that,prior to the filing of the 13-25 case,McGraw Hill Financial,the publisher of both
the Dow Jones and Platts indices,provided notice to Idaho Power that it was discontinuing
publication of the Dow Jones non-firm index and transitioning to use of the Platts non-firm
index.Idaho Power’s Schedule 86 and a number of power purchase/energy sales agreements
(PPAs)contain language with reference to the Dow Jones Mid-C in determining an “Avoided
Energy Cost.”The pertinent PPAs state that,“If the Dow Jones Mid-Columbia Index price is
discontinued by the reporting agency,both Parties [to the contract]will mutually agree upon a
replacement index,which is similar to the Dow Jones Mid-Columbia Index.”
The parties to the 13-25 case entered into a settlement stipulation that agreed to an
acceptable substitution for the discontinued Dow Jones index —to be applied to both Idaho
Power’s Schedule 86 and the power purchase/energy sales agreements of QFs who were parties
in the 13-25 case.The Commission approved the settlement stipulation by Order No.33053 and
specifically found it reasonable for any existing PURPA QFs that currently have a similar
contract with Idaho Power to amend their respective agreements consistent with the terms of the
settlement stipulation.Order No.33053 at 4.
We find that the language in each of the three Amendments is consistent with the
terms and conditions approved by the Commission in Order No.33053.We further find that an
effective date of October 2013 is appropriate.Based on the Commission’s prior determination of
reasonableness in IPC-E-13-25 and corresponding terms and conditions in the proposed
Amendments,we approve the Amendments without further process.We further acknowledge
(based on consent by all parties to the contracts)the substitution of Idaho Water Resource Board
for Pristine Springs in Agreements 2 and 3.
ORDER
IT IS HEREBY ORDERED that the Amendments to the Agreements between Idaho
Power Company and Tiber Montana (Order No.29232);Idaho Water Resource Board (Order
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No.29766);and Idaho Water Resource Board (Order No.29767)are approved without further
process.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §6 1-626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this /i
day of December 2014.4v
PAUL KJELLANDER PRESIDENT
MACK A.REDFORtC6MM1S STONER
MARSHA H.SMITH,COMMISSIONER
ATTEST:
/
((-i-
Jean D Jewell
Commission Secretary
O:IPC-E-I 4-4Oks
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