20150415final_order_no_33274.pdf

Office of the Secretary
Service Date
April 15,2015
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY’S APPLICATION TO APPROVE )CASE NO.IPC-E--15-1O
AMENDMENTS TO POWER PURCHASE )
AGREEMENTS REGARDING THE MID.-)ORDER NO.33274
COLUMBIA MARKET INDEX )
On April 2,2015,Idaho Power Company filed an Application asking the Commission
to approve Amendments to three Power Purchase Agreements (PPAs)with generating projects
that reference the Dow Jones Mid-Columbia (Mid-C)Market Energy Cost prices.Idaho Power
states that the Amendments are “virtually identical,and cover the same issue as those submitted
and approved”in the settlement stipulation in Case No.IPC-E-13-25,and the First Amendment
to Idaho Power’s Agreement with United Materials of Great Falls in Case No.1PC-E-14-21.
Application at 1.With this Order,the Commission approves the Amendments without further
process.
BACKGROUND
The PPAs at issue in this case were approved in the following cases and Orders:
Seller Case Number PPA Approval Order
Raft River Energy I LLC IPC-E-07-l7 Order No.30485
USG Oregon LLC IPC-E-09-34 Order No.31087
Hidden Hollow Energy LLC IPC-E-05-29 Order No.29928
See id.at 2.Hidden Hollow is a qualifying facility (QF)under the Public Utility Regulatory
Policies Act (PURPA).Order No.29928 at 1.USG Oregon’s and Raft River’s PPAs are not
PURPA contracts.Order Nos.31087 at 2;30485 at 2-6.
Each of the three PPAs makes reference to the Dow Jones “Market Energy Cost”or
“Mid-C Market Energy Cost”price.Application at 2.In the Hidden Hollow PPA,calculation of
the Market Energy Cost is defined by reference to the “Dow Jones Mid-C Index”prices for non
firm energy,and correlates to Idaho Power’s tariff Schedule 86,Cogeneration and Small Power
Production of Non-Firm Energy.Id.In October 2013,publication of the Dow Jones Mid-C
Index was discontinued.Id.
On October 24,2013,Idaho Power filed a tariff advice to replace the old reference to
the Dow Jones Mid-C market index in its Schedule 86.Order No.32945.The matter was
ORDER NO.33274 1
processed under Modified Procedure in Case No.IPC-E-13-25.The parties to that case executed
a stipulation to change the market index reference to the “Intercontinental Exchange (“ICE”)
Mid-Columbia Index.”Application at 3.The stipulation included a “revised formula for
calculating the non-firm price in Schedule 86.”Id.The parties also agreed “to amend the
[PPAs]between Idaho Power and each intervening party to reference the newer ICE index using
the same language as,and consistent with,the Schedule 86 language agreed upon in the
Stipulation.”Id.
The Commission approved the stipulation in Order No.33053.In that Order,the
Commission found it reasonable to allow amendment of any other existing PPA with Idaho
Power that contains reference to “the Dow Jones non-firm Mid-C electricity price index,”and
“to amend their respective agreements consistent with the terms of this Settlement Stipulation.”
Order No.33053 at4.
PROPOSED AMENDMENTS
Idaho Power agreed with the three applicable sellers,to amend their separate PPAs to
include the reference to the newer ICE index and revised formula,adopted for tariff Schedule 86,
as approved in IPC-E-13-25.Application at 3.The Amendments provide for the switch to,and
use of,the agreed upon ICE index,from the time that the Dow Jones index was discontinued.Id.
Idaho Power made a similar request in Case No.IPC-E-14-21.In that case,Staff
recommended that the Commission approve the proposed Amendments without further process.
In this case,Idaho Power asked that its proposed Amendments be approved upon Staffs review,
without further process,as in IPC-E-14-21.
STAFF RECOMMENDATION
Commission Staff reviewed the Application and corresponding Amendments.Staff
determined that these Amendments are consistent with prior Mid-C PPA amendments approved
by the Commission.Order Nos.33053,33184.Therefore,Staff recommended that the proposed
Amendments be approved without further process.
DISCUSSION AND FINDINGS
The Idaho Public Utilities Commission has jurisdiction over Idaho Power 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
ORDER NO.33274 2
has authority under PURPA and the implementing regulations of the Federal Energy Regulatory
Commission (FERC)to review and approve QF contracts.
Based upon our review of the Application,the three underlying Agreements,and
Staffs recommendation,we find it reasonable to grant the parties’request to amend their
respective PPAs noted above.In our prior Orders,we have recognized that the Dow Jones Mid-
C Index has been discontinued.The parties’PPAs anticipated this possibility by including a
provision in each PPA that stated if the Dow Jones Mid-C Index “is discontinued by the
reporting agency both Parties will mutually agree upon a replacement index...“Consistent
with this provision of their agreements,the parties proposed to replace the Dow Jones Index with
the Intercontinental Exchange (ICE)Mid-Columbia Index.Having agreed upon a suitable
replacement index,we find it reasonable to amend the underlying PPAs by adopting the
reference to the newer ICE Index and to revise the formula for calculating the non-firm price in
tariff Schedule 86.See Order Nos.33053 and 33184.
We also agree with the parties that it is reasonable to utilize the new ICE Index from
the time the Dow Jones Index was discontinued.Consistent with our prior Orders reviewing this
matter,we find it is reasonable to approve the Amendments without further process.
ORDER
IT IS HEREBY ORDERED that Idaho Power’s Application to approve Amendments
to its three PPAs regarding the reference to the Mid-C Market Index is granted.
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.
ORDER NO.33274 3
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
PAUL KJELLAN ER,PRESIDENT
.--
MACK A.REDFORD,COMMISSIONER
ATTEST:
ommission Secretary
O:IPC-E-1 5-lOdjh
4AOJ
KR TINE RAPER,COMMISSIONER
day of April 2015.
-‘
ORDER NO.33274 4