20150724notice_of_application_order_no_33343.pdf

Office of the Secretary
Service Date
July 24,2015
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )CASE NO.IPC-E-15-20
COMPANY’S APPLICATION FOR )
APPROVAL OF CAPACITY DEFICIENCY )NOTICE OF APPLICATION
TO BE USED FOR AVOIDED COST )
CALCULATIONS )NOTICE OF
)MODIFIED PROCEDURE
)
_____________________________
)ORDER NO.33343
On July 2,2015,Idaho Power Company filed an Application with the Commission
for an Order approving the capacity deficiency period to be used for the Company’s avoided cost
calculations under the Public Utility Regulatory Policies Act (PURPA).The Company asked
that the Application be processed under Modified Procedure.
BACKGROUND
Under PURPA,electric utilities must purchase electric energy from qualifying
facilities (QFs)at rates approved by the applicable state regulatory agency —in Idaho,this
Commission.16 U.S.C.§824a-3;Idaho Power Co.v.Idaho PUC,155 Idaho 780,789,316
P.3d 1278,1287 (2013).The purchase or “avoided cost”rate shall not exceed the “‘incremental
cost’to the purchasing utility of power which,but for the purchase of power from the QF,such
utility would either generate itself or purchase from another source.”Order No.32697 at 7,
cuing Rosebud Enterprises v.Idaho PUC,128 Idaho 624,917 P.2d 781 (1996);18 C.F.R.§
292.101(b)(6)(defining “avoided cost”).
In calculating avoided cost,the Commission found it “reasonable,appropriate and in
the public interest to compensate QFs separately based on a calculation of not only the energy
they produce,but the capacity that they can provide to the purchasing utility.”Order No.32697
at 16.As to the capacity calculation,the Commission found it appropriate “to identify each
utility’s capacity deficiency based on load and resource balances found in each utility’s IRP.”
Id.The Commission elaborated:
In calculating a QF’s ability to contribute to a utility’s need for capacity,we
find it reasonable for the utilities to only begin payments for capacity at such
time that the utility becomes capacity deficient.If a utility is capacity surplus,
then capacity is not being avoided by the purchase of QF power.By including
a capacity payment only when the utility becomes capacity deficient,the
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33343 1
utilities are paying rates that are a more accurate reflection of a true avoided
cost for the QF power.
Id.at 21.
The Commission directed that “when a utility submits its [IRP]to the Commission,a
case shall be initiated to determine the capacity deficiency to be utilized in the SAR
Methodology.”Id.at 23.The Commission also stated utilities must update fuel price forecasts
and load forecasts annually —between IRP filings....We find it reasonable that all other
variables and assumptions utilized within the IRP Methodology remain fixed between IRP filings
(every two years).”Id.at 22.
In 2014,the Commission confirmed July 2021 as Idaho Power’s capacity deficiency
period for use in the incremental cost IRP methodology.Order No.33159 at 9.
NOTICE OF PETITION
YOU ARE HEREBY NOTIFIED that Idaho Power states it “currently utilizes a first
capacity deficit of July 2021.”Application at 2.Also,the Company notes that it filed its 2015
IRP (Case No.IPC-E-15-19)with the Commission on June 30,2015.According to Idaho
Power,its 2015 IRP “identifies the first capacity deficit occurring in July 2025.”Id.
YOU ARE FURTHER NOTIFIED that Idaho Power’s Application includes Table 1,
which shows a first capacity deficiency of 14 [MW]occulTing in July 2025.”Id.at 3.
According to the Company,this “includes 461 MW of PURPA solar that was under contract
when the analysis of Table I was completed for the 2015 IRP.”Id.However,after Table I was
developed in the 2015 IRP,“four PURPA Energy Sales Agreements (“ESAs”)were terminated
due to failure of the projects to perform”per their terms and provisions.Id.,citing Case No.
iPC-E-l4-28,IPC-E-14-29,IPC-E-14-30,and IPC-E-14-31.Idaho Power provides that the
“total amount of capacity for these four terminated ESAs was 141 MW.”Id.at 3-4.
YOU ARE FURTHER NOTIFIED that Idaho Power’s Application also includes
Table 2,which shows an “updated peak-hour surplus/deficit chart,”reflecting removal of the 141
MW of PURPA.Id.at 4.Idaho Power states,“Removal of the 141 MW of terminated PURPA
solar projects results in a first capacity deficit of 47 MW in July 2024,one year earlier than that
shown in Table 1 and the 2015 IRP.”Id.The Company asks that “a first capacity deficit of July
2024 be utilized for avoided cost calculations for both the SAR and IRP methodologies.”Id.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33343
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission’s Rules
of Procedure,IDAPA 31.01.01.201 through .204.The Commission notes that Modified
Procedure and written comments have proven to be an effective means for obtaining public input
and participation
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission within
twenty-eight (28)days from the date of this Order.The comment must contain a statement of
reasons supporting the comment.Persons desiring a hearing must specifically request a hearing
in their written comments.Written comments concerning this Application shall be mailed to the
Commission and the Applicant at the addresses reflected below:
Commission Secretary Donovan E.Walker
Idaho Public Utilities Commission Randy Allphin
P0 Box 83720 Tess Park
Boise,ID 83 720-0074 Idaho Power Company
1221 West Idaho Street
Street Address for Express Mail:P.O.Box 70
Boise,ID 83707
472 W.Washington Street E-mail:
Boise,ID 83702-5918 [e-mail]
ida1oower.com
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission’s home page located at ucidaho.gpv.Click the “Case Comment or Question
Form”under the “Consumers”tab,and complete the comment form using the case number as it
appears on the front of this document.These comments must also be sent to the Applicant at the
e-mail addresses listed above.
YOU ARE FURTHER NOTIFIED that the Company shall file reply comments,if
necessary,no later than seven (7)days after the deadline for written comments.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set,the Commission will consider this matter on its merits and
enter its Order without a formal hearing.If written comments are received within the time limit
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ORDER NO.33343 3
set,the Commission will consider them and,in its discretion,may set the same for formal
hearing.
YOU ARE FURTHER NOTIFIED that the Application has been filed with the
Commission and is 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,”then click on the case number 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 the Public Utility
Regulatory Policies Act of 1978 (PURPA).The Commission has authority under PURPA and
the implementing regulations of the Federal 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 and to implement FERC rules.The Commission may enter any
final Order consistent with its authority under Title 61 and PURPA.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission’s Rules of Procedure,IDAPA 3 1.01.01.000,etseq.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33343 4
ORDER
IT IS HEREBY ORDERED THAT the Application shall be processed by Modified
Procedure,IDAPA 31.Ol.Ol.201-.204.Persons interested in submitting written comments in this
matter must do so no later than 28 days from the date of this Order.
IT IS FURTHER ORDERED that reply comments by Idaho Power,if any,shall be
due seven days after the deadline for written comments.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of July 2015.
PAUL KJ LANI,PRESIDENT
-LZQ 14LA
KRI INE RAPER,COMMISSIONER
ATTEST:
Jewell’
C mmission Secretary
O:IPC-E-1 5-2Odjh
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33343 5