20160114notice_of_application_order_no_33451.pdf

Office of the Secretary
Service Date
January 14,2016
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER’S )CASE NO.IPC-E-16-O1
APPLICATION TO APPROVE OR REJECT )
ENERGY SALES AGREEMENT WITH J.R.)NOTICE OF APPLICATION
SIMPLOT COMPANY FOR THE SALE )
AND PURCHASE OF ELECTRIC ENERGY )NOTICE OF
)MODIFIED PROCEDURE
)
______________________________
)ORDER NO.33451
On January 6,2016,Idaho Power Company filed an Application asking the
Commission to accept or reject its Energy Sales Agreement with J.R.Simplot Company.The
Agreement is for the sale and purchase of electric energy generated by the SimplotPocatello
cogeneration project,a “qualifying facility”(QF)as defined under the Public Utility Regulatory
Policies Act (PURPA),located near Pocatello,Idaho.Idaho Power requests that its Application
be processed by Modified Procedure.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that,on January 4,2016,Idaho Power entered into
an Agreement with Simplot,subject to this Commission’s approval,and pursuant to the terms
and conditions of various Commission Orders and PURPA.Application at 2.Under PURPA,
electric utilities must purchase electric energy from QFs at rates approved by 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,citing Rosebud
Enterprises v.Idaho PUC,128 Idaho 624,917 P.2d 781 (1996);18 C.F.R.§292.101(b)(6)
(defining “avoided cost”).
YOU ARE FURTHER NOTIFIED that the Agreement between Idaho Power and
Simplot replaces an existing contract that expires March 1,2016.Application at 2.Under the
terms of the Agreement,Simplot elected to contract with Idaho Power for a three-year term using
non-levelized,“published”avoided cost rates.Id.at 4.The Commission establishes “published”
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33451 1
avoided cost rates using the “SAR methodology,”for wind and solar QFs with a design capacity
of up to 100 kilowatts (kW),and for QFs of all other resource types with a design capacity of up
to 10 average megawatts (aMW).Order No.32697 at 7-8.The Simplot-Pocatello cogeneration
project is an “other resource type”QF.Application at 2.The Agreement thus uses the “other”
published avoided cost rates,as established by the Commission in Order No.33305,for energy
deliveries of less than 10 aMW.Id.at 4,
YOU ARE FURTHER NOTIFIED that the nameplate rating of the Simplot-Pocatello
Project is 15.9 megawatts (MW),however,Simplot agrees not to exceed 10 aMW on a monthly
basis.Id.at 4.If the facility does exceed the monthly 10 aMW limit,Simplot agrees that “Idaho
Power will accept the energy (Inadvertent Energy)that does not exceed the Maximum Capacity
Amount,but will not purchase or pay for this Inadvertent Energy.”Id.
YOU ARE FURTHER NOTIFIED that the Commission has found it “reasonable,
appropriate,and in the public interest to compensate QFs”based on the capacity they provide to
the purchasing utility,as well as the energy they produce.Order No.32697 at 16.In calculating
capacity payments,the Commission considers the utility’s “capacity deficiency”based on load
and resource balances in the utility’s Integrated Resource Plan (IRP),as well as the “QF’s ability
to contribute to [the]utility’s need for capacity.”Id.at 16,21.Because the Agreement in this
case is a replacement contract,2 its rates include capacity payments throughout the contract’s
term.Application at 3.
YOU ARE FURTHER NOTIFIED that the facility is already interconnected and
selling energy to Idaho Power,thus the Agreement specifies a Scheduled First Energy Date and
Scheduled Operation date of March 1,201 6,but no later than 120 days after Commission
approval in a final,non-appealable Order.Id.at 5.
YOU ARE FURTHER NOTIFIED that the terms and provisions of the Agreement
include that “applicable interconnection charges and monthly operation and maintenance charges
The SAR methodology uses a “surrogate avoided resource”to calculate standardized avoided cost rates for QFs
with design capacities under prescribed limits.See Order No.32697 at 7-8;see also 18 C.F.R.§292.304(c).
2 The Simplot-Pocatello cogeneration project has been in operation since at least 1991,and has thus been
contributing to Idaho Power’s system capacity for many years.See Order Nos.23552,25353,28730,29577,30028,
32790,33240,
See Appendix B at 38.The Application contains a typographical error,indicating a First Energy and Scheduled
Operation Date of March 1,2015.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33451 2
under Schedule 72 will be assessed to Simplot.”Id.Also,PURPA QF generation “must be
designated as a network resource (DNR)to serve Idaho Power’s retail load on its system.”Id.at
5-6.To maintain DNR status,“there must be a power purchase agreement associated with [the
project’s]transmission service request that maintains compliance with Idaho Power’s non
discriminatory administration of its Open Access Transmission Tariff (OATT)and maintains
compliance with [Federal Energy Regulatory Commission]FERC requirements.”Id.at 6.
YOU ARE FURTHER NOTIFIED that,by its own terms,the Agreement will not
become effective “until the Commission has approved all of [its]terms and conditions and
declared that all payments Idaho Power makes to Simplot for purchases of energy will be
allowed as prudently incurred expenses for ratemaking purposes.”Id.
YOU ARE FURTHER NOTIFIED that the Application and a copy of the Agreement
have been filed with the Commission and are available for public inspection during regular
business hours at the Commission offices.The Application and attachments are 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 the type of “Open Electric Cases,”and then click on the case number as
shown on the front of this document.
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 3 1.01.01.201-204.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 in opposition with the Commission within
21 days from the service 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 may be mailed to the
Commission and Idaho Power at the addresses reflected below:
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33451
Commission Secretary Donovan E.Walker
Idaho Public Utilities Commission Lead Counsel
P0 Box 83720 Randy C .Allphin
Boise,ID 83720-0074 Energy Contract Administrator
Idaho Power Company
Street Address for Express Mail:P0 Box 70
Boise,ID 83 707-0070
472 W.Washington Street F-mail:dwalker(idahopower.corn
Boise,ID 83702-5918 [e-mail]
rallphini)idahopower.corn
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 borne page located at www.puc.idaho.gov.Click the “Case Comment or Question
Form”under the “Consumers”tab,and complete the form using the case number as it appears on
the front of this document.These comments must also be sent to the Company at the e-mail
addresses listed above.
YOU ARE FURTHER NOTIFIED that Idaho Power may file reply comments,if
necessary,no later than 28 days from the service date of this Order.
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
set,the Commission will consider them and,in its discretion,may set the same for formal
hearing.
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 specifically
Idaho Code §61-503.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
ORDERNO.33451 4
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure.
interested persons may file written comments no later than 21 days from the service date of this
Order.Idaho Power may file a reply,if necessary,no later than 28 days from the service date of
this Order.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of January 2016,
ATTEST:
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NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33451
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