20160317Application.pdf

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An IDACORP Companv
DONOVAN E. WALKER
Lead Gounsel
March 17,2016
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-16-04
New Energy One, LLC - Rock Creek Dairy
ldaho Power Company's Application for Approval of Firm
Agreement Amendment
Dear Ms. Jewell:
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Energy Sales
Enclosed for filing please find an original and seven (7) copies of ldaho Power
Company's Application for Approval of Firm Energy Sales Agreement Amendment in the
above matter.
ly yours,
DEW:csb
Enclosures
1221 W ldaho 5t. (81702)
PO. Box 70
Boise, lD 83707
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalker@ ida hopower.com
Attorney for ldaho Power Company
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR APPROVAL
OF THE SECOND AMENDMENT TO THE
FIRM ENERGY SALES AGREEMENT
BETWEEN IDAHO POWER COMPANY AND
NEW ENERGY ONE, LLC.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. |PC-E-16-04
APPLICATION FOR
APPROVAL OF FIRM ENERGY
SALES AGREEMENT
AMENDMENT
ldaho Power Company ("ldaho Power" or "Company"), in accordance with RP 52
and the applicable provisions of the Public Utility Regulatory Policies Act of 1978
('PURPA"), hereby respectfully applies to the ldaho Public Utilities Commission
("Commission") for an order approving the Second Amendment ('Amendment") to the
Firm Energy Sales Agreement ('FESA") between Idaho Power Company and New
Energy One, LLC, a PURPA Qualifying Facility ("QF"). The Amendment is submitted
herewith as Attachment 1. This Amendment changes the Net Energy Amount
notification process in the FESA similar to the process that has been approved by the
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 1
Commission in 22 other Energy Sales Agreements since August 21,2014, and three
other FESAs with PURPA QFs.
ln support of this Application, ldaho Power represents as follows:
I. INTRODUCTION AND BACKGROUND
1. ldaho Power and New Energy One, LLC ("Seller") entered into an FESA
on May 24,2010, for the purchase and sale of energy produced by the Rock Creek
Dairy project ("Facility") located near Filer, ldaho. This FESA was approved by the
Commission in Order No. 32025 on July 1,2010.
2. On August 13, 2014, the parties entered into a First Amendment to the
FESA in order to change the definition of Mid-Columbia Market Energy Cost to be
consistent with the stipulation approved by the Commission in Order No. 33053 on June
10,2014. The First Amendment was approved by the Commission in Order No. 33184
on November21,2014.
3. Paragraph 6.2 of the FESA allows the Seller to adjust the "lnitial Year
Monthly Net Energy Amounts" on a quarterly basis consistent with a Commission
directive that Seller revisions are to be submitted no sooner than "the end of month
three and every three months thereafter." Order No. 29632 , p.23.
4. On February 19, 2016, the parties agreed to amend the FESA to allow the
Seller to adjust the Net Energy Amounts on a monthly basis rather than a quarterly
basis. This change to the FESA allows the Seller to update its monthly Net Energy
Estimates on a monthly basis and is a reasonable change that maintains the existing
requirements of the 90 percenUl 10 percent provisions of the FESA, while providing a
more accurate estimate of monthly generation to the Company.
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 2
II. THE AMENDMENT
5. Since August 21,2014, the Commission has approved approximalely 22
Energy Sales Agreements between Idaho Power and QFs that have allowed QFs to
change the "lnitial Year Monthly Net Energy Amounts" on a monthly basis. ln addition,
the Commission has approved FESA amendments similar to this Amendment as
recently as August 19,2015. See Order Nos. 33358 and 33359. In Order No. 33102,
issued on August21,2014, the Commission states:
[W]e find that monthly, as opposed to quarterly, reporting of
energy generation estimates is a reasonably negotiated term
between the parties and not inconsistent with the
Commission's guidance and findings in Order No. 29632.As we stated in that Order, 'it is reasonable and
operationally expedient to require QFs to provide ldaho
Power with monthly kWh production estimates The
Commission finds it reasonable to provide more frequent
opportunities to revise generation estimates than [the two
yearsl proposed by the Company. We find that the interest
of the Company in planning for QF resources is better
served if the generation forecast is a reliable estimate."
Order No. 29632 at23.
Order No. 33102, p. 6. The Commission also states, "We find that a provision allowing
for monthly generation estimate updates is consistent with that purpose." /d.
6. The Amendment changes paragraph 6.2 to allow the Seller to adjust the
"lnitial Year Monthly Net Energy Amounts" on a monthly, rather than quarterly, basis.
The Facility has been delivering energy since its initial Operation Date of August 13,
2012. The FESA provides that the "lnitial Year Monthly Net Energy Amounts" may only
be adjusted for future months by the Seller on a quarterly basis. Under this
Amendment, the Seller can submit future revisions of its Monthly Net Energy Amounts
on a monthly basis, with a minimum of 30 days' notice prior to the beginning of the next
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 3
month, rather than once every three months. A table was added to the Amendment
indicating both "Notification Month" and "Future Monthly Net Energy Amounts eligible to
be revised," primarily to provide clarity to the confusing nature of the process required in
the FESA to adjust the Estimated Net Energy Amounts and the Seller's desire to update
the same.
7. The revised provisions still maintain the required one year of monthly
generation estimates that can be used for long-term planning, but what is more critical is
the short-term, operational planning needs. Moreover, a more accurate monthly
estimate is more beneficial for integrating QF generation than locking in a three-month
estimate. The parties agree that allowing the Seller to update its Estimated Net Energy
Amounts on a monthly basis will result in a more accurate monthly forecast than what
the Company receives currently with the quarterly revisions. Both ldaho Power and the
Seller propose Commission adoption of this change. The Seller gains more clarity and
flexibility in adjusting its estimated energy deliveries and ldaho Power maintains stability
with the required year of monthly estimates as well a more accurate monthly forecasts,
which are useful in the operational integration of QF generation.
III. PROCEDURE
8. Given the limited scope of the Amendment, and consistent with the
Commission's prior orders as described above, ldaho Power requests that the
Amendment be approved without further process.
9. Alternatively, should the Commission determine that further process is
required, ldaho Power believes that a hearing is not necessary to consider the issues
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 4
presented herein and respectfully requests that this Application be processed under
Modified Procedure; i.e., by written submissions rather than by hearing. RP 201, ef seg.
IV. COMMUNICATIONS AND SERVICE OF PLEADINGS
10. Communications and service of pleadings, exhibits, orders, and other
documents relating to this proceeding should be sent to the following:
Donovan E. Walker
Lead Counsel
Regulatory Dockets
ldaho Power Company
Randy C. Allphin
Energy Contracts Goordinator Leader
ldaho Power Company
1221West ldaho Street (83702)
Boise, ldaho 83707
rallph in@idahopower. com
1221West ldaho Street (83702) P.O. Box 70
P.O. Box 70
Boise, ldaho 83707
dwalker@idahopower. com
dockets@ idahopower. com
V. REQUEST FOR RELIEF
11. ldaho Power respectfully requests that the Commission issue an order
approving the Second Amendment to the Firm Energy Sales Agreement submitted
herewith without change or condition
Respectfully submitted this 17th day of
Attorney for ldaho Power Company
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 17th day of March 2016 I served a true and
correct copy of the within and foregoing APPLICATION FOR APPROVAL OF FIRM
ENERGY SALES AGREEMENT AMENDMENT upon the following named parties by
the method indicated below, and addressed to the following:
New Energy One, LLC
Kenny Tolman
New Energy One, LLC
P.O. Box AJ
Filer, ldaho 83328
Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 6
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-16-04
IDAHO POWER COMPANY
ATTACHMENT 1
SECOND AMENDMENT
TO THE
FIRM ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
NEW ENERGY ONE, LLC
This Second Amendment of the Firm Energy Sales Agreement ("Second Amendment") is
entered into on this //day of Fe/ruery,2016 by and between Idaho Power Company, an tdaho
corporation ("Idaho Power"), and Ne# Energy One, LLC, an Idaho limited liability company
("'New Energy''or "Seller") (individually a "oParty" and collectively the'oParties").
WITNESSETH:
WHEREAS, ldaho Power and Seller entered into a Firm Energy Sales Agreernent on May
24, 2010, ("Agreanent") for the purchase and sale of energy produced by the Seller's facility
("Project") that was approved by the Idaho Public Utilities Commission ("Idaho PUC") in Order
No. 32025 on July 1,2010;
WHEREAS, on August 13,2014, the Parties entered into a First Amendment to change the
definition of Mid-Columbia Market Energy Cost in the Agreernent consistent with the Stipulation
approved by the Idaho PUC in Order No. 33053 on June 10,2014. The First Amendment was
approved by the ldaho PUC in Order No. 33184 on November 21,20141'
WHEREAS, the Parties agree to amend the Agreement to replace Article 6, sections 6.2.2
and 6.2.3 relating to monthly Net Energy Amounts consistent with other recently approved Energy
Sales Agreements and Amendments and to abide by the terms of this Second Amendment;
NOW THEREFORE, in consideration of the mutual promises and covenants and other
consideration set forth herein, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree to the following amendments to the Agreanent:
l. Incorporation of Recitals. The above-stated recitals are incorporated in this Second
Amendment and made a part of this Second Amendment by this reference to the same
extent as if these recitals were set forth in full at this point.
2. Article VI: Purchase and Sale of Net Energy. Article 6, sections 6.2.2 ard 6.2.3 shall be
deleted in their entirety and the following sections shall be substituted in their stead:
6.2.2 Seller's Adjustment of Initial Year Monthly Net Energy Amounts - Prior to the
Operation Date, the Seller may revise all of the previous initial year monthly Net
Energy Amounts by providing written notice to Idaho Power in accordance with
paragraph25.l.
6.2.3 Seller's Adjustment of Monthly Net Energy Amounts After the Operation Date -
After the Operation Date, the Seller may revise any future monthly Net Energy
Firm Energy Sales Agreement
Project: 3l6l6l l0 Rock Creek Dairy
Second Amendment - Page I of 3
Amounts by providing written notice no later than 5 PM Mountain Standard Time
on the last business day of the Notification Month speciflred in the following
schedule:
Notification
Month
Future monthly Net Energy
Amounts eligible to be revised
November
December
January
February
March
April
May
June
July
August
September
October
Firm Energy Sales Agreement
Project: 3 l6l6l l0 Rock Creek Dairy
Second Amendment -Page 2 of 3
January and any future months
February and any future months
March and any future months
April and any future months
May and any future months
June and any future months
July and any future months
August and any future months
September and any future months
October and any future months
November and any future months
December and any future months
J.
4.
a.) This written notice must be provided to Idaho Power in accordance with
paragraph 25.1 or by electronic notice provided and verified via return
electronic verification of receipt to the electronic notices address specified
in paragraph 25.1.
b.) Failure to provide timely written notice of changed Net Energy Amounts
will be deemed to be an election of no change from the most recently
provided Net Energy Amounts.
Commission Approval. The obligations of the Parties under this Second Amendment are
subject to the Idaho PUC's approval of this Second Amendment and such approval being
upheld on appeal, if any, by a court of competent jurisdiction. The Parties will submit this
Second Amendment to the ldaho PUC and recommend approval in its entirety pursuant to
RP 274.
Effect of Amendment. Except as expressly amended by this Second Amendment, the
Agreement as previously amended by the First Amendment shall remain in full force and
effect.
Capitalized Terms. All capitalized terms used in this Second Amendment and not defined
herein shall have the same meaning as used in the Agreement.
Scope of Amendment. This Second Amendment shall be binding upon and inure to the
benefit of the Parties hereto, and their respective heirs, executors, administrators,
successors, and assigns, who are obligated to take any action which may be necessary or
proper to carry out the purpose and intent thereof.
5.
6.
7.Authority. Each Party represents and warrants that (i) it validly exists and in good standing
in the state in which it is organized, (ii) it is the proper party to amend the Agreement, and
(iii) it has the requisite authority to execute this Second Amendment.
Counterparts. This Second Amendment may be executed in any number of counterparts,
each of which shall be deemed an original and all of which taken together shall constitute
a single instrument.
IN WTTNESS WHEREOF, the Panies hereto have caused this Second Amendment to be
executed in their respective ruImes on the dates set forth below:
8.
Name: Tor^ l4on, .'>
IDAHO POWER COMPANY
,r,{p)axt,, ?NW
Name: rUtu lDark_
Title: A )n > a* o'.- Title:
Date: L^16-(EA Date:
Firm Energy Sales Agreement
Project: 316161 l0 Rock Creek Dairy
Second Amendment - Page 3 of 3
NEW ENERGY ONE, LLC