20160812Application.pdf

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2016 1 1G 12 PM 2= 57
DONOVAN E. WALKER
Lead Counsel
[e-mail]
August12,2016
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
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Re: Case No. IPC-E-16-16
An IDACORP Company
Riverside Investments I, LLC (Fargo Drop Hydro) -Application for
Approval of Firm Energy Sales Agreement Amendment
Dear Ms. Jewell:
Enclosed for filing in the above matter please find an original and seven (7)
copies of Idaho Power Company's Application for Approval of Firm Energy Sales
Agreement Amendment.
DEW:csb
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise. ID 83707
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorney for Idaho Power Company
RECEI VED
2016 !-JIG l 2 PM 2: 57
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MA TIER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR APPROVAL )
OF THE THIRD AMENDMENT TO THE FIRM )
ENERGY SALES AGREEMENT BETWEEN )
IDAHO POWER COMPANY AND RIVERSIDE )
INVESTMENTS I, LLC, FOR FARGO DROP )
HYDRO. )
-----------------)
CASE NO. IPC-E-16-16
APPLICATION FOR APPROVAL
OF FIRM ENERGY SALES
AGREEMENT AMENDMENT
Idaho Power Company ("Idaho 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 Idaho Public Utilities Commission
("Commission") for an order approving the Third Amendment ("Amendment") to the Firm
Energy Sales Agreement ("FESA") between Idaho Power and Riverside Investments I,
LLC, for generation from the Fargo Drop hydro facility, a PURPA qualifying facility
("QF"), provided herein as Attachment 1. This Amendment was executed in order to
make a change to the Net Energy Amount notification process similar to the process
that has been approved by the Commission in more than 20 other Energy Sales
Agreements ("ESA") since August 21 , 2014.
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 1
In support of this Application, Idaho Power represents as follows:
I. INTRODUCTION AND BACKGROUND
1. Idaho Power and Riverside Investments I, LLC ("Seller") entered into an
FESA on December 1, 2011, for the purchase and sale of energy produced by the
Fargo Drop hydro project located near Homedale, Idaho. This FESA was approved by
the Commission in Order No. 32451 on February 1, 2012.
2. On October 2, 2014, the parties entered into a First Amendment to change
the definition of the Mid-Columbia Market Energy Cost in the FESA consistent with the
stipulation approved by the Commission in Order No. 33053 on June 10, 2014.
3. On March 17, 2016, the parties entered into a Second Amendment to
change any references in the FESA from "Riverside Investments, LLC" to "Riverside
Investments I, LLC."
4. Paragraph 6.2 of the FESA allows the Seller to adjust the "Initial Year
Monthly Net Energy Amounts" on a quarterly basis consistent with a Commission
directive that the Seller's revisions are to be submitted no sooner than "the end of
month three and every three months thereafter." Order No. 29632, p. 23.
5. On June 22, 2016, the parties agreed to amend the FESA to allow the
Seller to adjust the Net Energy Estimates on a monthly basis rather than a quarterly
basis. This is a reasonable change that maintains the existing requirements of the
90%/110% provisions of the FESA, while providing a more accurate estimate of monthly
generation to the Company.
II. THE AMENDMENT
6. Since August 21, 2014, the Commission has approved approximately 22
FESAs/ESAs between Idaho Power and QFs that have allowed QFs to change the
Initial Year Monthly Net Energy Amounts on a monthly basis. In addition, the
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT-2
Commission has approved FESA/ESA amendments similar to this Amendment as
recently as August 19, 2015. See Order Nos. 33358 and 33359. In Order No. 33102,
issued August 21, 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 Idaho
Power with monthly kWh production estimates. . . . The
Commission finds it reasonable to provide more frequent
opportunities to revise generation estimates than [the two
years] 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 at 23.
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 ." See Order
No. 33102, p. 6.
7. The Amendment changes paragraph 6.2 to allow the Seller to adjust the
"Initial Year Monthly Net Energy Amounts" on a monthly, rather than quarterly, basis.
As this is an existing project that has been operating and delivering energy with an
Operation Date of August 1, 2012, the Initial Monthly Net Energy Amounts have been
revised by the Seller in accordance with the FESA. However, under this Amendment,
the Seller can submit future revisions on a monthly basis, with a minimum of 30 days'
notice prior to the beginning of the next month, rather than once every three months. A
table was included in 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.
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT-3
8. The revised provisions still maintain the 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. In addition , 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 Idaho Power and the
Seller propose Commission adoption of this change. The Seller gains more clarity and
flexibility in adjusting its estimated energy deliveries and Idaho Power maintains the
stability in the estimates necessary for its planning and operation .
Ill. PROCEDURE
9. Given the limited scope of the Amendment, and consistent with the
Commission's prior orders as described above, Idaho Power requests that the
Amendment be approved without further process.
10. Alternatively, should the Commission determine that further process is
required , Idaho Power believes that a hearing is not necessary to consider the issues
presented herein and respectfully requests that this Application be processed under
Modified Procedure; i.e., by written submissions rather than by hearing. RP 201 , et seq.
IV. COMMUNICATIONS AND SERVICE OF PLEADINGS
11 . 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
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
[e-mail]
[e-mail]
Randy C. Allphin
Energy Contracts Leader
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
[e-mail]
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 4
V. REQUEST FOR RELIEF
12. Idaho Power respectfully requests that the Commission issue an order
approving the Third Amendment to the Firm Energy Sales Agreement between Idaho
Power Company and Riverside Investments I, LLC, submitted herewith without change
or condition.
Respectfully submitted this 1ih day of August 2016.
Attorney for Idaho Power Company
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT - 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on 1ih day of August 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:
Riverside Investments I, LLC
Dennis Daugherty
Riverside Investments I, LLC
P.O. Box 328
Adrian, Oregon 97901
Hand Delivered
_x__ U.S. Mail
__ Overnight Mail
FAX
_x__ Email [e-mail]
APPLICATION FOR APPROVAL OF FIRM ENERGY SALES AGREEMENT AMENDMENT-6
I
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-16-16
IDAHO POWER COMPANY
ATTACHMENT 1
THIRD AMENDMENT
TOTHE
FIRM ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
RIVERSIDE INVESTMENTS I, LLC
This Third Amendment of the Firm Energy Sales Agreement ("Third Amendment") is
entered into on this 2'2.. day of ~ , 2016 by and between Idaho Power Company, an Idaho
corporation ("Idaho Power"), and Riverside Investments I, LLC, an Idaho limited liability
company ("Riverside" or "Seller") (individually a "Party" and collectively the "Parties").
WITNESSETH:
WHEREAS, Idaho Power entered into the Energy Sales Agreement on December 1, 201 1,
(the "ESA") for the purchase and sale of energy from the Fargo Drop Hydro Project (the "Project")
with (Riverside Investments, LLC).
WHEREAS, Idaho Power entered into a First Amendment to the ESA on October 2, 2014
with (Riverside Investments, LLC) to amend the definition of Mid-Columbia Market Energy Cost.
WHEREAS, Idaho Power entered into a Second Amendment to the ESA on March 17,
2016 with (Riverside Investments I, LLC) to change any references in the ESA from "Riverside
Investments, LLC" to "Riverside Investments I, LLC".
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 Third 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 Agreement:
1. Incorporation of Recitals. The above-stated recitals are incorporated in this Third
Amendment and made a part of this Third 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 and 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
paragraph 25 .1.
Firm Energy Sales Agreement
Project: 21615215 Fargo Drop Hydro
Third Amendment -Page I of 3
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
Amounts by providing written notice no later than 5 PM Mountain Standard Time
on the last business day of the Notification Month specified in the following
schedule:
Notification
Month
November
December
January
February
March
April
May
June
July
August
September
October
Future monthly Net Energy
Amounts eligible to be revised
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
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.
3. Commission Approval. The obligations of the Parties under this Third Amendment are
subject to the Idaho PU C's approval of this Third Amendment and such approval being
upheld on appeal, if any, by a court of competent jurisdiction. The Parties will submit this
Third Amendment to the Idaho PUC and recommend approval in its entirety pursuant to
RP 274.
4. Effect of Amendment. Except as expressly amended by this Third Amendment, the
Agreement as previously amended by the First Amendment and Second Amendment shall
remain in full force and effect.
5. Capitalized Terms. All capitalized terms used in this Third Amendment and not defined
herein shall have the same meaning as used in the Agreement.
Firm Energy Sales Agreement
Project: 21615215 Fargo Drop Hydro
Third Amendment -Page 2 of 3
6. Scope of Amendment. This Third 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.
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 Third Amendment.
8. Counterparts. This Third 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 WITNESS WHEREOF, the Parties hereto have caused this Third Amendment to be
executed in their respective names on the dates set forth below:
RIVERSIDE INVESTMENTS I, LLC
B~
Name: D , /""
c PN NI f {), ./J /j Vk /fl't4.~
Title:
Date:
Firm Energy Sales Agreement
Project: 21615215 Fargo Drop Hydro
Third Amendment -Page 3 of 3
IDAHO POWER COMPANY
Name: Tess1'C\.., Pax-k
Title:
Date: