20161004notice_of_petition_order_no_33619.pdf

Office of the Secretary
Service Date
October 4, 2016
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF
IDAHO POWER COMPANY FOR A
DECLARATORY ORDER REGARDING
PROPER A VOIDED COST PRICING FOR
JACKPOT SOLAR
-------------------
) CASE NO. IPC-E-16-21
)
) NOTICE OF PETITION FOR
) DECLARATORY ORDER
)
) NOTICE OF
) MODIFIED PROCEDURE
)
) ORDER NO. 33619
On September 26, 2016, Idaho Power Company petitioned the Commission for a
Declaratory Order regarding proper avoided cost pricing for Jackpot Solar under the Public
Utility Regulatory Policies Act of 1978 (PURP A). The Company states that Jackpot Solar is
requesting avoided cost pricing and PURPA contracts for four qualifying facilities (QF), each
planned to have a nameplate capacity of 20 MW. The Company states that Jackpot Solar is
requesting avoided cost pricing under the Company's incremental cost Integrated Resource
Planning (IRP) method, calculated at the time of contracting. The Company asks for a
declaratory ruling that, under the circumstances described in its Petition, the proper avoided cost
is determined at the beginning of each two-year contract term, not upon the initial contract; and
that a QF is not entitled to lock-in an avoided cost rate beyond the two-year maximum contract
term.
BACKGROUND
PURPA was passed as part of the National Energy Act of 1978. The Act's goals
include the encouragement of electric energy conservation, efficient use of resources by electric
utilities, and equitable retail rates for electric consumers, as well as the improvement of electric
service reliability. 16 U.S.C. § 2601 (Findings). Under the Act, the Federal Energy Regulatory
Commission (FERC) prescribes rules for PURPA's implementation. 16 U.S.C. § 824a-3(a), (b).
State regulatory authorities such as the Idaho Public Utilities Commission implement FERC
rules, but have "discretion in determining the manner in which the rules will be implemented."
Idaho Power Company v. Idaho Pub. Util. Comm., 155 Idaho 780, 782, 316 P.3d 1278, 1280
(2013) (citing FE.R.C. v. Mississippi, 456 U.S. 742, 751 (1982)).
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 33619 l
PURP A requires electric utilities, unless otherwise exempted, to purchase electric
energy from QFs. 16 U.S.C. § 824a-3; see also 18 C.F.R. § 292.101, 292.303(a). In Idaho, the
Commission must approve the purchase rate in a utility's contract to buy QF energy under
PURPA. Idaho Power, 155 Idaho at 789, 316 P.3d at 1287. The purchase rate for PURPA
contracts must be "just and reasonable to the electric consumers ... and in the public interest"
and "shall not discriminate against [QFs]." 16 U.S.C. § 824a-3(b); 18 C.F.R. § 292.304. Also,
the purchase rate shall not exceed the "incremental cost" to the utility, defined as the cost of the
electric energy which, "but for the purchase from [the QF], such utility would generate or
purchase from another source." 16 U.S.C. § 824a-3(d); 18 C.F.R. § 292.101(6) (defining
avoided costs).
PURPA and FERC's implementing regulations are silent as to contract length;
consequently, the contract length is left to the Commission's discretion. See Afton Energy, Inc.
v. Idaho Power, 107 Idaho 781, 785-86, 693 P.2d 427, 431-32 (1984); Idaho Power, 155 Idaho
at 782, 316 P.3d at 1280. Ever since PURPA was implemented in Idaho, this Commission has
periodically modified the length for PURP A contracts. See Order No. 29029. Initially, the
Commission established a maximum contract term of 35 years, which it shortened to 20 years in
1987. Order Nos. 21018, 21630. The term was reduced to five years in 1996, and raised back to
20 years in 2002. Order Nos. 26576, 29029. In 2015, the term was reduced to two years for
individually-negotiated contracts (those not subject to standard "published" rates). Order Nos.
33357, 33419. When it shortened the term, the Commission also determined that utilities should
establish a capacity deficiency date at the time the initial contract is signed. Order No. 33357 at
25-26; Order No. 33419 at 9, 21-23. The Commission decided that, as long as the QF
continuously sells power to the utility, the QF would be entitled to payments for capacity based
on the capacity deficiency date established at the time of the initial contract. Order No. 33357 at
25-26; Order No. 33419 at 9, 21-23.
NOTICE OF PETITION
YOU ARE HEREBY NOTIFIED that the Company states that it has been in
discussions with four QFs, Jackpot Solar North, Jackpot Solar South, Jackpot Solar West, and
Jackpot Solar East, each of which is seeking to develop a 20 MW project. The Company
collectively refers to the QFs as Jackpot Solar. The Company states that Jackpot Solar is seeking
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 33619 2
negotiated PURPA contracts with !RP-based incremental rates (as opposed to published or
standard rates available to smaller QFs). The Company states that Jackpot Solar has said that it
intends to continuously sell its power to the Company under PURP A for a period of 20 years.
YOU ARE FURTHER NOTIFIED that the Company states that it is capacity
sufficient, for purposes of PURP A contracts, until July 2024.
YOU ARE FURTHER NOTIFIED that the Company states Jackpot Solar has
requested and argued that it is entitled to avoided cost capacity rates, calculated at the time of the
initial two-year contract, that are then locked-in for the duration of subsequent contract terms.
The Company states that Jackpot Solar has referred to Commission Order Nos. 33357 and 33419
as supporting its interpretation.
YOU ARE FURTHER NOTIFIED that the Company states that it has refused
Jackpot Solar's request to lock-in avoided cost capacity rates at the time of the initial two-year
contract. The Company argues that Jackpot Solar's interpretation contradicts the Commission's
decisions in Orders No. 33357 and 33419. The Company argues that the Commission clarified
in those Orders that the proper avoided cost capacity rate is established at the start of each two­
year contract term.
YOU ARE FURTHER NOTIFIED that the Company seeks a declaratory ruling that
the !RP-based avoided cost prices for negotiated (non-standard) PURP A contracts, including the
capacity component, are to be calculated and reset prior to each successive two-year contract
term; and that a QF is not entitled to lock-in an avoided cost rate beyond the two-year maximum
contract term.
YOU ARE FURTHER NOTIFIED that Procedural Rules 101 and 102 provide for the
issuance of declaratory rulings by the Commission. ID APA 31.01.01.101 and .102. Pursuant to
Rule 101, persons seeking such a declaratory ruling must state the ruling that the petitioner
seeks, set out the factual allegations, and indicate the statute or other controlling law pertaining
to the petition. IDAPA 31.01.01.101.02. Rule 102 provides that the notice of petition for a
declaratory ruling will be issued to all affected utilities. ID APA 31.01.01.102.
YOU ARE FURTHER NOTIFIED that the Petition and its attachments have been
filed with the Commission and are available for public inspection during regular business hours
at the Commission offices. These documents are also available on the Commission's web site at
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 33619 3
Click on the "File Room" tab at the top of the page, then select "Electric
Cases" and click on the case numbers as 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 PURPA. The
Commission has authority under PURP A 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 31.01.01.000 et seq.
YOU ARE FURTHER NOTIFIED that because the subject matter of the Petition for
Declaratory Ruling may have generic ramifications, the Commission finds it appropriate to serve
copies of this Notice on Avista Corporation dba Avista Utilities and PacifiCorp dba Rocky
Mountain Power as potentially affected utilities. See IDAPA 31.01.01.102.
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 that it will proceed under
Modified Procedure pursuant to Rules 201 through 204 of the 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 the affected utilities shall have until
Tuesday, October 18, 2016, to file written comments in support or opposition of the Petition.
Any other person desiring to state a position on the Petition may file a written comment in
support or opposition with the Commission no later than Tuesday, November 8, 2016.
YOU ARE FURTHER NOTIFIED that written comments 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 Petition shall be mailed to
the Commission, the Company, and Jackpot Solar at the addresses reflected below:
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 33619 4
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Street Address for Express Mail:
472 W. Washington Street
Boise, ID 83 702-5918
Donovan Walker
Lead Counsel
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, ID 83707-0070
E-Mail:
Jackpot Solar:
Peter Richardson
Richardson Adams, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ID 83 707
Email: ~~~~=~====!2.
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 wvvw.puc.idaho.gov. 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 Idaho Power and
Jackpot Solar at the e-mail addresses listed above.
YOU ARE FURTHER NOTIFIED that Idaho Power shall have until November 22,
2016, to file reply comments, if necessary.
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.
ORDER
IT IS HEREBY ORDERED that copies of the Petition and Notice shall be served on
the affected utilities - A vista Corporation dba A vista Utilities and PacifiCorp dba Rocky
Mountain Power.
IT IS FURTHER ORDERED that the Petition of Idaho Power Company for
Declaratory Ruling be processed by Modified Procedure, Rule 201-204 (IDAPA 31.01.01.201-
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 33619 5
.204). The affected utilities may submit comments in this matter by no later than October 18,
2016. Persons interested in submitting written comments must do so no later than November 8,
2016. The Company may file a reply no later than November 22, 2016.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of October 2016.
ATTEST:
Commission Secretary
O:IPC-E-16-21 cc
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ERIC ANDERSON, COMMISSIONER
ORDER NO. 33619 6