20161110final_order_no_33646.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S ANNUAL UPDATE TO LOAD
AND GAS FORECASTS AND LONG-TERM
CONTRACTS FOR ITS INCREMENTAL
COST INTEGRATED RESOURCE PLAN
A VOIDED COST METHODOLOGY
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) CASE NO. IPC-E-16-22
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)
) ORDER NO. 33646
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Office of the Secretary
Service Date
November 10, 2016
Pursuant to the Public Utility Regulatory Policies Act of 1978 (PURPA) and the
implementing regulations of the Federal Energy Regulatory Commission (FERC), the Idaho
Public Utilities Commission (Commission) has approved an incremental cost Integrated
Resource Plan (IRP) methodology to calculate avoided cost rates paid to certain PURP A
qualifying facilities (QFs). The avoided cost rate is the purchase price paid to QFs for purchases
of QF energy and capacity.
In Order Nos. 32697 and 32802, the Commission determined that the load forecast
and natural gas forecast inputs to the IRP avoided cost methodology should be updated annually
on October 15 of each year. The Commission stated
We find that, in order to maintain the most accurate and up-to-date reflection
of a utility's true avoided cost, utilities must update fuel price forecasts and
load forecasts annually -between IRP filings. . .. In addition, it is appropriate
to consider long-term contract commitments because of the potential effect
that such commitments have on a utility's load and resource balance. . .. We
further find it appropriate to consider PURP A contracts that have terminated
or expired in each utility's load and resource balance.
Order No. 32697 at 22.
On October 14, 2016, per the Commission's directive, Idaho Power Company
submitted its annual updates for fuel prices and load forecasts. The Company also submitted
information regarding new and expiring contracts.
COMPLIANCE FILING
Idaho Power's most recent load forecast from October 2016 shows, on average, a
slight decrease in Idaho Power customer loads when compared to the October 2015 load forecast
provided for the 2015 update, and approved by the Commission in Order No. 33417 (Case No.
IPC-E-15-25).
ORDER NO. 33646
As of October 15, 2016, Idaho Power will update the natural gas price forecast within
the Incremental Cost IRP (ICIRP) avoided cost model to reflect the most recent U.S. Energy
Information Administration (EIA) natural gas price forecast, published in 2016. The October
2016 gas forecast is the nominal EIA forecast for Henry Hub1• It indicates decrease in the
average annual natural gas forecast prices over the next 20 years, compared to the EIA 2015
natural gas price forecast used in the ICIRP avoided cost model from the previous update.
Idaho Power currently has three non-PURP A, long-term power purchase agreements:
Elkhorn Valley Wind (101 megawatts (MW)), Raft River Geothermal (13 MW), and Neal Hot
Springs Geothermal (22 MW). Idaho Power currently has 130 contracts with PURP A QF
projects with a total nameplate capacity of 1,132 MW. New contracts, terminated or expired
contracts, and new contract pricing, are included in the ICIRP model on a continuous basis.
STAFF REVIEW
Staff reviewed the Company's forecast and contract updates. Staff reported that the
load and gas price forecasts submitted by Idaho Power reflect the Company's most current
estimates, and were prepared consistent with the methods used in the Company's IRP. Staff
maintained that the load and gas price forecasts and the long-term contract changes submitted by
the Company comply with the requirements of Order Nos. 32697 and 32802. Staff
recommended that the Commission accept the forecasts and contract changes without further
process.
DISCUSSION AND FINDINGS
The Commission has jurisdiction over Idaho Power and the issues raised in this
matter under Title 61 of the Idaho Code and PURP A. The Commission has authority under
PURP A and FERC regulations to set avoided costs, to order electric utilities to enter into fixed­
term obligations for the purchase of energy from QFs, and to implement FERC rules. Also, the
Commission is empowered to resolve complaints between QFs and utilities and to approve QF
contracts.
Pursuant to this authority, we have reviewed and considered the record in this case,
including Idaho Power's filing and Staffs recommendation. We find that Idaho Power's filing
complies with the directives issued by this Commission in Order Nos. 32697 and 32802. Based
1 The Henry Hub is a natural gas delivery point near Erath, Louisiana, and the confluence of many interstate and
intrastate natural gas pipelines. See Hershey v. Energy Transfer Partners, L.P., 610 F.3d 239,242 (5th Cir. 2010).
The price of natural gas at the Henry Hub is a commonly-used gas price index.
ORDER NO. 33646 2
on our review of the totality of the updates, we accept the updated inputs to Idaho Power's IRP
avoided cost calculation for filing.
ORDER
IT IS HEREBY ORDERED that Idaho Power's annual update to its load and gas
price forecast and long-term contract status for purposes of its incremental cost IRP methodology
are accepted, effective October 15, 2016.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this / a-f'A
day of November 2016.
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ATTEST:
J D. Jewell
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ORDER NO. 33646 3