20161206Comments.pdf

CAMILLE CHRISTEN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BARNO. 10177
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
:, -CEIVED
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR APPROVAL )
OR REJECTION OF AN ENERGY SALES )
AGREEMENT WITH HK HYDRO LLC FOR )
THE SALE AND PURCHASE OF ELECTRIC )
ENERGY FROM THE MUD CREEK S&S )
HYDRO PROJECT. )
CASE NO. IPC-E-16-25
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
attorney of record, Camille Christen, Deputy Attorney General, and in response to the Notice of
Notice of Application and Modified Procedure issued in Order No. 33651 on November 15,
2016, in Case No. IPC-E-16-25, submits the following comments.
BACKGROUND
On November 1, 2016, Idaho Power Company filed an Application seeking a
Commission Order approving or rejecting its Energy Sales Agreement (ESA) with H K Hydro,
LLC, and if the ESA is accepted, declaring that all payments for purchases of energy under the
ESA be allowed as prudently incurred expenses for ratemaking purposes. Application at 1, 6.
The ESA would replace an existing agreement, first approved by the Commission in 1981. Id. at
2. Under the proposed ESA, Idaho Power would buy, and HK Hydro would sell, electric energy
generated by the Mud Creek S&S hydro project (Facility) located near Buhl, Idaho. Id. at 1.
STAFF COMMENTS 1 DECEMBER 6, 2016
On October 5, 2016, Idaho Power entered into its ESA with HK Hydro pursuant to the
terms and conditions of various Commission Orders and under the Public Utility Regulatory
Policies Act (PURP A). Id. at 2-3. Under PURP A, electric utilities must purchase electric energy
from "qualifying facilities" (QFs) at rates approved by the applicable state regulatory agency -in
Idaho, this Commission. 16 U.S.C. § 824a-3; Idaho Power v. Idaho PUC, 155 Idaho 780, 789,
316 P.3d 1278, 1287 (2013).
Idaho Power states that the Facility is a QF under PURP A and has a nameplate rating of
520 kilowatts (kW). Application at 2, 4. The Facility is currently selling energy to Idaho Power
under an agreement executed in 1981, which is to expire February 19, 2017. Id. at 2.
Under the terms of the replacement ESA, "H K Hydro elected to contract with Idaho
Power for a 20-year term using the non-levelized, non-seasonal hydro published avoided cost
rates as currently established by the Commission in Order No. 33538 for replacement contracts
and for energy deliveries ofless than 10 [average megawatts] aMW." Id. at 3-4.
Idaho Power states "H K Hydro will be required to provide data on the Facility that Idaho
Power will use to confirm that under normal and/or average conditions, the Facility will not
exceed 10 aMW on a monthly basis." Id. at 4.
The Facility's Scheduled First Energy Date and Scheduled Operation Date is February
20, 2017. Id. The ESA will become effective only upon the Commission's approval and finding
that all payments made by Idaho Power to H K Hydro for purchases of energy will be allowed as
prudently incurred expenses for ratemaking purposes. Id. at 5.
STAFF ANALYSIS
Staff has reviewed the proposed rates and confirms they are correct. All other terms and
conditions contained in the proposed Agreement are consistent with prior Commission orders.
STAFF RECOMMENDATION
Staff recommends that the Commission approve all of the Agreement's terms and
conditions and declare that all payments made by Idaho Power to H K Hydro for purchase of
energy and capacity from the Mud Creek S&S hydro project will be allowed as prudently
incurred expenses for ratemaking purposes.
STAFF COMMENTS 2 DECEMBER 6, 2016
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Respectfully submitted this 0 day of December 2016.
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Camille Christen
Deputy Attorney General
Technical Staff: Yao Yin
i:umisc/comments/ipce l 6.25ccyy comments
STAFF COMMENTS 3 DECEMBER 6, 2016
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 6TH DAY OF DECEMBER 2016,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF IN
CASE NO. IPC-E-16-25 , BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
DONOVAN E WALKER
LEAD COUNSEL
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-mail: [e-mail]
[e-mail]
OWEN H ORNDORFF
ORNDORFF LAW OFFICES
1087 W RIVER ST STE 230
BOISE ID 83702
E-mail: [e-mail]
RANDY C ALLPHIN
ENERGY CONTRACTS LEADER
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-mail: [e-mail]
STEPHEN HARMSEN
HKHYDROLLC
26 NORTH STATE STREET
SALT LAKE CITY UT 84111
E-mail: [e-mail]
CERTIFICATE OF SERVICE