20170208Comments.pdf

DAPHNE HUANG
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 8370
Street Address for Express Mail
472W, WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY TO APPROVE THE)CASE NO. IPC-E.16-34
FIRST AMENDMENT TO ITS ENERGY SALES
AGREEMENT FOR THE AMERICAN FALLS
SOLAR, LLC PROJECT.
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COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attorney of record, Daphne Huang, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure issued in Order No. 33687, submits the following
comments.
BACKGROUND
On December 22,20l6,Idaho Power Company filed an Application asking the
Commission to approve the First Amendment to its Energy Sales Agreement (ESA) with
American Falls Solar, LLC (American Falls). The ESA is a contract under the Public Utility
Regulatory Policies Act (PURPA). The Amendment deletes an inapplicable provision, corrects a
typographical error, updates and corrects information in the ESA's Appendix B, and adds an
Appendix I regarding net energy allocation.
1STAFF COMMENTS FEBRUARY 8,2017
Under PURPA, electric utilities must purchase electric energy from "qualiffing facilities"
(QF$ at purchase or "avoided cost" rates approved by this Commission. l6 U.S.C. $ 824a-3;
Idaho Power Co. v. Idaho PUC,155 Idaho 780,789,316 P.3d 1278,1287 (2013). The
Commission has established two methods for calculating avoided costs, depending on the size of
the QF project: (1) the surrogate avoided resource (SAR) methodology, used to establish
"published" avoided cost rates; and(2) the integrated resource plan (IRP) methodology, to
calculate avoided cost rates for projects exceeding published rate limits. See Order No. 32697 at
7-8. Published rates are available for wind and solar QFs with a design capacity of up to 100
kilowatts (kW), and for QFs of all other resource types with a design capacity of up to l0
average megawatts (aMW). Id.; see also 18 C.F.R. $ 29230a@).
The Commission approved Idaho Power's ESA with American Falls in 2014. Order No.
33200. Under the ESA, Idaho Power purchases and American Falls sells energy generated by
American Falls' solar facility (Facility) - a PURPA QF - near American Falls, Idaho.
Application at2. The ESA contains prices based on the IRP avoided cost methodology. Id. at2-
3.
On December l, 2016,Idaho Power and American Falls entered into an agreed
Amendment to their ESA, subject to this Commission's approval. Application at 1. In the
Amendment, Idaho Power and American Falls agree to delete Article 3.3 of the ESA, which
provides that American Falls will "take such steps as may be required to maintain the [QF's]
status" as a solar published rate facility . Id. at2; see Attachment I to Application in Case No.
IPC-E-14-3 4 at I0 (ESA Art. 3.3). Idaho Power states that the Facility "exceeds the eligibility
threshold for published avoided cost rates," thus the language of Article 3.3 does not apply.
Application at 2.
In the Amendment, Idaho Power and American Falls agree to correct Article 7.4 of the
ESA to include the word "Percentage," inadvertently omitted from the second sentence which
should read, 'oAll pricing contained within Appendix E for the current applicable month(s) will
be multiplied by the Pricing Adjustment Percentage . . . ." Id. at3 (emphasis added). In
addition, the Facility's physical characteristics have changed since the Commission approved the
ESA, which describes the Facility's configuration, design, and construction in its Appendix B-1.
Id. Accordingly, the Company and American Falls agree Appendix B will include "a more
generalized Facility description" that is consistent with the QF's Generator Interconnection
Agreement (GIA). Id. at2,4.
2STAFF COMMENTS FEBRUARY 8,2017
The Amendment adds Appendix I, Net Energy Allocation. Idaho Power states that the
Facility "utilizes an interconnection that is shared with another project, American Falls Solar II,
LLC." Id. at 4. Idaho Power has a single point of delivery GOD) and revenue meter for the two
facilities that measures the total net energy of both projects. Id. "Appendix I establishes the
method for determining each project's Net Energy deliveries," for administration of the ESA. 1d.
The Company states that the changes in the Amendment "have no material effect to the [ESA's]
terms and provisions . . . and [would] not alter the [ESA's] performance requirements or
pricing," but are proposed for the ESA's proper administration and enforcement. Id. at 5.
STAFF ANALYSIS
Since this project exceeds the eligibility threshold for published avoided cost rates, its
prices are based upon incremental cost integrated resource plan (IRP) avoided cost methodology
Therefore, Staff agrees with Idaho Power that Article 3.3 in the original agreement does not
apply to this project and should be removed.
The word "percentage" was omitted from the second sentence in Article 7.4, and Staff
agrees with the Company that it should be added back to avoid confusion.
Subsequent to the Commission's approval of the original agreement, the physical
characteristics of the project were changed in terms of configuration, design, and construction.
The parties updated the description of facility in the original Appendix B-1. Staff reviewed the
updates and agrees with the proposed changes.
This project shares interconnection with another project that is also seeking ESA
Amendment approval from the Commission (Case No. IPC-E-16-35). Idaho Power proposes an
allocation methodology to proportionately allocate total net energy according to each project's
contribution. Staff examined the method and believes it is a reasonable mathematical approach
to accomplish proper energy allocation.
RECOMMENDATIONS
The changes proposed in the Amendment have no material effect to the terms and
provisions of the original agreement, and do not alter the performance requirements or the
pricing. Staff recommends that Commission approve all the changes proposed in the
Amendment.
aJSTAFF COMMENTS FEBRUARY 8,2017
Technical Yao Yin
submitted this
commcnb
p day of Febnrary 2017.
Deputy Attomey General
4STAFF FEBRUARY 8,2017
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 8ft DAY OF FEBRUARY 2017,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC.E-16.34, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
DONOVAN WALKER
LEAD COUNSEL
IDAHO POWER COMPANY
PO BOX 70
BOISE rD 83707-0070
E-MAIL: dwalker@)idahonower.com
clockets@idahopower. com
AMERICAN FALLS SOLAR LLC
CAPITAL DYNAMICS INC
645 MADISON AVE 19TH FL
NEW YORK NY 10022
E-MAIL: [e-mail]
[e-mail]
steohanie.hoevermann@nordlb. com
MICHAEL T DARRINGTON
ENERGY CONTRACTS LEADER
IDAHO POWER COMPANY
PO BOX 70
BOrSE ID 83707-0070
E-MAIL: [e-mail]
Y
CERTIFICATE OF SERVICE