20170209Comments.pdf

DAPHNE HUANG
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-007 4
[phone]
IDAHO BAR NO. 8370
Street Address for Express Mail
472 W , WASHINGTON
BOISE, IDAHO 83702-5918
Attomey 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-16.35
FIRST AMENDMENT TO ITS ENERGY SALES
AGREEMENT FOR THE AMERICAN FALLS
SOLAR II, LLC PROJECT
)
)
)
)
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attomey of record, Daphne Huang, Deputy Attomey General, and submits the following
comments.
BACKGROUND
On December 22,2016,Idaho Power Company filed an Application asking the
Commission to approve the First Amendment to its Energy Sales Agreement (ESA) with
American Falls Solar II, LLC (American Falls II). 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.
Under PURPA, electric utilities must purchase electric energy from "qualifring facilities"
(QFs) at purchase or "avoided cost" rates approved by this Commission. 16 U.S.C. $ 824a-3;
Idaho Power Co. v. Idaho PUC,l55 Idaho 780,789,316 P.3d 1278,1287 (2013). The
STAFF COMMENTS FEBRUARY 9,2017
Commission has established two methods for calculating avoided costs, depending on the size of
the QF project: (l) 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 10
average megawatts (aMW). Id.; see also 18 C.F.R. $ 29230a@).
The Commission approved Idaho Power's ESA with American Falls II in20l4. Order
No. 33201. Under the ESA, Idaho Power purchases and American Falls II sells energy generated
by American Falls II's solar facility (Facility) - a PURPA QF - near American Falls, Idaho.
Application at 2. The ESA contains prices based on the IRP avoided cost methodology.
Id. at2-3.
On December l, 20l6,Idaho Power and American Falls II entered into an agreed
Amendment to their ESA, subject to this Commission's approval. Application at l. In the
Amendment, Idaho Power and American Falls II agree to delete Article 3.3 of the ESA, which
provides that American Falls II 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 at 10 (ESA
Art. 3.3). As noted in the Application here, the Facility o'exceeds the eligibility threshold for
published avoided cost rates," thus the language of Article 3.3 does not apply. Application at 2.
Also in the Amendment, Idaho Power and American Falls II agree to correct Article 7 .4
of the ESA to include the word "Percentage," inadvertently omitted from the second sentence
which should read, "All pricing contained within Appendix E for the current applicable month(s)
will be multiplied by the Pricing Adjustment Percentage . . . ." Id. at 3 (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 II agree Appendix B will include "a more
generalized Facility description" that is consistent with the QF's Generator Interconnection
Agreement (GIA). Id. at2,4.
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,
LLC." Id. at 4. Idaho Power has a single point of delivery (POD) and revenue meter for the two
facilities that measures the total net energy of both projects. Id. "Appendix I establishes the
2STAFF COMMENTS FEBRUARY 9,2017
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 on the 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. Also, Staff agrees with the
Company that the word "percentage" was omitted from the second sentence in Article 7.4 and
should be added back to avoid confusion. Staff reviewed the updates to the facility's description
in Appendix B-1 and agrees with the proposed changes.
In addition, Staff examined Idaho Power's proposed methodology to proportionately
allocate total net energy according to the contributions of this project (American Falls Solar II),
and American Falls Solar, which share an interconnection. Staff believes Idaho Power's
methodology 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 the Commission approve all the changes proposed in the
Amendment.
,tL
Respectfully submitted this day of February 2017
uang
Deputy Attorney General
,l
Technical Staff: Yao Yin
i: umisc:comments/ipce I 6.35djhyy comments
3STAFF COMMENTS FEBRUARY 9,2017
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 9TH DAY OF FEBRUARY 2017,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-16-35, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
DONOVAN WALKER
LEAD COUNSEL
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: dwalker(Pidahopower.com
d o c kets Iil i dahopo wer. c, o rn
AMERICAN FALLS SOLAR LLC
CAPITAL DYNAMICS INC
645 MADISON AVE I9TH FL
NEW YORK NY 10022
E-MAIL : [e-mail]
[e-mail]
[e-mail]
MICHAEL T DARRINGTON
ENERGY CONTRACTS LEADER
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL : mdnrringtonfiP.idahopower:. com
t '^ 4Ar-,*-SEenEWv/
CERTIFICATE OF SERVICE