20170106Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
FROM: CAMILLE CHRISTEN
DEPUTY ATTORNEY GENERAL
DATE: JANUARY 6, 2017
SUBJECT: IDAHO POWER'S APPLICATION TO APPROVE FIRST AMENDMENT
TO ITS ENERGY SALES AGREEMENT WITH SIMCO SOLAR, LLC,
CASE NO. IPC-E-16-38
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 Simco
Solar, LLC. The ESA is a contract under the Public Utility Regulatory Policies Act (PURPA).
The Amendment corrects the project's name in the ESA, deletes an inapplicable provision,
corrects a typographical error, and updates and corrects information in the ESA's Appendix B.
Idaho Power asks that the Commission approve its Application upon Staffs review and without
further process. Application at 4.
BACKGROUND
Under PURPA, electric utilities must purchase electric energy from "qualifying
facilities" (QFs) at purchase or "avoided cost" rates approved by this Commission. 16 U.S.C. §
824a-3; Idaho Power Co. v. Idaho PUC, 155 Idaho 780,789,3 16 P.3d 1278, 1287 (2013). The
Commission has established two methods for calculating avoided cost, 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 10
average megawatts (aMW). Id.; see also 18 C.F.R. § 292.304(c).
The Commission approved Idaho Power's ESA with Simco Solar in 2014. Order No.
33199. Under the ESA, Idaho Power purchases and Simco Solar sells energy generated by
DECISION MEMORANDUM
Simco Solar' s facility (Facility) - a PURP A QF -near Mountain Home, Idaho. Application at 2.
The ESA contains prices based on the IRP avoided cost methodology. Application at 2-3.
PROPOSED AMENDMENT
The Company explains that subsequent to full execution and Commission approval of
the ESA, it discovered that the contracting entity and project name referenced in the ESA, Simco
Solar, was not the correct name of the limited liability company on file with the state of
Delaware. Id. at 2. The cotTect name is Simcoe Solar, LLC, and the parties have agreed to
amend the ESA to identify the correct company and project name. Id. at 3.
The Company and Simcoe also agree to delete Article 3.3 of the ESA, which provides
that Simcoe will "take such steps as may be required to maintain the [QF's] status" as a solar
published rate facility. Id. at 3; see Attachment 1 to Application in Case No. IPC-E-14-33 at 10
(ESA Art. 3.3). As noted in the Application here, the Facility "exceeds the eligibility threshold
for published avoided cost rates," thus the language of Article 3 .3 does not apply. Application at
3.
The Company and Simcoe Solar also 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 4 ( emphasis added). Finally, 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. Id.
Accordingly, the Company and Simcoe Solar agree to amendments to Appendix B to include "a
more generalized Facility description." Id. at 4. According to the Application, the changes
included in the Amendment "have no material effect to the terms and provisions of the ESA and
[ would] not alter the performance requirements or pricing" in the ESA. Id. at 4.
STAFF RECOMMENDATION
Staff believes the proposed changes are limited in scope and have no substantive
impact on the ESA. Accordingly, Staff recommends that the Company's request be approved
without further process.
DECISION MEMORANDUM 2
COMMISSION DECISION
Does the Commission wish to approve the Application without further process?
~tffevct=~
Camille Christen
Deputy Attorney General
M:IPC-E-16-38 cc
DECISION MEMORANDUM 3