20170404notice_of_application_order_no_33738.pdf

Office of the Secretary
Service Date
April 4,2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )CASE NO.IPC-E-17-04
OF IDAHO POWER COMPANY TO )
APPROVE ITS ENERGY SALES )NOTICE OF APPLICATION
AGREEMENT WITH CAFCO IDAHO )
REFUSE MANAGEMENT LLC,IDAHO )NOTICE OF
FOR THE SALE AND PURCHASE OF )MODIFIED PROCEDURE
ELECTRIC ENERGY FROM THE SISW )
LFGE PROJECT )ORDER NO.33738
On March 22,2017,Idaho Power Company filed an Application asking the
Commission to approve its Energy Sales Agreement with CAFCO Idaho Refuse Management
LLC,Idaho (“CAFCO”).The Agreement falls under the Public Utility Regulatory Policies Act
of 1978 (PURPA),and is a contract for the sale of electric energy purchased by Idaho Power,
and generated by CAfCO’s Southern Idaho Regional Solid Waste District Landfill Gas to
Energy Project (“SI$W LFGE”or “Facility”)near Burley,Idaho.Idaho Power asked that its
Application be processed by Modified Procedure.
With this Order,the Commission provides notice of the Company’s Application,and
notice that the matter will be processed by Modified Procedure,with deadlines to submit
comments about the Application as set forth herein.
BACKGROUND
Under PURPA,electric utilities must purchase electric energy from “qualifying
facilities”(QFs)at rates approved by this Commission.16 U.S.C.§824a-3;Idaho Power Co.v.
Idaho PUC,155 Idaho 780,789,316 P.3d 1278,1287 (2013).The purchase or “avoided cost”
rate shall not exceed the “incremental cost’to the purchasing utility of power which,but for the
purchase of power from the QF,such utility would either generate itself or purchase from
another source.”Order No.32697 at 7,citing Rosebud Enterprises v.Idaho PUC,128 Idaho 624,
917 P.2d 781 (1996);1$C.F.R.§292.l01(b)(6)(defining “avoided cost”).
The Commission has established two methods of calculating avoided cost,depending
on the size of the QF project:(1)the surrogate avoided resource tSAR)methodology,and (2)
the integrated resource plan (IRP)methodology.See Order No.32697 at 7-8.The Commission
uses the SAR methodology —which applies to the Facility in this case —to establish “published”
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33738 1
avoided cost rates.Id.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.
In calculating avoided cost,the Commission has found it “reasonable,appropriate and
in the public interest to compensate QFs separately based on a calculation of not only the energy
they produce,but the capacity that they can provide to the purchasing utility.”Order No.32697
at 16.In calculating capacity,the Commission considers “each utility’s capacity deficiency
based on load and resource balances found in each utility’s [Integrated Resource Plan]IRP,”as
well as “a Qf’s ability to contribute to a utility’s need for capacity.”Id.at 16,21.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that Idaho Power entered into its Agreement with
CAFCO on March 13,2017,subject to this Commission’s approval,and pursuant to the terms
and conditions of various Commission Orders and PURPA.Application at 3.Under the
Agreement’s terms,CAFCO elected to contract with Idaho Power for a 20-year term using the
non-levelized “other”published avoided cost rates,as established by the Commission (Order No.
33538)for energy deliveries of less than 10 aMW.Id.
YOU ARE FURTHER NOTIFIED that,although the nameplate rating of the Facility
is 5 megawatts (MW),CAFCO agrees not to exceed 10 aMW on a monthly basis.Id.at 4.If the
Facility does exceed the monthly 10 aMW limit,CAFCO agrees that “Idaho Power will accept
the energy (Inadvertent Energy)that does not exceed the Maximum Capacity Amount,but will
not purchase or pay for this Inadvertent Energy.”Id.
YOU ARE FURTHER NOTIFIED that CAFCO has agreed to October 1,2018,as the
Scheduled Operation date.Id.The terms and provisions of the Agreement include that
“applicable interconnection charges and monthly operation and maintenance charges under
Schedule 72 will be assessed to [CAFCO].”Id.Also,PURPA QF generation “must be
designated as a network resource (“DNR”)to serve Idaho Power’s retail load on its system.”Id.
To maintain DNR status,“there must be a power purchase agreement associated with [the
project’s]transmission service request that maintains compliance with Idaho Power’s non
discriminatory administration of its Open Access Transmission Tariff (OATT)and maintains
compliance with [Federal Energy Regulatory Commission]FERC requirements.”Id.at 4-5.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33738 2
YOU ARE FURTHER NOTIFIED that,under its terms,the Agreement will not
become effective “until the Commission has approved all of [its]terms and conditions and
declared that all payments Idaho Power makes to CAFCO for purchases of energy will be
allowed as prudently incurred expenses for ratemaking purposes.”Id.at 5.
YOU ARE FURTHER NOTIFIED that the Application and a copy of the Agreement
have been filed with the Commission and are available for public inspection during regular
business hours at the Commission offices.The Application and attachments are also available
on the Commission’s web site at www.puc.idaho.gov.Click on the “File Room”tab at the top of
the page,then select “Electric Cases”and click on the case numbers as shown on the front of this
document.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission’s Rules
of Procedure,IDAPA 3 1.01.01.201-204.The Commission notes that Modified Procedure and
written comments have proven to be an effective means for obtaining public input and
participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or in opposition with the Commission within
21 days from the service date of this Order.The comment must contain a statement of reasons
supporting the comment.Persons desiring a hearing must specifically request a hearing in their
written comments.Written comments concerning this Application may be mailed to the
Commission and Idaho Power at the addresses reflected below:
Commission Secretary Donovan E.Walker,Lead Counsel
Idaho Public Utilities Commission Idaho Power Company
P0 Box 83720 P0 Box 70
Boise,ID 83720-0074 Boise,ID 83 707-0070
E-mail:[e-mail]
Street Address for Express Mail:[e-mail]
[e-mail]
472 W.Washington Street
Boise,ID 83702-5918
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33738 3
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission’s home page located at www.puc.idaho.gov.Click the “Case Comment or Question
Form”under the “Consumers”tab,and complete the form using the case number as it appears on
the front of this document.These comments must also be sent to the Company at the e-mail
addresses listed above.
YOU ARE FURTHER NOTIFIED that Idaho Power may file reply comments,if
necessary,no later than 28 days from the service date of this Order.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set,the Commission will consider this matter on its merits and
enter its Order without a formal hearing.If written comments are received within the time limit
set,the Commission will consider them and,in its discretion,may set the same for formal
hearing.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission’s jurisdiction under Title 61 of the Idaho Code,and specifically
Idaho Code §61-503.The Commission has authority under PURPA and the implementing
regulations of the Federal Energy Regulatory Commission (FERC)to set avoided costs,to order
electric utilities to enter into fixed-term obligations for the purchase of energy from qualified
facilities and to implement FERC rules.The Commission may enter any final Order consistent
with its authority under Title 61 and PURPA.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission’s Rules of Procedure,IDAPA 3 1.01.01.000,etseq.
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure.
Interested persons may file written comments no later than 21 days from the service date of this
Order.Idaho Power may file a reply,if necessary,no later than 28 days from the service date of
this Order.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.3373$4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of April 2017.
PAUL KJE A ER,PRESIDENT
K1PER,CO ONER
ERIC ANDERSON,COMMISSIONER
ATTEST:
Diane M.Hanian
Commission Secretary
O:IPC-E-I 7-04_djh
NOTICE Of APPLICATION
NOTICE Of MODIFIED PROCEDURE
ORDER NO.3373$5