20170425Comments.pdf

DAPTINE HUANG
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BARNO. 8370
IN THE MATTER OF THE APPLICATION OF )
rDAHO POWER COMPANY TO APPROVE rrs )
ENERGY SALES AGREEMENT WITH CAFCO )
IDAHO REF'USE MANAGEMENT LLC,IDAHO )
FORTHE SALE AND PURCHASE OF )
ELECTRIC ENERGY FROM THE SISW LFGE )
PROJECT.
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Street Address for Express Mail:
472W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC.E.I7.O4
COMMENTS OF THE
COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Daphne Huang, Deputy Attorney General, submits the following comments.
BACKGROUND
On March 22,20l7,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 ("SISW LFGE" or "Facility") near Burley, Idaho.
Under PURPA, electric utilities must purchase electric energy from "qualifying facilities"
(QFg at rates approved by this Commission. 16 U.S.C. $ 824a-3; Idaho Power Co. v. Idaho
1STAFF COMMENTS APRIL 25,20T7
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 at7, citing Rosebud Enterprises v. Idaho PUC,l2Sldaho 624,
917 P.2d 781 (1996); l8 C.F.R. $ 292.101(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 (SAR) methodology, and (2) the
integrated resource plan (IRP) methodolo gy. See Order No. 32697 at 7 -8. The Commission uses
the SAR methodology - which applies to the Facility in this case - to establish "published"
avoided cost rates. 1d 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). /d
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 "eash utility's capacity deficiency
based on load and resource balances found in each utility's [Integrated Resource Plan] IRP," as
well as o'a QF's ability to contribute to a utility's need for capacity." Id. at 16,21.
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 l0 aMW.
Id.
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.
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 [CAFCOf ." Id. Also,
2STAFF COMMENTS APzuL 25,2017
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. at4-5.
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. at5.
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.
RECOMMENDATIONS
Staff recommends that the Commission approve all of the Agreement's terms and
conditions and declare that all payments made by Idaho Power to CAFCO Idaho Refuse
Management LLC, Idaho for purchase of energy from the SISW LFGE Project will be allowed
as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this ?*O^rof April 2017 .
Daphne
Deputy Attorney General
Technical Staff: Yao Yin
i:umisc:comments/ipce I 7.4djhyy comments
JSTAFF COMMENTS APRIL 25,2017
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 25th DAY OF APRIL 2017,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF IN
CASE NO. IPC-E-17-04, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
DONOVAN WALKER
LEAD COUNSEL
IDAHO POWER COMPANY
PO BOX 70
BOrSE rD 83707-0070
E-mail : [e-mail]
dockets@idahopower. com
COGENERATION & SMALL
POWER PRODUCTION
IDAHO POWER COMPANY
PO BOX 70
BOrSE ID 83707-0070
E-mail : [e-mail]
CAFCo ID REFUSE MGMNT
JOSH T BARLOME
S ID REG SOLID WASTE DIS
1O5O WEST 4OO SOUTH
BURLEY ID 83318
E-mail: [e-mail]
SECRE Y
CERTIFICATE OF SERVICE