20170622Comments.pdf

DAPHNE HUANG
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-007 4
[phone]
IDAHO BAR NO. 8370
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPAI\'Y TO APPROVE OR
REJECT ITS EIIERGY SALES AGREEMENT
WITH SHINGLE CREEK LLC FOR THE SALE
AND PURCHASE OF ELECTRIC ENERGY
FROM THE SHINGLE CREEK HYDRO
PROJECT.
Street Address for Express Mail:
472W. WASHINGTON
BOISE, IDAHO 83702.5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. IPC.E.T7.O8
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 May 17,2017,Idaho Power Company filed an Application asking the Commission to
approve or reject its Energy Sales Agreement with Shingle Creek LLC. 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 Shingle Creek's hydro project
("Facility") near Riggins, Idaho.
Under PURPA, electric utilities must purchase electric energy from "qualifuing facilities"
(QFg at 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 purchase or'oavoided cost" rate
1STAFF COMMENTS JUNE 22,2017
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. Idoho PUC,l28 Idaho
624,917 P.2d78l (1996); l8 C.F.R. 5292.101(b)(6) (defining "avoided cost").
The Commission has established two methods of calculating avoided costs, depending on
the size of the QF project: (l) the surrogate avoided resource (SAR) methodology, and (2) the
integrated resource plan (IRP) methodology. See Order No. 32697 at7-8. The Commission uses
the SAR methodology - which applies to the Facility in this case - to establish "published"
avoided cost rates. /d. 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 costs, 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 o'each utility's capacity deficiency
based on load and resource balances found in each utility's [Integrated Resource Plan] IRP," as
well as'oa QF's ability to contribute to a utility's need for capacity." Id. at 16,21.
Idaho Power and Shingle Creek first entered into a PURPA agreement in 1982.
Application at2. That contract is set to expire July 31, 2017. Id. The Agreement at issue in this
matter is a new contract that was entered into by Idaho Power and Shingle Creek on May 8,
2017. Id. Under the Agreement's terms, Shingle Creek elected to contract with Idaho Power for
a five-year term using the non-levelized, non-seasonal, hydro published avoided cost rates, as
established by the Commission (Order No. 33538) for replacement contracts and energy
deliveries of less than l0 aMW. Id. at3-4.
The nameplate rating of the Facility is222 kilowatts (kW), and Shingle Creek agrees it
will not exceed 10 aMW on a monthly basis. Id. at4. The Facilityoois already interconnected
and selling energy to Idaho Power." /d. Nonetheless, the Agreement specifies its Scheduled
First Energy Date and Scheduled Operation Date as August 1,2017. Id. The terms and
provisions of the Agreement include that "applicable interconnection charges and monthly
operational or maintenance charges under Schedule 72 will be assessed to [Shingle Creek]." Id.
at 5. Also, PURPA QF generation "must be designated as a network resource ("DNR") to serve
Idaho Power's retail load on its system." .Id.
2STAFF COMMENTS JUNE 22,2017
To maintain DNR status under the Agreement, 'othere must be a power purchase
agreement associated with [the Facility's] transmission service request [that complies] with
Idaho Power's non-discriminatory administration of its Open Access Transmission Tariff
(OATT) and . . . with [Federal Energy Regulatory Commission] FERC requirements." Id.
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 Shingle Creek for purchases of
energy will be allowed as prudently incurred expenses for ratemaking purposes.
Respecttully submitted this L24 day of June 2017.
Daphne
General
Technical Staff: Yao Yin
i:umisc:comments/ipce I 7.8djhyy comments
JSTAFF COMMENTS JUNE 22,2017
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 22"d DAY OF JUNE 2017,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF', IN
CASE NO. IPC-E-I7.08, 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]
[e-mail]
ENERGY CONTRACTS
IDAHO POWER COMPANY
PO BOX 70
BOrSE rD 83707-0070
BRYAN DeVENY
SHINGLE CREEK LLC
PO BOX 1160
RIGGINS ID 83549
S Y
CERTIFICATE OF SERVICE