20171026Petition for Clarification.pdf

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Donovan E. Walker
An IDACORP Company
1221 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
DONOVAN E. WALKER
Lead Counsel
[e-mail]
October 26,2017
VIA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Case No. !PC-E-17-12
Capacity Deficiency to be Utilized for Avoided Cost Calculations - ldaho
Power Company's Petition for Clarification and/or Reconsideration
Dear Ms. Hanian:
Enclosed for filing in the above matter please find an original and seven (7)
copies of ldaho Power Company's Petition for Clarification and/or Reconsideration.
Very truly yours,
Re
DEW:csb
Enclosures
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221\Nest ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwa I ke r@ id a h opoweteqm
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF THE CAPACIry
DEFICIENCY TO BE UTILIZED FOR
AVOI DED COST CALCULATIONS
l_l
;!i fr:.'i t.. ,) ?l il r:'uL
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. IPC-E-17-12
IDAHO POWER COMPANY'S
PETITION FOR CLARIFICATION
AND/OR RECONSI DERATION
ldaho Power Company ("ldaho Power" or "Company"), petitioner herein, pursuant
to RP 33,325, and 331, ef seg., and ldaho Code S 61-626, respectfully petitions the
ldaho Public Utilities Commission ("Commission") for clarification and/or reconsideration
of Order No. 33898, dated October 5, 2017, issued in Case No. IPC-E-17-12 ("the
Order"). ldaho Power seeks clarification/reconsideration regarding that portion of the
Order that addresses movement of the Company's capacity deficiency based upon
capacity contributions of Qualifying Facilities ('QF') in the pricing queue. Order No.
33898, pp. 8-9. This type of incremental QF pricing was specifically considered and
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION - 1
subsequently authorized and directed by the Commission in final Order No. 33357,
p. 28 (Case Nos. IPC-E-15-01, AVU-E-15-01, and PAC-E-15-03), which specifically
rescinded, altered, and amended that portion of Order No. 32697 which restricted the
incremental pricing of Public Utility Regulatory Policies Act of 1978 ("PURPA') QFs to
update only upon the execution of a signed contract. Order No. 33357, p. 28 (citing
ldaho Code S 61-624). ldaho Power seeks clarification from the Commission that the
Company is to continue to calculate indicative pricing on an incremental basis according
to its pricing queue as directed in Order No. 33357.
To the extent that the Commission feels the requested clarification goes beyond
the scope of a clarification, ldaho Power then respectfully requests reconsideration of
the issues identified herein. See RP 325.
I. BACKGROUND
ln Order No. 32697, the Commission directed that a case be initiated outside of
each utility's lntegrated Resource Plan ("lRP") filing for the establishment of the capacity
deficiency period to be utilized in the utility's Surrogate Avoided Resource ('SAR")
methodology.
[W]e find it reasonable and fair to subject each utility's
determination of capacity deficiency to further scrutiny.
Therefore, when a utility submits its Integrated Resource
Plan to the Commission, a case shall be initiated to
determine the capacity deficiency to be utilized in the SAR
Methodology. The capacity deficiency determined through
the IRP planning process will be the starting point, and will
be presumed to be correct subject to the outcome of the
proceeding.
Order No. 32697, p.23
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION - 2
ln Order No. 33159, the Commission found it just and reasonable to utilize the
same first capacity deficit determination for purposes of the incremental cost IRP
methodology. The Commission stated
ln calculating a QF's ability to contribute to a utility's need for
capacity, we find it reasonable for the utilities to only begin
payments for capacity at such time that the utility becomes
capacity deficient. lf a utility is capacity surplus, then
capacity is not being avoided by the purchase of QF power.
By including a capacity payment only when the utility
becomes capacity deficient, the utilities are paying rates that
are a more accurate reflection of a true avoided cost for the
QF power.
Order No. 33159, p. 7
Additionally, in Order No. 33357, the Commission directed that the utilities are to
update the indicative avoided pricing for each individually proposed QF project by
reflecting the price for proposed power on an incremental basis according to the
projects in the pricing queue. The Commission stated
The Commission finds that the "signed contract" language in
Order No. 32697 did not achieve its intended result. When
developers flood the utilities with many proposed projects in
a short period of time, the "signed contract" requirement
yields inaccurate avoided costs. The result is artificially
inflated pricing.
We find that creation of a queue to track the order in which
QF proiects have entered neqotiations with a utility, so that
incremental picinq can be calculated to reflect the actual
impacts of each proiect is reasonable and appropriate.
Consequently, we eliminate the "signed contract"
requirement of Order No. 32697 and allow utilities to update
their incremental pricing for QFs in their PUPRA queue.
ldaho Code S 61-624. Such a process will improve the
accuracy of proposed prices, and improve the predictability
of the process to both the utilities and the QFs.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION - 3
Order No. 33357 , p. 28 (emphasis added).
II. CLARIFICATION OF ORDER NO. 33898
The Commission ultimately approved ldaho Power's Application, and found that
"the Company's capacity deficiency period for the avoided cost SAR and IRP
methodologies is July 2026." Order No. 33898, p. 9. However, in commenting upon
Staff's comments, the Commission states:
Staffs interpretation of capacity deficiency determinations
under the IPR methodology-that July 2026 is a starting
point and the actual deficiency date will "float around"
depending on the capacity contributions of QFs in the
queue-is a divergence from our prior Orders and from the
Company's request in this Application. See, e.9., Order No.
32697 at 23 (acknowledging that the IRP process
determines when the utility will experience a need for new
capacity); Order No.33159 at 9 and Order No.33377 at 3
(each approving new deficiency dates based on changes to
the information from the last IRP); Application at 4
(requesting approval of a deficiency date of July 2026 for the
SAR and IRP methodologies). We find that such a
divergence, without a more thorough analysis of reasoning
and potential impacts, would not be just and reasonable.
Order No. 33898, pp. 8-9.
Any such "divergence" from Order No. 32697 was addressed in the
Commission's specific consideration of this issue and determination in Order No. 33357
to adopt incremental pricing for QF's according to their respective positions in a PURPA
pricing queue. Order No. 33357, p. 28. This determination was a result of Rocky
Mountain Power's proposal to authorize such incremental pricing based upon a pricing
queue, and was supported by witness Dr. Reading on behalf of intervenors Clearwater
Paper Corporation and J. R. Simplot Company. The Commission stated that "No party
opposed Rocky Mountain's incremental pricing request." ld., p.27. Staff and Staff
witness, Dr. Yao Yin, supported such request and offered testimony in favor of the same
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION .4
in that proceeding. It was specifically contemplated that the incremental inclusion of
proposed projects according to a queue would allow for inclusion of that project's
capacity contribution and effect on the sufficiency/deficiency of the utility. Staff witness,
Dr. Yin, testified, "Using a queue will allow indicative pricing to reflect how each project
actually displaces the utility's resources and contributes to the utility's capacity at the
start of the negotiation process." Yin Direct, p.7,11. 5-8 (Case No. IPC-E-15-01). "lf
projects are not placed in a queue, there could be substantial over payments in avoided
cost rates to QFs." ld.,ll. 21-23.
There is no conflict, discrepancy, or inconsistency with establishing the first
capacity deficiency by case filing initiated with the filing of the utility's lRP, and then
additionally adjusting from that "base" deficiency determination by the incremental
inclusion, according to the pricing queue, of the incremental addition of QF megawatts.
ln fact, as the Commission recognized in adopting and requiring incremental pricing
pursuant to a pricing queue, "Such a process will improve the accuracy of proposed
prices, and improve the predictability of the process to both the utilities and the QFs."
Consequently, Idaho Power seeks clarification/reconsideration that the utilities are to
continue to follow the directive from Order No. 33357 that indicative pricing is to be
done on an incremental basis with the inclusion of each proposed project according to
its order in the queue. This has the effect of potentially moving the first capacity deficit
established at the time of the IRP and set by this case as July 2026, which is an
intended result that acts to protect customers from an over-estimated avoided cost rate.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION - 5
III. NATURE AND EXTENT OF EVIDENCE AND ARGUMENT
TO BE OFFERED ON RECONSIDERATION
Commission Rule of Procedure 331 requires that ldaho Power state the nature
and extent of evidence or argument it will present or offer if reconsideration is granted.
Should the Commission determine that the requested issue for clarification is more
appropriate for reconsideration, ldaho Power stands ready to augment the evidentiary
record by additional comments, legal briefing, testimony, exhibits, and hearing, any or
all of which as determined to be appropriate and at the discretion of the Commission.
rv. coNcLUSroN
ldaho Power respectfully requests that the Commission issue an order clarifying
that the Company is to continue to follow the directive from Order No. 33357 that
indicative pricing is to be done on an incremental basis with the inclusion of each
proposed project according to its order in the queue, and that the base first capacity
deficiency for the avoided cost SAR and IRP methodologies is July 2026.
Respectfully submitted this 26th day of October 2017.
OVAN E KER
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION - 6
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 26th day of October 2017 ! served a true and
correct copy of IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION
AND/OR RECONSIDERATION upon the following named parties by the method
indicated below, and addressed to the following:
Commission Staff
Camille Christen
Deputy Attorney General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
ldaHydro
C. Tom Arkoosh
ARKOOSH LAW OFFICES
802 West Bannock Street, Suite 900
P.O. Box 2900
Boise, ldaho 83701
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Bearry,al
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION - 7