20170816notice_of_application_order_no_33738.pdf

Office of the Secretary
Service Date
August 16,2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR )CASE NO.IPC-E-17-12
APPROVAL OF THE CAPACITY )
DEFICIENCY TO BE UTILIZED FOR )NOTICE OF APPLICATION
AVOIDED COST CALCULATIONS )
)NOTICE OF
)MODIFIED PROCEDURE
)
________________________
)ORDER NO.33738
On July 26,2017.Idaho Power Company applied to the Commission for an Order
approving the capacity deficiency period to be used for the Company’s avoided cost calculations
under the Public Utility Regulatory Policies Act (PURPA).The Company asked that the
Application be processed under Modified Procedure.The Commission now issues this Notice of
Application and Notice of Modified Procedure setting comment and reply deadlines.
BACKGROUND
Under PURPA,electric utilities must purchase electric energy from qualifying
facilities (QFs)at rates approved by the applicable state agency—in Idaho.this Commission.1 6
U.S.C.§824a-3:Idaho Power Co.v.Idaho PUC.155 Idaho 780,780,316 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);18 C.F.R.§292.i0l(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)methodology.See Order No.32697 at 7-8.The Commission
uses the SAR methodology to establish what are commonly referred to as “published”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 other resource types with a design capacity of up to 10
See Order No.33785 (regarding battery storage facilities).
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33738
average megawatts (aMW).For QFs with a design capacity above the published rate eligibility
caps,avoided cost rates are “individually negotiated by the QF and the utility using the [IRP
methodology].”Id.at 2;Order No,32176.
In calculating avoided cost,the Commission 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.As to the capacity calculation for the SAR methodology,the Commission found it
appropriate “to identify each utility’s capacity deficiency based on load and resource balances
found in each utility’s IRP.”Id.With respect to the TRP methodology,the Commission
similarly stated
[i]n 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.If 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.
Id.at2l.
The Commission directed that “when a utility submits its [IRP]to the Commission,a
case shall be initiated to determine the capacity deficiency to be utilized in the SAR
Methodology [used for calculating published avoided cost rates].”Id.at 23.The Commission
also stated “utilities must update fuel price forecasts and load forecasts annually—between IRP
filings....We find it reasonable that all other variables and assumptions utilized within the IRP
Methodology remain fixed between IRP filings (every two years).”Id.at 22.
In 2015,the Commission confirmed July 2024 as Idaho Power’s capacity deficiency
period for the incremental cost JRP methodology and approved the updated SAR model based on
that deficiency period and updated SAR-based rates.Order No.33377.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that Idaho Power states that its 2017 IRP,which it
filed with the Commission on June 30,2017 (Case No.IPC-E-17-11),identifies a first peak-hour
deficit in July 2026.Application at 2.Idaho Power describes that peak-hour load deficits are
determined using percentile water and percentile peak-load conditions.Id.at 2-3.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33738
YOU ARE FURTHER NOTIFIED that the Company indicates that under the IRP’s
preferred portfolio,a first capacity deficiency of approximately 34 MW occurs in July 2026,and
a first energy deficit of 143 MW occurs in July 2029.Id.at 3,
YOU ARE FURTHER NOTIFIED that the Company requests that the first capacity
deficit date of July 2026 be used for avoided cost calculations for both the SAR and IRP
methodologies.Id.
YOU ARE FURTHER NOTIFIED that the Application has been filed with the
Commission and is available for public inspection during regular business hours at the
Commission offices.The Application is also available on the Commission’s web site at
\v.idahogv.Click on the “File Room”tab at the top of the page,then select “Electric
Cases”and click on the case number as shown on the front of this document.
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 §61-502 and 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 31.01.01.000 et seq.
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 that it will proceed under
Modified Procedure pursuant to Rules 201 through 204 of the Commission’s Rules of Procedure,
IDAPA 31.01.01.201 through .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 opposition with the Commission within
twenty-one (21)days of the date of this Order.The comment must contain a statement of
reasons supporting the comment.Persons desiring a hearing must specifically request a hearing
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33738 3
in their written comments.Written comments concerning this Application shall be mailed to the
Commission and Idaho Power at the addresses reflected below:
Commission Secretary Donovan E.Walker,Lead Counsel
Idaho Public Utilities Commission Michael Darrington,Energy Contracts
P0 Box 83720 Idaho Power Company
Boise,ID 83720-0074 1221 West Idaho Street (83702)
P.O.Box 70
Street Address for Express Mail:Boise,ID 83 707-0070
E—Mail:dxvalker idahopower.com
472 W.Washington Street indarrintonridahoppwer.corn
Boise,ID 83702-5918 docketsicIalop\\er.cfih1i
ener2vcofltracts(Lidahopower.com
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 v.uc.i al1gov.Click the “Case Comment or Question
Form”under the “Consumers”tab,and complete the comment form using the case number as it
appears on the front of this document.
YOU ARE FURTHER NOTIFIED that the Company shall file reply comments,if
necessary,within seven (7)days of the comment deadline.
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.
ORDER
IT IS HEREBY ORDERED that the Application of Idaho Power Company be
processed by Modified Procedure,Rule 201-204 (IDAPA 31.01.0l.201-.204).Persons interested
in submitting written comments must do so no later than twenty-one (21)days from the date of
this Order.
IT IS FURTHER ORDERED that if the Company wishes to file a reply,it must do so
within seven (7)days of the comment deadline.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33738 4
DONE by Order of the Idaho Public Utilities Commission at Boise.Idaho this
day of August 2017.
ATTEST:
PAUL KJELI(AID ,PRES ENT
Diane M.Hanian
Commission Secretary
O:IPC-E-17-12 cc
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33738
ERIC ANDERSON,COMMISSIONER
5