20171012notice_of_application_order_no_33912.pdf

Office of the Secretary
Service Date
October 12,2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )CASE NO,IPC-E-17-14
OF IDAHO POWER TO APPROVE OR )
REJECT ITS ENERGY SALES )NOTICE OF APPLICATION
AGREEMENT WITH SHOROCK HYDRO,)
INC.,FOR THE SALE AND PURCHASE OF )NOTICE OF
ELECTRIC ENERGY FROM THE ROCK )MODIFIED PROCEDURE
CREEK 1 HYDRO PROJECT )
_____________________________
)ORDER NO.33912
On September 28,2017,Idaho Power Company applied to the Commission to approve or
reject its Energy Sales Agreement (“Agreement”)with Shorock Hydro,Inc.(“Shorock”).The
Agreement falls under the Public Utility Regulatory Policies Act of 1978 (PURPA),and is a new
contract for the sale of electric energy to Idaho Power from Shorock’s Rock Creek I Hydro
project (“Facility”)near Twin Falls,Idaho.The Agreement replaces an existing PURPA
contract executed in 1981.Application at 2-3.Idaho Power asked that its Application be
processed by Modified Procedure and requested a final Commission decision before January 15,
2018,when the existing contract expires.Id.at 6.
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);18 C.F.R.§292.I01(b)(6)(defining “avoided cost”).
The Commission has established two methods of calculating avoided cost,depending on
the size of the QF project:(I)the surrogate avoided resource (SAR)methodology,and (2)the
integrated resource plan (IRP)methodology.See Order No.32697 at 7-8.The Commission uses
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33912 1
the SAR methodology which applies to the Facility in this case to establish “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 all other resource types with a design
capacity of up to 10 average megawatts (aMW).Id.In this case,the Facility is a QF under the
“all other resource type”(specifically “non-seasonal hydro”)category Application at 3-4.
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 and Shorock entered the Agreement
on September 25,2017.Application at 3-4.Under the Agreement,Shorock elected to contract
with Idaho Power for a 20-year term using the non-levelized,non-seasonal,hydro published
avoided cost rates,as established by the Commission (Order No.33773)for replacement
contracts and energy deliveries of less than 10 aMW.Id.at 4.
YOU ARE FURTHER NOTIFIED that the nameplate rating of the Facility is 2,166 kW,
and Shorock agrees it will not exceed 10 aMW on a monthly basis.Id.at 5.The Facility “is
already interconnected and selling energy to Idaho Power”under the existing contract.Id.The
Agreement specifies a Scheduled First Energy Date and Scheduled Operation Date of January
16,2018.Id.The terms of the Agreement include that “applicable interconnection charges and
monthly operational or maintenance charges under Schedule 72 will be assessed to [Shorock].”
Id.Also,PURPA QF generation “must be designated as a network resource (DNR)to serve
Idaho Power’s retail load on its system.”Id.at 5-6.
YOU ARE FURTHER NOTIFIED that to maintain DNR status under the Agreement,
“there must be a power purchase agreement associated with [the Facility’s]transmission service
request in order to maintain compliance with Idaho Power’s non-discriminatory administration
of its Open Access Transmission Tariff (OATT)and maintain compliance with [Federal Energy
Regulatory Commission]requirements.”Id.at 6.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO,33912 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 [Shorock]for purchases of energy will be allowed as
prudently incurred expenses for ratemaking purposes.”Id.
YOU ARE FURTHER NOTIFIED that Shorock objects to the Company’s proposed
inclusion in the Agreement of:(1)“90%/i 10%”provisions (relating to surplus energy);and (2)
provisions relating to Operation and Maintenance (O&M)charges in the Generator
Interconnection Agreement.Id at 2.However,Shorock and Idaho Power submit that the
Agreement is fully executed “with the joint understanding that [Shorock’s]objections to [these]
provisions would be raised and argued for the Commission’s determination in Comments from
both parties as part of [this case].”Id.Shorock and Idaho Power agreed to be bound by the
executed Agreement with whatever determination the Commission makes regarding the disputed
provisions.Id.
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 Website at www.puc.idaho.gov under “File Room”and then “Electric
Cases.”
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 Shorock,and any person desiring to state a
position on this Application may file a written comment in support or in opposition with the
Commission no later than October 31,2017.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:
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33912 3
Commission Secretary Donovan E.Walker,Lead Counsel
Idaho Public Utilities Commission Idaho Power Company
P0 Box 83720 1221 West Idaho St.(83702)
Boise,ID 83720-0074 P0 Box 70
Boise,ID 83707-0070
Street Address for Express Mail:E-mail:dwalker(ii:idahopower.corn
docketsidahopower.com
472 W.Washington Street energvcontracts(idahopower.com
Boise,ID 83702-5918
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 wv.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 Staff and Idaho Power may file reply comments
no later than November 21,2017.
YOU ARE FURTHER NOTIFIED that Idaho Power may file sur-reply comments no
later than December 5,2017.
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,et seq.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33912 4
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure.
Rules 201-204 (IDAPA 31.0l.01.201-.204).Shorock and any interested persons shall have until
October 31.2017 to file written comments.Staff and Idaho Power shall have until November 21,
2017 to file reply comments,and Idaho Power shall have until December 5,2017 to file a sur
reply,if any.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of October 2017.
ATTEST:
Diane M.Hanian
Commission Secretary
JLegalLORDERS\1PCE1 714 dh Notice doe
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33912
KRISTINE RAPER,COMMISSIONER
5