20170521Comments.pdf

EDITH PACILLO
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 5430
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR APPROVAL
OR REJECTION OF AN ENERGY SALES
AGREEMENT WITH E\TERGREEN ENERGY,
INC., FOR THE SALE AND PURCHASE OF
ELECTRIC ENERGY FROM THE TAMARACK
CSPP PROJECT.
RECEIVED
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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
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CASE NO. IPC-8.18.04
COMMENTS OF
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
attorney of record, Edith Pacillo, Deputy Attorney General, and in response to the Notice of
Application and Modified Procedure issued in Order No. 34051 on May 7 ,2018, in Case No.
IPC-E-I8-04, submits the following comments.
BACKGROUND
On March 29,20l8,Idaho Power Company applied to the Commission for an Order
approving or rejecting its Energy Sales Agreement (ESA) with Evergreen Energy, Inc.
(Evergreen). Under the proposed ESA, Evergreen would sell and Idaho Power would purchase
electric energy generated by the Tamarack CSPP biomass project located near Tamarack, Idaho.
The Tamarack CSPP biomass project is a 6.25 megawatt (MW) "qualifying facility" (QF) under
the Public Utility Regulatory Policies Act (PURPA). The parties have an existing ESA for the
ISTAFF COMMENTS MAY 21,2018
facility that expires on May 31,2018; the proposed ESA is a replacement contract with a new
term and updated published avoided cost rates. Because the ESA is a replacement contract, its
rates contain capacity payments for the entire term.
STAFF ANALYSIS
Idaho Power and Evergreen agree to be bound by the currently approved and existing
90/110 provision and operations and maintenance (O&M) fees provision unless and until the
Commission issues a final order on the petition from Idahydro, Shorock Hydro Inc., the J.R.
Simplot Company, and the Renewable Energy Coalition regarding these two provisions in Case
No. IPC-E-18-07. Staff finds this procedure acceptable.
Evergreen elected to contract with Idaho Power for a2}-year term using the levelized,
published avoided cost rates. Compared to the non-levelized rates, levelized rates are higher in
the beginning years, and the overpayment will be offset in the later years. All the overpayment
will be fully offset when the contract expires. Therefore, if the contract terminates earlier than
expected, the overpayment will not be fully offset; Idaho Power will calculate the overpayments
and receive a refund from the QF. Staff reviewed the overpayment calculation method and
believes the approach is appropriate.
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.
RECOMMENDATION
Staff recommends that the Commission approve all of the Agreement's terms and
conditions and declare that all payments made by Idaho Power to Evergreen for purchase of
energy from the Tamarack CSPP biomass project will be allowed as prudently incurred expenses
for ratemaking purposes.
2STAFF COMMENTS MAY 21,2018
Respecttully submitted this ft W-May 2018
Pacillo
Deputy Attomey General
Technical Staff: Yao Yin
Rachelle Farnsworth
i : umisc:comments/ipce I 8.4epyyrf comments
JSTAFF COMMENTS MAY 21,2018
CERTIFICATB OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 2I't DAY OF MAY 2018,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC.E-18-04, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
DONOVAN E WALKER
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOrSE ID 83707-0070
E-mail: [e-mail]
dockets@ i dahopower. com
ENERGY CONTRACTS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-mail : [e-mail]
PRESTON N CARTER
GIVENS PURSLEY LLP
60I W BANNOCK ST
BOISE ID 83702
E-mail: [e-mail]
CERTIFICATE OF SERVICE