20180501Decision Memo.pdf

DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
FROM:EDITH L. PACILLO
DEPUTY ATTORNEY GENERAL
DATE: APRIL 26,2018
SUBJECT:THE APPLICATION OF IDAHO POWER COMPANY FOR APPROVAL
OR REJECTION OF AN ENERGY SALES AGREEMENT WITH
EVERGREEN ENERGY, INC., FOR THE SALE AND PURCHASE OF
ELECTRIC ENERGY FROM THE TAMARACK CSPP PROJECT, CASE
NO. rPC-E-18-04.
On March 29,2018, Idaho Power Company applied to the Commission for an order
approving or rejecting its Energy Sales Agreement (ESA) with Evergreen Energy, Inc.
(Evergreen), under which Evergreen would sell and Idaho Power would purchase electric energy
generated by the Tamarack CSPP project (Facility). Application at 1. The Tamarack CSPP
project is a 6.25 megawatt (MW) "qualifying facility" (QF) under the Public Utility Regulatory
Policies Act (PURP 1t). Id. at 4.
This request is for the approval or rejection of a new ESA applicable to an existing
project, is fully executed by both parties, and contains the Commission's standard terms and
conditions relating to surplus energy ("90%lll0o ") and operations and maintenance ("O&M")
fees. However, Evergreen, similar to Shorock Hydro, lnc., has raised objections to the inclusion
in this ESA of provisions relating to 90%lll0o/o and provisions of the ESA, Generator
lnterconnection Agreement ("GlA"), and Schedule 72 relating to the payment of O&M charges.
Idaho Power and Evergreen agree to move forward with the ESA as submitted and to be bound
by the currently approved and existing 90%lll0% and O&M provisions of the signed ESA,
unless and until the Commission issues a final order in any subsequent proceeding modifying or
changing the same, as referenced in the Stipulated Motion from Case No. IPC-E-17-14.
IDECISION MEMORANDUM
The parties have an existing ESA for the facility that expires on May 31, 2018; the
proposed ESA is a replacement contract with a new term and updated published avoided cost
rates. Id. at 2. Evergreen elected for the ESA to have a 2}-year term using the levelized, Other,
published avoided cost rates for replacement contracts and for energy deliveries less than l0
average megawatts. Id. at 4. The ESA uses the rates established by the Commission in Order
No.33773 dated June 1,2017. Id. Because the ESA is areplacement contract, its rates contain
capacity payments for the entire term. Id. at2.
Because the existing ESA will expire on May 31, 2018, Idaho Power requests a
procedural schedule that will allow for a final Commission determination prior to that date, and
requests the matter be processed by Modified Procedure. Id. at 6. In sum, Idaho Power requests
that the Commission issue an order accepting or rejecting the ESA and, if accepted, declaring
that all payments for purchases of energy under the ESA be allowed as prudently incurred
expenses for ratemaking purposes. Application at 5-6.
STAFF RECOMMENDATION
Staff recommends that the Commission issue a Notice of Application and Notice of
Modified Procedure, with comments due May 21,2018, and reply comments, if any, due May
25,2018.
COMMISSION DECISION
Does the Commission wish to issue a Notice of Application and Notice of Modified
Procedure, with comments due May 21,2018, and reply comments, if any, due May 25,2018?
Pacillo
Deputy Attorney General
IPCEI 804_ ep_dec memo_not ofapp
2DECISION MEMORANDUM