20190410Comments.pdf

EDWARD JEWELL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10446
Street Address for Express Mail:
472 W, WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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IN THE MATTER OF THE APPLICATION OF
IDAHO POWER FOR APPROVAL OF AN
ENERGY SALES AGREEMENT WITH
RAVENSCROFT HYDRO FOR ENERGY FROM
THE MALAD RIVER HYDRO PROJECT
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CASE NO. IPC-E-I9-07
COMMENTS OF THE
COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Edward Jewell, Deputy Attorney General, submits the following comments.
1STAFF COMMENTS APRIL IO,2OI9
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BACKGROUND
On February 27,2ll9,Idaho Power Company ("Idaho Power" or "Company") filed an
Application seeking approval of an Energy Sales Agreement ("ESA" orooAgreement") with
Ravenscroft Hydro for energy generated by the Malad River Hydro Project ("Facility"). The
Facility is a qualifying facility ("QF") under the Public Utility Regulatory Policies Act of 1978.
Id. The Facility is a l.l7 MW nameplate capacity hydro facility near Tuttle, Idaho.
The Facility has been delivering energy to Idaho Power under a power sales agreement
dated September 2,1982, which expires April 30, 2019. The Facility has a scheduled First
Energy Date under the ESA of May 1,2019.
The Agreement is for a2}-year term with published non-levelized, non-seasonal hydro
avoided cost rates. The ESA contains capacity payments for the entire term of the Agreement.
The Agreement contains the 5-Day Ahead provision for 90/l l0 generation estimates as
approved by the Commission in Order No. 34263.
The Company requests the Commission issue an Order accepting or rejecting the ESA
and, if accepted, declaring all payments for purchases of energy under the ESA be allowed as
prudently incurred expenses for ratemaking purposes.
STAFF ANALYSIS
Staff recommends approval of the proposed ESA between Idaho Power and Ravenscroft
Hydro. Staff s justification is based upon review of the ESA, which focused on: (1) the 90/l l0
rule; (2) eligibility for, and the amount of, capacity payments; (3) verif,rcation of non-seasonal
hydro status; and (4) adherence to the capacity size threshold to qualify for published rates.
90/110 Rule
Qualifying facilities provide a monthly estimate of the amount of energy they expect to
produce. If the QF delivers more than 110 percent of the estimated amount, energy delivered in
excess of 1 10 percent is priced at the lesser of 85 percent of the market price or the contract
price. If the QF delivers less than 90 percent of the estimated amount, total energy delivered is
priced at the lesser of 85 percent of the market price or the contract price. Order No. 29632.
Staff verified that this provision is included in the ESA.
The ESA adopted a five-day advance notice, instead of one-month, for adjustments to
monthly generation estimates used for the 90/l l0 performance band. A change in the amount of
advance notice was first proposed and subsequently approved in a renewal ESA between
Simplot, Co. and Idaho Power in Case No. IPC-E-19-01. Consistent with Commission Order
No. 34263, Staff recommends approval of the 5-Day Ahead provision in this case for similar
reasons, as described below.
Staff determined that a 5-Day Ahead provision to revise energy delivery estimates is
reasonable and could potentially be more accurate for the Company to use in its short-term
planning as they enter into the delivery month. The facility has been delivering energy to the
Company since the 1980's and has extensive historical production data that the Company can use
for both short-term and long-term planning. In future requests where QF historic generation data
2STAFF COMMENTS APzuL IO,2OI9
is absent, Staff plans to investigate if it is reasonable to reduce the notification period for
revisions to monthly generation estimates.
Capacity Pavment
"If a QF project is being paid for capacity at the end of the contract term, and the parties
are seeking renewal/extension of the contract, the renewal/extension includes immediate
payment of capacity." Order No. 32697. Staff verified that this project is being paid for capacity
at the end of the original contract, and thus the proposed avoided cost rates are allowed to
include capacity payment for the full term of the replacement contract.
Nalr-Seasonal Hydro Status
A "seasonal hydro" project is a hydro generation facility that produces at least 55% ofits
annual generation during the months of June, July, and August. Staff verified that this project
does not generate 55oh of its annual generation during the three months according to the Monthly
Estimated Net Energy Amounts provided, and thus it is categorized as aoonon-seasonal hydro"
project. Staff confirmed that the ESA is based on the avoided cost rates of non-seasonal hydro
resources
Capacity Size Threshold
In order for a hydro project to qualify for published rates, the project capacity cannot
exceed 10 aMW. Project capacity is determined on a monthly basis under normal or average
design conditions. In other words, the maximum monthly generation that qualifies for published
rates is capped at the total number of hours in the month multiplied by l0 MW. Order No.
29632 at 14. This project has a 1,169 kW nameplate capacity and therefore produces less than
l0 aMW on a monthly basis under normal or average conditions. Staff verified the project is
eligible for published avoided cost rates.
3STAFF COMMENTS APRIL IO,2OI9
STAFF RECOMMENDATION
Staff recommends the Commission approve the ESA. Staff also recommends the
Commission declare Idaho Power's payments to Ravenscroft Hydro for the purchase of energy
generated by the Malad River hydro project under the ESA be allowed as prudently incurred
expenses for ratemaking purposes.
Respectfully submitted this I oI'- day of Apr il 2olg.
Edward
Deputy General
Technical Staff: Rachelle Farnsworth
Travis Culbertson
Yao Yin
i :umisc/comments/ipce I 9.7ejyyrftnc comments
4STAFF COMMENTS APRIL IO,2O19
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 1OTH DAY OF APRIL 2019,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-19.07, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
DONOVAN WALKER
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOrSE tD 83707-0070
E-mail : [e-mail]
[e-mail]
ALLAN RAVENSCROFT
RAVENSCROFT HYDRO
I33I SHOESTRING ROAD
BLISS ID 83314
E-mai I : ar av en@tuttl e. mwlnet
ENERGY CONTRACTS
IDAHO POWER COMPANY
PO BOX 70
BOrSE rD 83707-0070
E-mail: [e-mail]
CERTIFICATE OF SERVICE