20190419Decision Memo.pdf

DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM EDWARD JEWELL
DEPUTY ATTORNEY GENERAL
DATE: APRIL 19,2019
SUBJECT:IN THE MATTER OF THE APPLICATION OF IDAHO POWER FOR
APPROVAL OF A POWER PURCHASE AGREEMENT WITH JACKPOT
HOLDINGS, LLC, FOR THE SALE AND PURCHASE OF UP TO 220
MEGAWATTS OF RENEWABLE SOLAR GENERATION; CASE NO.
rPC-E-19-14.
On April 4,2019,ldaho Power Company ("ldaho Power" or "Company") frled an
Application seeking approval of a Power Purchase Agreement ("PPA" or "Agreement") with
Jackpot Holdings LLC, ("Jackpot Solar") for energy generated by the Jackpot Solar Facility
("Facility"). The Facility is between Twin Falls and the Nevada border. Under the PPA, Idaho
Power will purchase 120 megawatts ("MW") of energy with an option to purchase an additional
100 MW of energy from the adjacent Franklin Solar Facility ("Option Facility").
THE APPLICATION
The Company states that the pricing in the PPA is "at or near nationwide record low
pricing." Application at 2. The Company states that it has conducted model runs and has
determined significant cost savings and customer benefits accrue with the acquisition of the solar
energy. Id. at 2-3. The Company estimates the Facility will save customers approximately
$90,000,000, and the combination of the Facility and the Option Facility would save customers
approximately $ 150,000,000 . See Id. at 9.
The Agreement is for a twenty year term, contains non-levelized fixed pricing that
escalates at l.5o/o annually during the term of the Agreement. Id. at 4. If the Company does not
exercise its option on the additional 100 MW. pricing for the first year of the Agreement is
1DECISION MEMORANDUM
$21.75 per MW hour ("MWh"). If the Company does exercise its option on the additional 100
MW, pricing for the first year of the Agreement is $23. I I per MWh. 1d
The scheduled commercial operation date for the Facility is December 1,2022, and
December 1,2023, forthe Option Facility. Id. at5. The pricing of the PPA is dependent upon
the developer being able to maximize the value of the federal Investment Tax Credit, which
declines at the end of December 2019. Id. at 10. Therefore, the Company requests an
expeditious proceeding resulting in a Commission Order by no later than December 2019.
STAFF RECOMMENDATION
Staff recommends the Commission issue a Notice of Application and Notice of
Intervention Deadline with a twenty-one day intervention period. Following the intervention
deadline, the parties will meet and confer about further scheduling and processing.
COMMISSION DECISION
Does the Commission wish to issue a Notice of Application and Notice of
Intervention Deadline with a twenty-one day intervention period?
Deputy General
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2DECISION MEMORANDUM