20200407Reply Comments.pdf

REPLY COMMENTS 1 APRIL 7, 2020
EDWARD J. 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:
11331 W. Chinden Blvd., Ste. 201-A
BOISE, IDAHO 83714

Attorney for the Commission Staff

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF
IDAHO POWER FOR APPROVAL OF THE
CAPACITY DEFICIENCY TO BE UTILIZED
FOR AVOIDED-COST CALCULATIONS

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CASE NO. IPC-E-19-20

REPLY COMMENTS OF
THE COMMISSION STAFF

COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
attorney of record, Edward J. Jewell, Deputy Attorney General, and hereby submits the
following responsive comments.

BACKGROUND
On June 28, 2019, Idaho Power Company (“Idaho Power” or "Company") filed an
Application requesting the Commission approve a first capacity deficit date of July 2029 to be
used in avoided-cost calculations under the Public Utility Regulatory Policies Act of 1978
(“PURPA”). The Company subsequently filed a letter in IPC-E-19-19 stating that the Company
would need to conduct supplemental analyses to verify the accuracy of the Company's 2019
Integrated Resource Plan ("IRP"). The IRP analysis forms the basis for determination of the
Company's first capacity deficit date. Therefore, the Commission issued a Notice of Application
but stated that no further action would be taken until the Company submitted its amended 2019
IRP. Order No. 34411.
RECEIVED
2020 April 7,PM2:02
IDAHO PUBLIC
UTILITIES COMMISSION

REPLY COMMENTS 2 APRIL 7, 2020
On January 31, 2020, the Company submitted its amended 2019 IRP.
On March 10, 2020, Commission Staff presented a Decision Memo at the Commission’s
Decision Meeting recommending the Commission dismiss the Company’s Application for
reasons discussed herein. Counsel for the Company requested the opportunity to respond to
Staff’s recommendation. The Commission directed the Company to make those points in
writing.
On March 17, 2020, the Commission issued a Notice of Modified Procedure and
established a comment deadline on whether the Company is to make its capacity deficiency
filing when it files its IRP, or whether the Company is to make its capacity deficiency filing
when the Commission acknowledges the Company’s IRP. Order No. 34598.
On March 31, 2020, the Company responded to Staff’s recommendation to dismiss the
case.

STAFF RESPONSE
After reading the Company’s response, Staff recommends that the Commission dismiss
the Company’s filing and that the Company file the case after acknowledgement of the
Company’s IRP. Staff makes this recommendation because: (1) it is consistent with Order
No. 33917, the latest Commission order on this subject; (2) ensures accuracy from a more
comprehensive Staff review; (3) waiting until after IRP acknowledgment rather than beginning
the case with the filing of the IRP does not necessarily lead to higher avoided cost rates; and (4)
the Commission has previously changed PURPA implementation for all Idaho utilities in a
single-utility docket, and therefore the Company should be aware that changes to PURPA
implementation can be made in dockets for other utilities, which will affect the Company. If the
Commission orders the Company to file its capacity deficiency case upon IRP acknowledgement,
Staff also recommends that the Company update its capacity deficiency analysis to reflect changes
made through the Amended and acknowledged 2019 IRP.

1. Filing after acknowledgment is consistent with the explicit terms of the latest
Commission order on this subject.
In Order No. 32698, Case No. GNR-E-11-03, the Commission established the
requirement that Idaho utilities submit a case to determine their respective first capacity
deficiency dates for the Surrogate Avoided Resource method of determining avoided-cost rates

REPLY COMMENTS 3 APRIL 7, 2020
when the utilities file their IRPs. However, in Order No. 33917, in PAC-E-17-09, the
Commission found it reasonable to postpone the utilities’ capacity deficiency date filings until
after the Commission had acknowledged the Company’s IRP. “We therefore amend Order
No. 32697 to direct utilities to file their first capacity deficiency cases after the Commission has
acknowledged their IRP reports.” Order No. 33917.

2. Filing after IRP acknowledgement ensures greater accuracy from a more
comprehensive Staff review.
Staff maintains that filing the capacity deficiency case after the IRP is acknowledged
provides the opportunity for the capacity deficiency case to benefit from the comprehensive
review conducted by Staff in the IRP acknowledgement process. Staff believes a more
comprehensive review provides a more thorough analysis which the Commission can use to
inform its determination of the date and magnitude of the Company’s capacity deficiency.
The size and timing of the Company’s first deficiency are determined through the load
and resource balance in the IRP. The factors that affect it include the load forecast as well as the
capacity contribution of existing and committed resources. Prior to Order No. 33917 in the
PAC-E-17-09 case, the three Idaho utilities were ordered to file their capacity deficiency case at
the time of filing their IRP’s for Commission review. Order No. 32698. While capacity
deficiency cases are usually processed in less than a couple of months, the extensive IRP review
requires considerably more time. Because of the filing date and processing time of the two
cases, there was always a risk that issues could be discovered during Staff’s deeper IRP review
that could affect the utility’s first capacity deficiency after the Commission authorizes it. This
risk became real given the events that occurred in the Company’s filings this year.
The Application for this year’s first capacity deficiency was filed on June 20, 2019,
basing its capacity deficiency analysis on the information contained in the initial 2019 IRP, filed
on June 28, 2019. It was during Staff’s comprehensive review of the Company’s 2019 IRP
information used as justification in the Jackpot Solar case (Case No. IPC-E-19-14) that it
uncovered issues that led the Company to delay its IRP, and all the cases that depend up on it,
including this one, for six months. Had the Commission processed the capacity deficiency case
prior to Staff discovering these issues, the Company’s first deficiency date would have been
based on outdated and potentially incorrect load and resource balance results. Staff believes that

REPLY COMMENTS 4 APRIL 7, 2020
by filing capacity deficiency cases after IRP acknowledgment, these types of risks can be
potentially eliminated.
In this case, Staff believes that the changes in the Amended IRP results, especially the
amount of committed resources due to the addition of the Jackpot Solar Power Purchase
Agreement in the load and resource balance, may affect the capacity deficiency analysis
contained in the Company’s original Application. If the Company is required to resubmit its
Application, Staff recommends that the Company be ordered to resubmit its capacity deficiency
analysis and proposed capacity deficiency date and amounts based on information contained in
the Company’s Amended and acknowledged 2019 IRP, rather than upon information contained
in the Company’s original 2019 IRP.
Staff believes that the comprehensive review it provides during the IRP review process
can and does provide vetted information that can inform the Commission’s determination of the
capacity deficiency date. Staff review of previous Company IRPs has resulted in the Company
changing several significant aspects of its IRP. Examples include changing to a capacity
expansion model, using a more appropriate natural gas price forecast, adding demand response to
meet future capacity deficits, aligning supply-side and demand-side resource valuation, selecting
a least-cost portfolio as the preferred portfolio, and incorporating stakeholder feedback. These
particular examples may not directly impact the capacity deficit analysis, however, inaccuracies
or mistakes made in the Company’s load forecast or determination of existing resource capacity
could be found through a more in-depth IRP review, which would not only make the capacity
deficit review more efficient for Staff, but also provide better information for the Commission to
make a more informed decision.

3. Filing after IRP acknowledgement does not necessarily lead to higher avoided cost
rates.
Idaho Power claims in its comments that whenever there is a delay from the time that we
know an input to avoided costs will be different to the time when that change is put in place, there is
the potential for QF projects to lock-in higher rates for the duration of their PURPA contracts, to the
direct detriment of customers. Staff believes avoided cost rates can go up or down, and accuracy in
avoided costs matter more than the direction of change.
There are two major, regular updates to the inputs of the SAR model that determine the
published rates of avoided costs: the natural gas price forecast update that occurs every June 1 and

REPLY COMMENTS 5 APRIL 7, 2020
the capacity deficiency update that occurs every other year. Because the natural gas forecast update
does not depend on the IRP process, a delay in the IRP process does not affect the impacts of that
update on avoided cost rates.
The impacts of the capacity deficiency update, however, will be affected by a delay in the
IRP process, because the first deficit year and the magnitude of deficiency could vary from IRP to
IRP. When the first deficit year comes earlier, capacity payment starts earlier. When the first deficit
year comes later, capacity payment starts later. The magnitude of deficiency can also affect avoided
cost rates. Order No. 32737 states,
The SAR model recognizes not only the timing of when the first deficit
occurs, but also the magnitude of the deficit. The SAR model values
capacity based only on the amount of capacity that is useful to the
utility. In other words, if only a portion of a QF’s capacity is needed
in the initial years to fully satisfy the utility’s deficit, then credit is only
given to that portion. As the utility’s deficit grows, increasing amounts
of the QF’s capacity are given credit until the year when the utility’s
deficit exceeds the QF’s capacity, when full value for the QF’s capacity
is given.
Therefore, when an IRP is delayed, avoided cost rates can go up or down, depending on the net effect
of these two factors in capacity deficiency. Regardless of the direction of the change, Staff believes
accuracy in avoided cost rates is critical, which reinforces the importance of a comprehensive review
of the IRP as discussed in the prior section of these comments.

4. The Commission has previously changed all-utility requirements in a single-utility
docket.
In the Company’s Comments for this case, it states: “Idaho Power is not aware of any case
that directly says the Commission does not change requirements applicable to all utilities in a single-
utility docket, I think everyone would agree that the Commission historically, or traditionally, has not
made this its practice.” In addition to Case No. PAC-E-17-09, the Commission established that the
90/110 performance band was generally applicable to all three Idaho electric utilities in two single-
utility dockets: IPC-E-04-08 and IPC-E-04-10. Admittedly, the other utilities were intervenors in
this pair of cases.
The Company has reason to know that the Commission has previously applied PURPA
decisions in a utility-specific docket to other Idaho utilities. In Case No. PAC-E-05-09, PacifiCorp
argued that the 90/110 rule, which was established in Order No. 29632 in IPC-E-04-08/IPC-E-04-10
did not apply to all three utilities. PacifiCorp argued that the Commission did not expressly mandate

REPLY COMMENTS 6 APRIL 7, 2020
Order No. 29632 to be generally applicable and that the 90/110 rule may be a reasonable provision
for Idaho Power, but did not believe that it was the only reasonable provision for each Idaho utility.
See PacifiCorp Reply Comments PAC-E-05-09. However, the Commission rejected the proposed
Power Purchase Agreement at issue because it did not contain a 90/110 provision, or a similarly
rigorous provision, and stated,
The Commission clarifies that the 90/110 performance band
established in Order No. 29632 is applicable to all three utilities,
PacifiCorp as well as Idaho Power and Avista. The Commission
develops its PURPA contract standards and requirements in generic
methodology, ratesetting and complaint cases. Reference Rosebud
Enterprises v. Idaho Public Util. Comm’n, 128 Idaho 609 at 615
(1996).
Order No. 29880 at 10. Despite the Commission’s implementation of the 90/110 band in Order
No. 29632 not explicitly stating it applied to the other utilities, the Commission held in Order
No. 29880 that the 90/110 provision did indeed apply to other utilities.
Additionally, in the Background section of Order No. 34510, in IPC-E-19-31, the
Commission stated, “The Commission further directed that utilities initiate a case every two years, to
determine the capacity deficiency period to be used in the SAR avoided cost methodology. [Order
No. 32802 at 23] (timing of filing changed from the time of the IRP filing to upon acknowledgment
of the IRP, in Order No. 33917).” IPC-E-19-31 was an Idaho Power-specific case and stated that the
proper time to file a capacity deficiency case was after IRP acknowledgement.
Idaho Power could have petitioned for reconsideration or clarification of Order No. 33917 or
Order No. 34510 but did not do so. Pursuant to Commission Rule 331, “any person interested in a
final order or any issue decided in a final order of the Commission may petition for reconsideration.”
IDAPA 31.01.01.331.01. In other words, a person (or a company) does not need to be a party to the
underlying case to petition for reconsideration.
Staff believes that the major regulated utilities in Idaho have the capability to monitor all
PURPA-related orders issued by the Commission, and that Idaho utilities reasonably should know
that the Commission has previously applied decisions from utility-specific dockets to other Idaho
utilities. However, Staff also acknowledges that there are potential fairness and notice issues when
the Commission makes changes to all utilities in a utility-specific docket and doing so could
potentially impact whether such actions are implementations of PURPA or applications of PURPA to
specific facts. But, given the issues with this year’s review and the strong logic behind doing the
capacity deficit review after the more thorough IRP review, Staff believes the Commission should

REPLY COMMENTS 7 APRIL 7, 2020
order the Company to file its capacity deficit review cases following IRP acknowledgement and use
updated information based on comments and the acknowledging order.

STAFF RECOMMENDATIONS
Staff recommends the Commission dismiss the Company’s filing and order the Company
to submit its capacity deficiency filings upon IRP acknowledgment and require the Company to
provide updated capacity deficiency analysis, proposed capacity deficiency date and amounts
based on information contained in the Company’s Amended and acknowledged 2019 IRP.

Respectfully submitted this 7th day of April 2020.

________________________________
Edward J. Jewell
Deputy Attorney General

Technical Staff: Yao Yin
Rachelle Farnsworth
Travis Culbertson

i:umisc/comments/ipce19.20ejrfyytnc reply comments
CERTIFICATE OF SERVICE
CERTIFICATE OF SERVICE

I HEREBY CERTIFY THAT I HAVE THIS 7th DAY OF APRIL 2020,
SERVED THE FOREGOING REPLY COMMENTS OF THE COMMISSION
STAFF, IN CASE NO. IPC-E-19-20, BY E-MAILING A COPY THEREOF, TO
THE FOLLOWING:

DONOVAN WALKER
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-mail: [e-mail]
[e-mail]

MICHAEL DARRINGTON
ENERGY CONTRACTS LEADER
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-mail: [e-mail]
[e-mail]

BENJAMIN J OTTO
ID CONSERVATION LEAGUE
710 N 6TH ST
BOISE ID 83702
E-mail: [e-mail]

C TOM ARKOOSH
ARKOOSH LAW OFFICES
PO BOX 2900
BOISE ID 83701
E-mail: [e-mail]
[e-mail]

/s/ Reyna Quintero __
SECRETARY