20190917Final_Order_No_34442.pdf

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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
oF rDAHO POWER COMPANY FOR )
APPROVAL OF THE FIRST AMENDMENT )
TO THE ENERGY SALES AGREEMENT )
FOR THE BOX CANYON HYDRO PROJECT )
CASE NO. IPC.E.I9.25
0RDER NO. 34442
On July 25,z}Ig,Idaho Power Company filed an Application seeking approval of the
First Amendment to its Energy Sales Agreement (ESA) with Scott and Rick Kaster (the Sellers).
The ESA falls under the Public Utility Regulatory Policies Act of 1978 (PURPA), and is a contract
for the sale and purchase of electric energy generated by the Box Canyon Hydro project, a PURPA
qualifying facility (QF). The Amendment addresses when the Sellers must notify Idaho Power in
order to revise future monthly Estimated Net Energy Amounts. Idaho Power asked that the
Commission process its Application by Modified Procedure.
On August t4,2019, the Commission issued a Notice of Application and Modified
Procedure, setting a September 4,2019 comment deadline and a September 11, 2019 reply
comment deadline. Staff filed the only comments. Idaho Power did not file reply comments.
Having reviewed the record, we now approve the Amendment as discussed below.
BACKGROUND
Under PURPA, electric utilities must purchase electric energy from QFs at purchase or
"avoided cost" rates approved by this Commission. 16 U.S.C. $ 824a-3; Idaho Power Co. v. Idaho
PUC, 155 Idaho 780,789,316 P.3d 1278, 1287 (2013). The Commission has established two
methods for calculating avoided costs, depending on the size of the QF project: ( 1) the surrogate
avoided resource (SAR) methodology, used to establish "published" avoided cost rates; and (2)
the integrated resource plan (IRP) methodology, to calculate avoided cost rates for projects
exceeding published rate limits. See Order No. 32697 at'7-8. Published rates are available for wind
and solar QFs with a design capacity of up to 100 kilowatts (kW), and for QFs of all other resource
types with a design capacity of up to 10 average megawatts (aMW). Id.; see also 18 C.F.R. $
292.304(c).
The Commission approved Idaho Power's ESA with the Sellers in 2018. Order No.
34215. Section 6.2.3 of the ESA addresses when the Sellers must notify the Company if the Sellers
wish to revise any future monthly Estimated Net Energy Amounts after the Operation Date. The
IORDER NO,34442
Sellers must notify the Company in writing by 5 PM on the last business day of the month two
months before the month to be revised.t See Case No. IPC-E-18-14, Attachment I of Application
at 15. After the ESA was executed and approved, the Sellers and the Company agreed to adjust
the notification requirements for revising future monthly Estimated Net Energy Amounts.
The proposed Amendment changes when the Sellers must notify the Company in order
to revise future monthly Estimated Net Energy Amounts. The proposed Amendment states that
"[a]fter the Operation Date, the Seller[s] must revise any future monthly Estimated Net Energy
Amounts by providing written notice no later than 5 PM Mountain Standard time on the 25'h day
of the month that is prior to the month to be revised." Application at 2-3. If the 25th day falls on a
weekend or holiday, written notice must be received by the Company no later than the last business
day before the 25th day of the month. The Amendment provides the following example: "...if the
Seller[s] would like to revise the Estimated Net Energy Amount for October, they would need to
submit a revised schedule no later than September 25 or the last business day prior the September
25." Id. at3-
STAFF COMMENTS
Staff reviewed the Application and supports approval of the Amendment. Staff noted
that the Commission has approved five-day advanced notice for projects with extensive historical
generation data. See Case Nos. IPC-E-19-01,IPC-E-19-03, IPC-E-1.9-04,IPC-E-19-07, and IPC-
E-19-12. The Box Canyon Hydro project has a long generation history; therefore, it should qualify
for five-day advanced notice.
Going a step further, Staff argued that even if a project does not have extensive
historical generation history, five-day advanced notice should still be allowed. Based on
discussions with Idaho Power representatives in June 2019, Staff discovered that Idaho Power
"relies heavily on the Risk Management Plan, which takes into account extensive data from various
sources, rather than one single adjustment number provided by a QF." Staff Comments at 3. In
light of this information, Staff believes that five-day advanced notice gives Idaho Power "more
accurate data for short-term operational planning and has minimal impacts on Idaho Power's
longer-term planning." I d.
I Example: Under the current ESA, the Sellers must notify the Company by the last day of August, 2019 if they want
to revise the Estimated Net Energy Amounts for October, 2019 or any future months.
2ORDER NO.34442
COMMISSION FINDINGS AND DISCUSSION
The Commission has jurisdiction over this matter under ldaho Code $$ 6l-502 and 61-
503. The Commission is empowered to investigate rates, charges, rules, regulations, practices,
and contracts of public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provision of law, and to fix the same by order. Idaho Code $$
6l-502 and 61-503. ln addition, the Commission has authority under PURPA and Federal Energy
Regulatory Commission ("FERC") regulations to set avoided costs, to order electric utilities to
enter into fixed-term obligations for the purchase of energy from QFs, and to implement FERC
rules. The Commission may enter any final order consistent with its authority under Title 61 and
PURPA.
The Commission has reviewed the record, including the Application, proposed
Amendment, and the comments of Staff. Based on our review, we find it reasonable to approve
Idaho Power's Amendment. In multiple cases, the Commission has allowed a five-day advanced
notification to adjust Estimated Net Energy Amounts, recognizing that adjustments made closer to
the time of delivery can improve the accuracy of input used by the Company for short-term
operational planning. See Case Nos. IPC-E-19-01, IPC-E-19-03, IPC-E-19-04,IPC-E-19-0J, and
IPC-E-19-12. The Box Canyon Hydro project has provided generation delivery data to the
Company since 1984, which further reduces the need for a revision to delivery estimates beyond
a five-day advanced notice. Therefore, the Commission finds that a five-day-ahead notification is
reasonable because historic generation delivery data is available. We approve the Amendment.
ORDER
IT IS HEREBY ORDERED that the Amendment to Idaho Power's ESA with the
Sellers-changing from a one-month advanced notice to a five-day advanced notice for adjusting
Estimated Net Energy Amounts-is approved.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within 21-days of the service date of this Order with regard to any matter decided
in this Order. Within seven days after any person has petitioned for reconsideration, any other
person may cross-petition for reconsideration. See ldaho Code * 6l-626.
ilt
JORDER NO.34442
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this / 7 #0
day of September 2019
PAUL PRESIDENT
RAPER,IONER
tllL
ERIC ANDERSON, COMMISSIONER
ATTEST
Diane M. Hanian
Commission Secretary
IllrgaNELECTRIqIPC-E- l9-2s\Orders\IPCE 1925-Final-mh.docx
4oRDER NO.34442
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