20190904Comments.pdf

MATT HUNTER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10655
RECEIVED
?019 SEP -h Pll 2: I 3
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Street Address for Express Mail
472 W . WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO 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
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission comments as follows on Idaho Power
Company's Application.
BACKGROUND
On July 25,2019,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 qualiffing facility (QF). The Amendment addresses when the Sellers must notifr
Idaho Power in order to revise future monthly Estimated Net Energy Amounts.
Under PURPA, electric utilities must purchase electric energy from "qualifuing facilities"
(QF$ at purchase or "avoided cost" rates approved by this Commission. 16 U.S.C. $ 824a-3;
Idqho Power Co, v. Idaho PUC,l55 Idaho 780,789,316 P.3d 1278,1287 (2013). The
Commission has established two methods for calculating avoided costs, depending on the size of
STAFF COMMENTS SEPTEMBER 4, 2019
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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. $ 29230a@).
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 Sellers must notify Idaho Power in writing no later than 5 p.m. on the last business
day of the month two months before the month to be revised.t See Case No. IPC-E-I8-14,
Attachment I of Application at 15. After the ESA was executed and approved, the Sellers and
Idaho Power agreed to adjust the notification requirements for revising future monthly Estimated
Net Energy Amounts.
On July 3,2019,Idaho Power and the Sellers entered into an agreed Amendment to their
ESA, subject to this Commission's approval. In the Amendment, Idaho Power and the Sellers
agree to delete Section 6.2.3 of the ESA-titled "Seller's Adjustment of Estimated Net Energy
Amounts after the Operation Date"-and replace it with a new Section 6.2.3 that changes when
the Sellers must notify Idaho Power in order to revise future monthly Estimated Net Energy
Amounts. The Amendment states that "fa]fter the Operation Date, the Seller[s] must revise any
future monthly Estimated Net Energy Amounts by providing written notice no later than 5 p.m.
Mountain Standard time on the 25th day of the month that is prior to the month to be revised." If
the 25th day falls on a weekend or holiday, written notice must be received by the Company by 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."
I Example: under the current ESA, the Sellers must notifl Idaho Power by the last day of August,2019 if they want
to revise the Estimated Net Energy Amounts for October, 20'19 or any future months.
STAFF COMMENTS 2 SEPTEMBER 4,20I9
STAFF REVIEW
Staff recommends approval of the First Amendment to the Energy Sales Agreement
(ESA) between Box Canyon Hydro and Idaho Power Company. The Amendment allows the
sellers to comply with the 90/ll0 firmness requirements by providing at least five-day advanced
notice for adjusting estimated net energy amounts, instead of at least one-month advanced notice
under the current ESA. Staff supports the Amendment because ( I ) the Commission has already
approved this notification requirement for similar cases, and (2) Staff believes a one-month
advanced notice is no longer necessary, even ifaproject does not have extensive historical
generation data.
The Commission has approved a five-day advanced notice for projects with extensive
historical generation data. See Case Nos. IPC-E-19-01, IPC-E-19-03, IPC-E-19-04,
IPC-E-19-07, IPC-E-19-12. The Box Canyon Hydro project started generating energy in 1983
and has a long generation history, and therefore should be allowed to use a five-day advanced
notice based on this justification alone.
In the past, Staff has expressed its concerns over lack of one-month advanced adjustment
data and the value it can provide for month-ahead and long-term planning, especially if a project
does not have a long history.
On June 4, 2019, Staff met with Idaho Power to discuss the role of month-ahead
adjustments in month-ahead and long-term planning. Idaho Power explained that the Company
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. According to the
Company, the adjustment amount provided by the QF can be used as another source of
verification but is not the primary source of information. From this explanation, Staff believes
that month-ahead adjustment amounts play an insignificant role in the Company's month-ahead
and longer-term planning, even ifa project does not have extensive historical generation data.
Providing a five-day advanced notice gives the Company more accurate data for short-
term operational planning and has minimal impacts on Idaho Power's longer-term planning.
STAFF COMMENTS SEPTEMBER 4, 20193
STAFF RECOMMENDATIONS
Staff recommends approval of the First Amendment to allow the sellers to change from a
one-month advanced notice to a five-day advanced notice for adjusting Estimated Net Energy
Amounts.
Respectfully submitted this tlil day of September 2019.
Hunter
Deputy Attorney General
Technical Staff: Yao Yin
Rachelle Farnsworth
i : umisc/comments/ipce I 9.25mhyyrf comments
4STAFF COMMENTS SEPTEMBER 4,2019
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 4TH DAY oF SEPTEMBER
2019, SERVED THE FOREGOING COMMENTS OF THE COMMISSION
STAFF, IN CASE NO. IPC-E-19-25, BY MAILING A COPY THEREOF
POSTAGE PREPAID, TO THE FOLLOWING:
DONOVAN WALKER
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOrSE rD 83707-0070
E-mail : dwalker@idahopower. com
dockets@idahopower. com
MICHAEL DARRINGTON
ENERGY CONTRACTS LEADER
IDAHO POWER COMPANY
PO BOX 70
BOrSE ID 83707-0070
E-mail: [e-mail]
energycontracts@idahopower. com
-J- /)A-/,
CERTIFICATE OF SERVICE