20191107Comments.pdf

Street Address lbr Express Mail:
1 I33I W CHINDEN BLVD, BLDG 8, SUITE 20I.A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
JOHN R. HAMMOND, JR.
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-007 4
(208) 334-03s7
IDAHO BAR NO. 5470
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT WITH
SNAKE RIVER POTTERY POWER
COMPANY, INC., FOR THE SALE ANI)
PURCHASE OF ELECTRIC ENERGY FROM
THE SNAKE RIVER POTTERY HYDRO
PROJECT.
rligll[Y-7 Pl'l l: l8
CASE NO, IPC-E-19-29
COMMENTS OF THE
COMMISSION STAFF
lc
ISS
)
)
)
)
)
)
)
)
)
The Staff of the Idaho Public Utilities Commission, submits the fbllowing comments
regarding the above referenced case.
BACKGROUND
On August 27,2llg,Idaho Power Company ("ldaho Power" or "Company") filed an
Application seeking approval or rejection ofan Energy Sales Agreement ("ESA") between the
Company and Snake River Pottery Power Company, Inc. ("Snake River" or "Seller"), lbr the
Snake River Pottery Hydro Project ("Facility"). The Facility is an 86 kilowatt ("kW") qualifying
facility ("QF") near Bliss, Idaho under the Public Utility Regulatory Policies Act of 1978
("PURPA"). Application at 4.
Under the proposed ESA, Snake River would sell the electric energy generated by the
Facility to the Company at published non-seasonal, non-levelized hydroelectric avoided cost rates
STAFF COMMEN'TS NOVEMBER 7,20I9
REC EIVED
as set by Order No. 34350 for an 8-year term. 1l Snake River has been selling electricity to the
Company under a Firm Energy Sales Agreement cxecuted July 6,1984. Id. at2.
The Company requests the Commission issue an Order accepting or rejecting the proposed
ESA and, il'accepted, declaring all payments for purchases ofenergy under the proposed ESA to
be allowed as prudently incurred expenses lbr ratemaking purposes. ./d at 7.
STAFF ANALYSIS
StalTrecommends approval olthe proposed ESA between Idaho Polver and Snake River.
Staff's justification is based upon its review of the ESA, which was focused on: (l) 90/l l0 rule
with at least five-day advanced notice tbr adjusting Estimated Net Energy Amounts;r (2)
eligibility for and the amount ofcapacity payments; (3) verification ofnon-seasonal hydro status;
and (4) adherence to the capacity sizc threshold to qualily lbr published rates.
90/l l0 Rule
A QF provides a monlhly estimate of'the amount of energy they expect to produce. If the
QF delivers more than I l0 percent ofthe cstimatcd amount, energy delivered in excess of I l0
percent is priced at the lesser of85 percent ofthe markct price or the contract price. Ifthe QF
delivers less than 90 percent of the estimated an'rount, total energy delivered is priced at the lesser
of 85 pcrcent ofthe market price or the contract pricc. See Order No. 29632 at 20. The ESA
adopted at least five-day advanced notice for adjusting Estimated Net Energy Amounts for
purposes olcomplying with 90i I l0 firmness requircmcnts. Staff verilied that this provision is
included in the ESA.
e apacity Payment
ln Order No. 32697 . rhe Commission staled that, "if a QF project is being paid lbr
capacity at the end ofthe contract term and the partics arc sccking rcncrval/cxtension of thc
contract, the renewal/extension would includc imnrediate paynrent ofcapacity." OrderNo. 32697
at 21. StalTverificd that the Facility is being paid fbr capacity at thc cnd ofthe original contract
| "Estimated Net Energy Amount" is defined in Section l. t 3 of the ESA
2STAFF COMMENTS NOVEMBER 7.20I9
and thus the proposed avoided cost rates are allowed to include capacity payment lor the full term
of the replacement contract.
Non-Seasonal Hvdro Status
A "seasonal hydro" project is a hydro gencration lacility that produces at least 55% of its
annual generation during the months ofJune, July. and August. See Order No.32802at 5. Staff
verified the Facility does not generate 55% of its annual generation during the three months
according to its monthly Estimated Ne1 Energy Amounts provided, and thus it is calegorized as a
"non-seasonal hydro" project. Staff conllrmed that the ESA is based on thc avoided cost rates of
non-seasonal hydro resources.
eapacity Size'l'hrcshold
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
dcsign conditions. In other words, the maximum monthly generation that qualilies lor published
rates is capped at the total number of hours in the month multiplied by l0 MW. See Order No.
29632 at 12-14. The Facility has a 86 kW namcplate capacity and therefbre produces less than l0
aMW on a monthly basis under normal or average conditions. StafT verilled the Facility is
eligible fbr published avoided cost rates.
STAFF' RECOMMENDATIONS
Stalf recommends the Commission approve the ESA. Staff also rccommends the
Commission declare ldaho Power's payments to Snake River for the purchase ofenergy
generated by the Facility under the ESA be allowed as prudently incurred expenses for
ratemaking purposes.
3STAFF COMMENTS NOVEMBER 7,2OI9
)L--/ auvRespcctful ly submittcd this
Technical Staff: Yao Yin
Travis Culbertson
Rachelle Farnsworth
Mike Louis
i:umisc:commentripcc I 9.29jhtncr0'' ml comments
of November 201 9.
.lohn
General
4STAFF COMMENTS NOVEMBER 7, 20I9
J
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 7T'H DAY OF NOVEMBER
2019, SERVED THE FOREGOING COMMENTS OF THE COMMISSION
STAFF, IN CASE NO. IPC-E.I9-29, BY MAILING A COPY THEREOF,
POSTAGE PREPAID, TO THE FOLLOWING:
DONOVAN WALKER
REGULATORY DOCKETS
IDAHO POWERCOMPANY
PO BOX 70
BOISE ID 83707-0070
E-mail: dw idah o\\'
dockctslOidahoporver.coln
SNAKE RIVER POTTERY COMPANY INC
4580 WEST WHITE ASH DR
MERIDIAN ID 83646
ENERGY CONTRACTS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-mail: [e-mail]
'Jn t/)A,=',,r-
CERTIFICATE OF SERVICE