20191220Final_Order_No_34510.pdf

OMce of the SecretaryServiceDate
DEC 2 0 2019
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )COMPANY'S ANNUAL COMPLIANCE )CASE NO.IPC-E-19-31
FILING UPDATING THE LOAD AND GAS )FORECASTS IN THE INCREMENTAL )COST INTEGRATED RESOURCE PLAN )ORDER NO.34510
AVOIDED COST MODEL )
On October 15,2019,Idaho Power Company ("Company")filed its annual update to
certain components of its avoided cost rate calculation for qualifying facilities ("QFs")under the
Public Utility Regulatory Policies Act of 1978 ("PURPA").Specifically,the Company updated
the load forecast,natural gas forecast,and contract information components it uses to calculate
avoided cost rates under the incremental cost IntegratedResource Plan ("IRP")method,and asked
the Commission to accept the updated information for filing.Filing at 1.
In Order No.34480 the Commission issued notice of the Company's Filing and Notice
of Modified Procedure,setting public comment deadlines and Company reply deadlines.
Commission Staff submitted comments supporting the Company's Filing.No other public
comments were received.The Company did not reply.
With this Order the Commission approves the Company's Filing.
BACKGROUND
Pursuant to PURPA and the Federal Energy Regulatory Commission's ("FERC")
implementing regulations,this Commission has approved an incremental cost IRP methodology
and a Surrogate Avoided Resource ("SAR")methodology to calculate avoided cost rates paid to
certain PURPA QFs.See Order No.32697 at 7-8.The avoided cost rate is the purchase price paid
to QFs for purchases of QF energy and capacity.18 C.F.R.§292.101(b)(6)(defining "avoided
cost").
To ensure that avoided costs most accurately reflect utilities'true avoided cost,the
Commission has directed utilities to "update fuel price forecasts and load forecasts annually-
between IRP filings,"and to update the Commission about its "long-term contract commitments
because of [their]potential effect ...on a utility's load and resource balance."See Order No.
32697 at 22.In a subsequent Order,the timing of the annual filing changed from June 1 to October
15 of each year.See Order No.32802 at 3.The Commission further directed that utilities initiate
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a case every two years,to determine the capacity deficiency period to be used in the SAR avoided
cost methodology.Id.at 23 (timing of filing changed from the time of the IRP filing to upon
acknowledgment of the IRP,in Order No.33917).
THE FILING
The Company provided its updated load forecast,natural gas forecast,and contract
information,explaining that the information was incorporated into its incremental cost IRP
avoided cost model to be used as the starting point for negotiation of its contractual avoided cost
rates as of October 15,2019.Filing at 2.The Company provided the October 2019 and October
2018 average annual load forecasts for years 2019 through 2036.Id.at 3.The updated load forecast
"shows,on average,no increase in [the Company's]customer loads when compared to the October
2018 load forecast."Id.
The Company's updated natural gas forecast is the Energy Information
Administration's Natural Gas Henry Hub Spot Price:High Oil and Gas Resource and Technology
forecast ("Henry Hub forecast"),published January 24,2019,which it used in its 2019 IRP
process.Id.at 4.The Company explained the 2019 forecast indicates "a minor decrease in the
average annual natural gas prices over the remaining period"compared to the 2018 forecast.Id.at
4.
The Company also updated its contract additions and terminations for the update
period.The Company explained that it has signed one new Oregon solar QF energy sales
agreement ("ESA")totaling 3.00 megawatts ("MW"),and nine replacement ESAs for existing
Idaho QF cogeneration and hydro projects totaling 25.44 MW.Id.at 6-7;Attachment 1.The
Company has also entered into a long-term power purchase agreement with Jackpot Holdings,
LLC for a 120 MW nameplate capacity solar project.'The Company indicates it continuously
includes new ESAs,terminated or expired contracts,and new complete ESA applications in its
avoided cost IRP model.Id.at 7.(See also Attachment 1 to Filing).
Idaho Power asked the Commission to accept its updated load forecast,natural gas
forecast,and contract information.
The Jackpot Holdings,LLC solar Application is currently under review by the Commission in Case No.IPC-E-19-14.
ORDER NO.34510 2
STAFF COMMENTS
Staff reviewed the Company's Filing,attachments,and production responses.Staff
indicated the Company's updated load and gas forecasts were reasonable.Staff Comments at 2
and 4.Staff also verified that the Company's contract information updates were accurate.Id.
Staff compared the Company's annual system load forecast in the Filing to last year's
filing in Case No.IPC-E-18-13.Id.at 2.The comparison shows that the Company's 2019 load
forecast decreased by only 0.03%,which,according to Staff,is consistent with the fact that no
significant change of economic conditions has taken place in the Company's service territory
during the past year.Id.Staff mentioned that if authorized,the small size of the updated load
forecast will have an insignificant effect on both future resource needs and avoided cost rates in
future IRP-based contracts.Id.
Staff noted that because the Company's 2019 IRP has been delayed,the Company used
the 2017 IRP as the basis for its IRP model.Id.The Company used the Henry Hub forecast in its
2017 IRP and its 2018 update,which were both approved by the Commission.Id.Staff believed it
was reasonable to use the same forecast for its 2019 update.Id.When Staff compared the 2019
update to the forecast in Case No.IPC-E-18-13,the differences over the 20 year planning horizon
ranged from (17.69%)and 2.52%.Id.at 3.Based on market conditions and long-term natural gas
forecasts predicting natural gas prices to be favorable,Staff believed the Company's forecast was
acceptable.Id.
Staff also compared the Henry Hub forecast of the Company to those used by Avista
and Rocky Mountain in their respective IRP updates and discovered each companies'forecast
followed a similar trend.Id.Althougheach company used a different methodology,the forecasts
reflect a high level of similarity,especially during the first two years.Id.Staff noted that the first
two years of the forecast period are the most important for IRP-based PURPA contracts.Id.
Based on its review,Staff recommended the Commission approve the updated load and
natural gas forecasts,and long-term contracts to be used in the IRP methodology.Id.at 2 and 4.
COMMISSION FINDINGS AND DISCUSSION
The Commission has jurisdiction over Idaho Power and the issues raised in this matter
under Title 61 of Idaho Code and PURPA.Further,the Commission has authority under PURPA
and FERC's 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.Also,the
ORDER NO.34510 3
Commission is empowered to resolve complaints between QFs and utilities and to approve QF
contracts.
Pursuant to this authority,we have reviewed and considered the record in this case,
including Idaho Power's Filing and Staff's recommendation.We find that Idaho Power's Filing
complies with the directives issued by this Commission in Order Nos.32697 and 32802.Based on
our review of the totality of the updates,we find the updated inputs to Idaho Power's IRP avoided
cost calculation are reasonable,and we accept them.
ORDER
IT IS HEREBY ORDERED that IdahoPower's annual updates to its load and gas price
forecasts and long-term contract status for purposes of its incremental cost IRP methodology are
accepted,effective as of October 15,2019.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsiderationwithin twenty-one (21)days of the service date of this Order regarding any matter
decided in this Order.Within seven (7)days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration.See Idaho Code §61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this 20
day of December 2019.
PAUL KJELLÀN E PRESIDENT
K TINE RAPER C©MMISSIONER
ERIC ANDERSON,COMMISSIONER
ATTEST:
Diane M.Hanian
Commission Secretary
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