20200618Motion.pdf

DONOVAN E. WALKER (!SB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwa lker@ idahopower.com
Attorney for ldaho Power Company
BEFORE THE !DAHO PUBLIC UTILITIES COMMISSION
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IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT WITH BIG
WOOD CANAL COMPANY FOR THE SALE
AND PURCHASE OF ELECTRIC ENERGY
FROM THE SAGEBRUSH HYDRO
PROJECT.
CASE NO. IPC-E-19-38
MOTION FOR APPROVAL OF
FIRST AMENDMENT TO
ENERGY SALES AGREEMENT
IN COMPLIANCE WITH ORDER
NO. 34677 OR ALTERNATIVELY
FOR CLAR! FICATION AND/OR
RECONSIDERATION
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ldaho Power Company ("ldaho Power"), in accordance with RP 53, 56, 325, 331,
and the applicable provisions of the Public Utility Regulatory Policies Act of 1978
("PURPA"), hereby respectfu!!y moves the ldaho Public Utilities Commission
("Commission") for an order accepting or rejecting the First Amendment ("Amendment")
to the Energy Sales Agreement ("ESA") between ldaho Power and Big Wood Canal
Company ("Big Wood" or "Sellef') under which Big Wood se!!s and ldaho Power
purchases electric energy generated by the Sagebrush hydro project ("Facility") located
near the city of Gooding, ldaho. This First Amendment is submitted in compliance with
Commission Order No. 34677, which approved the submitted ESA in this case, but
directed that Seller be paid for capacity up to 430 kW, and the incrementa! 145 kW
increase in nameplate capacity not be eligible for capacity payments until ldaho Power
becomes capacity deficient, which is 2026.
ldaho Power and Big Wood have executed the submitted Amendment in order to
provide the required changes to the approved ESA necessary to provide for payment of
a different rate (no capacity) for any hourly delivery of generation in excess of 430 kW.
Alternatively, should the Commission desire a different compliance with its Final Order
No. 34677, the Company seeks clarification and/or reconsideration of said order for
further guidance on compliance.
ln support of this Motion, ldaho Power represents as follows:
I. INTRODUCTION AND BACKGROUND
1. Idaho Power and the Seller (ointly, "Parties") entered into an ESA on
November 22,2019, for the purchase and sale of energy produced by the Facility. The
ESA is for the purchase of generation from the 575 kW nameplate capacity Sagebrush
hydro facility. The ESA is a replacement ESA to an April 1, 1985 ESA for the facility that
ran its full term on May 31, 2020. This ESA was approved by the Commission in this
case by Order No. 34677, on May 28,2020.
2. Staff, Big Wood, and ldaho Power all filed Comments in this case. Staff
recommended approval of the ESA conditioned upon modifying the avoided cost rates in
the ESA, by treating the 145 kW increase in nameplate capacity from 430 kW (which is
the nameplate in the expired, 1985 ESA) as a new project that receives capacity
payments only after the Company become capacity deficient. Staff Comments, p 2-3.
Staff proposed a blended avoided cost rate to the Facility's 575 nameplate capacity which
used the weighted-average of two sets of rates based on the different nameplate
capacities. /d. Big Wood filed comments proposing a netting of output with a different
QF facility, and disagreeing with Staffs proposed blended rate proposa!. Wood Hydro
Comments. ldaho Power filed comments agreeing with Staffs recommendation that only
the nameplate capacity in the expiring contract be entitled to capacity payments during
the Company's current capacity deficiency period. ldaho Power Reply Comments, p 2.
3. In Order No. 34677 the Commission approved the ESA but stated, "such
approval only allows for the Seller to receive capacity payments for the previous
nameplate capacity of the Sagebrush Facility.' Order No. 34677, p 5.
The Commission finds it reasonable for the Seller to be paid
for capacity up to 430 kW for the full term of this renewal ESA.
See Order No. 32697 at21-22. They Commission also finds
thatthe 145 kW increase in capacityforthe Sagebrush Facility
e,omes at a time when the Company is not capacity deficient.
This "new" capacity is analogous to a new QF whose output
and pricing must be evaluated when an executed energy
sales agreement with an electric utility is filed with the
Commission for review. Therefore, the Commission finds that
the Seller shall not receive capacity payments for the 145 kW
increase to the nameplate capacity of the Sagebrush Facility
until the Company becomes capacity deficient.
ld., p 5-6. The Commission also rejected Big Wood's proposed netting with another QF
facility, and Staffs proposed blended rate. ld., p 6.
II. THE AMENDMENT
4. Subsequent to Commission Order No. 34677, ldaho Power verified that it
has the capability and was able to obtain hourly meter data for the Facility and administer
the contract so that on an hourly basis, it can pay one rate that contains both capacity
and energy for any generation delivered by the Facility up to 430 kW, and that it could
apply a different rate (that does not contain capacity) for any incremental generation
delivered over 430 kW. ln order to administer both rates in the approved ESA, an
Amendment was necessary to provide an additiona! rate schedule, as wel! as some
language adjustments to effectuate the two different rates approved by the Commission
in Order No. 34677.
5. The Amendment provides the additional and proper rate tables as Appendix
H, as well as the additional required language adjustments to Articles 1.8, 7.4,7.5,7.6,
and Appendices E and F, as set forth in the First Amendment to the Energy Sales
Agreement Between ldaho Power Company and Big Wood Canal Company. The
Amendment to the ESA was executed by Big Wood on June 16, 2020, and by ldaho
Power on June 17, 2020. The Amendment does not otherwise change any of the
obligations of the Parties set forth in the ESA. A copy of the Amendment is attached to
the Application as Attachment 1 and is subject to the Commissions approval.
III. PROCEDURE
6. ldaho Power believes that the First Amendment can be considered and
approved or rejected by the Commission without further procedure as a compliance filing
with the requirements of Final Order No. 34677. Alternatively, should the Commission
desire a different method of compliance than that presented by the First Amendment,
then ldaho Power seeks either Clarification and/or Reconsideration with the appropriate
process as directed by the Commission.
IV. COMMUNICATIONS AND SERVICE OF PLEADINGS
6. Communications and service of pleadings, exhibits, orders, and other
documents relating to this proceeding should be sent to the following
Donovan E. Walker
Lead Counsel
ldaho Power Company
Energy Contracts
ldaho Power Company
1221 West ldaho Street (83702)
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
dwalker@ idahooower.com
dockets@idahopower. com
P.O. Box 70
Boise, ldaho 83707
en erovco ntra cts@ id ahopower. co m
V. REQUEST FOR RELIEF
7. Idaho Power respectfully requests that the Commission issue an order
accepting or rejecting the First Amendment between ldaho Power and the Seller in
compliance with Order No. 34677.
Respectfully submitted this 18s day of June 2020.
Mzdat4-
DONOVAN E. WALKER
Aftomey for ldaho Power Company
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 18h day of June 2020 I served a true and conect
copy of the within and foregoing MOTION FOR APPROVAL OF FIRST AMENDMENT
TO ENERGY SALES AGREEMENT !N COMPLIANCE WITH ORDER NO. 34677 OR
ALTERNATIVELY FOR CLARIFICATION AND/OR RECONSIDERATION upon the
following named parties by the method indicated below, and addressed to the following:
John Hammond Jr.
Deputy Aftomey General
ldaho Public Utilities Commission
P.O. Box 83720
Boise, lD 83720-0074
emailto: iohn.ham ouc.idaho.oov
David Stephenson
Big Wood Canal Company
409 N. Apple Street
Shoshone, ldaho 83352
email to: [e-mail]
Ted Sorenson
Wood Hydro LLC
1032 Grandview Drive
lvins, UT 84738
email to: [e-mail]
C. Thomas Arkoosh
Arkoosh Law Offices
802 W. Bannock St.
Suite LP 103
P.O. Box 2900
Boise, lD 83701
email to: [e-mail]
Christy Davenport, Legal Assistant
FIRST AMENDMENT
TO THE
ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AI\D
BIG WOOD CANAL COMPANY
This First Amendment of the Energy Sales Agreement ("First Amendment") is entered into
on this 17th day of June 2020, by and between Idaho Power Company, an Idaho corporation
("Idaho Power"), and Big Wood Canal Company, a non-profit Idaho canal company ("Seller")
(individually a"Pafi" and collectively the "Parties").
WHEREAS, Idaho Power and the Seller hold an Energy Sales Agreement ("ESA") dated
November 22,2019, for the purchase and sale of generation produced by the Sagebrush Hydro
PURPA Qualifying Facility ("Facility"). The ESA contains Idaho Fublic Utilities Commission
("Commission") published avoided cost prices for a replacement ESA; and
WHEREAS, Appendix B of the ESA identifies that the Facility has increased the
Nameplate Capacity to 57 5 kilowatts ("kW"), an increase of 145 kW from the Namepl ate Capacity
previously approved by the Commission in the Party's original firm energy sales agteement that
expired May 31, 2020; and
WHEREAS, on May 28,2020, the Commission approved the ESA in Order No. 34677,
which states, "The Commission finds it reasonable for the Seller to be paid for capacity up to 430
kW for the full term of this renewal ESA. ...the Commission finds that the Seller shall not receive
capacity payments for the 145 kW increase to the nameplate capacity of the Sagebrush Facility
until the Company becomes capacity deficient"; and
WHEREAS, Seller and Idaho Power desire to amend the ESA to include the appropriate
published avoided cost appendices for pricing generation delivered by the Facility to Idaho Power
applicable to the 145 kW increase in Nameplate Capacity.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be
legally bound, the Parties hereto agree as follows:
l. Incorporation of Recitals. The above-stated recitals are incorporated into and made a part of
this ESA by this reference to the same extent as if these recitals were set forth in full at this point.
2. Article I. The following section of Article t shall be modified as written below:
1.8 "Delav Price" - The current month's Mid-Columbia Market Energy Cost minus the
current month's All Hours Energy Price specified in Appendix E-and, F and H of this
Agreement. If this calculation results in a value less than zero (0), the result of this
calculation will be zero (0).
Energy Sales Agreement
Project: 31515105 Sagebrush Hydro Project
First Amendment - Page I of 5
3. Article VII. SectionsT .4,7.5 and 7.6 of Article VII ofthe ESA shall be deleted in their entirety
and replaced with the following sections as written below:
7.4 Base Enerey Heavy Load Purchase Price - For all Base Energy received up to 430
kW during Heavy Load Hours, Idaho Power shall pay the monthly non-levelized Base
Energy Heavy Load Purchase Price as specified in Appendix E or F. For all Base Energy
received between 431 kW and 575 kW during Heavy Load Hours for calendar years 2020-
2025,Idaho Power pay the monthly non-levelized Base Energy Heavy Load Purchase Price
as specified in Appendix H. For all Base Energy received between 431 kW and 575 kW
during Heavy Load Hours for calendar years2026 through the remaining term of the ESA,
Idaho Power pay the monthly non-levelized Base Energy Heavy [,oad Purchase Price as
specified in Appendix E or F.
7.5 Base Enerey Lisht [,oad Purchase Price - For all Base Energy received up to 430
kW during Light Load Hours, Idaho Power shall pay the monthly non-levelized Base
Energy Light Load Purchase Price as specified in Appendix E or F. For all Base Energy
received between 431 kW and 575 kW during Light Load Hours for calendar years2020-
2025,Idaho Powerpay the monthly non-levelized Base Energy Light Load Purchase Price
as specified in Appendix H. For all Base Energy received between 431 kW and 575 kW
during Light Load Hours for calendar years2026 through the remaining term of the ESA,
Idaho Power pay the monthly non-levelized Base Energy Light Load Purchase Price as
specified in Appendix E or F.
7.6 All Hours Enerey Price - The price to be used in the calculation of the Surplus
Energy Price and Delay Price shall be the monthly non-levelized All Hours Energy Price
in Appendix E or F for generation received up to 430 kW, and the All Hours Energy Price
in Appendix H for generation received between 431 and 575 kW for calendar years 2020-
2025. For calendar years2026 through the remaining term of the ESA, the price to be used
in the calculation of the Surplus Energy Price and Delay Price shall be the monthly non-
levelized All Hours Energy Price in Appendix E or F.
4. Appendix E, F and H. Appendix E and Appendix F of the ESA shall be modified as written
below and the ESA shall include a new Appendix H.
APPENDIX E
SEASONAL HYDRO FACILITY ENERGY PRICES
(Prices based on the Maximum Capacity Amount of 574kW (Years 2020-2025) and 575 kW (Years
2026-remainine Term), Non-Fueled Rates)
APPENDX F
NON-SEASONAL HYDRO FACILITY ENERGY PRICES
(Prices based on the Maximum Capacity Amount of 5#943OkW (.Years 2020-2025) and 575 kW (Years
2026-remainine Term), Non-Fueled Rates)
Energy Sales Agreement
Project: 31515105 Sagebrush Hydro Project
First Amendment - Page 2 of 5
APPENDX H
SEASONAL AND NON.SEASONAL HYDRO FACILIry ENERGY PRICES
WITHOUT CAPACITY, YEARS 2O2O THROUGHaOZ'
(Prices based on the Maximum Capacity Amount of 575 kW, Non-Fueled Rates)
Base Enerey Hea{v Load Purchase Price - For all Base Energy received during Heavy Load Hours,
Idaho Power will pay the non-levelized energy price in accordance with Commission Order No.
34350 effective June l, 2019, arrd seasonalization factors applied:
H-l
H-2
Year
2020
2021
2022
2023
2024
2025
23.53
23.75
24.79
26.s2
28.66
30.77
18.18
18.40
19.44
21.17
23.31
25.42
38.42
38.78
40.47
43.30
46.80
50.23
29.68
30.04
31.73
34.56
38.06
41.50
32.02
32.31
33.72
36.08
39.00
4r.86
Season I - (73.50 %) Season 2 - (120.00 %)
Mills/kWh Mills/kWh
Season3-(100.00%)
Mills/kWh
Base Enerqy Lisht Load Purchase Price - For all Base Energy received during Light Load Hours,
Idaho Power will pay the non-levelized energy price in accordance with Commission Order No.
34350 effective June 1, 2019, and seasonalization factors applied:
Season I - (73.50 %) Season 2 - (120.00 o/o) Season 3 - (100.00 %)
Year Mills/kWh Mills/kWh Mills/kWh
2020
2021
2022
2023
2024
202s
24.74
25.03
26.44
28.80
31.72
34.58
H-3
Energy Sales Agreement
Project: 31515105 Sagebrush Hydro Project
First Amendment - Page 3 of 5
All Hours Enerey Price - The price to be used in the calculation of the Surplus Energy Price and
Delay Damage Price shall be the non-levelized energy price in accordance with Commission Order
343 50 effective June l, 20 19, and seasonalization factors applied:
Season I - (73.50 %) Season 2 - (120.00 %) Season 3 - (100.00 %)
Year MillslkWh
21.15
21.37
22.41
24.14
26.28
28.39
Mills/kWh
29.68
30.04
31.73
34.56
38.06
41.50
MillslkWh
24.74
25.03
26.44
28.80
31.72
34.s8
2020
2021
2022
2023
2024
2025
5. Commission Approval. The obligations ofthe Parties underthis First Amendment are subject
to the Commission's approval of this First Amendment and such approval being upheld on appeal,
if any, by a court of competent jurisdiction. The Parties will submit this First Amendment to the
IPUC and request approval or rejection in its entirety pursuant toRP 274.
6. Effect of Amendment. Except as expressly amended by this First Amendment, the ESA shall
remain in full force and effect.
7. Capitalized Terms. All capitalized terms used in this First Amendment and not defined herein
shall have the same meaning as used in the ESA.
8. Scope of Amendment. This First Amendment shall be binding upon and inure to the benefit
of the Parties hereto, and their respective heirs, executors, administrators, successors, and assigns,
who are obligated to take any action which may be necessary or proper to carry out the purpose
and intent thereof.
9. Authority. Each Party represents and warrants that (i) it is validly existing and in good
standing in the state in which it is organized, (ii) it is the proper party to amend the ESA, and (iii)
it has the requisite authority to execute this First Amendment.
10. Counterparts. This First Amendment may be executed in any number of counterparts, each
of which shall be deemed an original and all of which taken together shall constitute a single
instrument.
Energy Sales Agreement
Project: 31515105 Sagebrush Hydro Project
First Amendment - Page 4 of 5
IN WIINESS WHEREOF, the Parties hereto have caused this First Arnedme,nt to be duly
executed as of the darc above written.
BIG WOOD COMPAI.IY IDAHO POWER COMPAI-IY
By By:
Name: 1)^ ,.-J 3 rzDlt-*--Name:I
Title: Llrlr.-<-..1-Tifle:
Dfis:. t - f+ -tut z-i Date:
Encrry Salcr Agreemont
Project 31515105 Sagebrush Hy&o hojeot
Firgt Amc,ndment - Pagc 5 of 5
,
IN WITI.IESS WHEREOF, the Parties hereto have caused this First Amendment to be duly
exoeuted as ofthe date above written.
BIG WOOD CAI{AL COMPANY IDAHO POWER P Y
By:
Narne:Name:Ot*
Title:V f ?oaet {*t
By:
Title:
Date:
Energt Salos Agrcement
Projecfi 3 15 t5 105 Sagobrush Hydro Project
Fitst Amendment - Page 5 of 5
Pl.,It I
Date: 6