20200723Order_No_34727.pdf

ORDER NO. 34727 1

Office of the Secretary
Service Date
July 23, 2020
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

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
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CASE NO. IPC-E-19-38

ORDER NO. 34727

On May 28, 2020, the Commission approved, as modified by its findings, Idaho Power
Company’s (“Company”) Energy Sales Agreement (“ESA”) with Big Wood Canal Company
(“Seller”) for the Sagebrush hydro project (“Facility”). The Facility is a qualifying facility (“QF”)
under the Public Utility Regulatory Policies Act of 1978 (“PURPA”).
On June 18, 2020, the Company filed a Motion for Approval of First Amendment to
Energy Sales Agreement in Compliance with Order No. 34677 or Alternatively for Clarification
and/or Reconsideration (“Motion”). On June 25, 2020, the Commission Staff (“Staff”) filed an
Answer to the Company’s Motion. On June 30, 2020, Wood Hydro, LLC (“Wood Hydro”) filed
an Answer to Staff’s Answer.
Having reviewed the record, the Commission grants the Company’s request for
clarification as discussed in more detail in the Commission’s Findings.
FINAL ORDER NO. 34677
In Order No. 34677, the Commission approved the ESA because the ESA contained
Commission-approved terms for which the Facility is eligible. Order No. 34677 at 5. However,
the Commission only authorized the Seller to receive capacity payments for 430 kilowatts (“kW”),
the nameplate capacity under the expired agreement between Seller and the Company. Id.1 The
Commission found 430 kW already was in the Company’s load and resource balance and would
not be surplus power due to the expired agreement. Id.; see also Order No. 32697 at 21-22. Under
the new ESA, the Facility’s nameplate capacity increased to 575 kW. Id. Because the ESA was a
renewal contract the Commission found the Company should pay the Seller for capacity up to 430
kW for the full term of the renewal ESA. Id. at 5-6. See Order No. 32697 at 21-22. But the

1 The previous agreement was executed on April 1, 1985 and expired on May 31, 2020.
ORDER NO. 34727 2

Commission found the Company should not pay the Seller for the 145 kW in increased capacity.
Id. at 6. The Commission noted the Facility had increased its capacity by 145-kW at a time when
the Company is not capacity deficient. Id. The Commission analogized this “new” capacity to a
new QF whose output and pricing must be evaluated when an electric utility files an executed
energy sales agreement for review. Id. The Commission thus determined the Seller shall not
receive capacity payments for the Facility’s 145 kW increase in nameplate capacity until the
Company becomes capacity deficient in 2026. Id.
The Commission also found that the Company’s payments for purchases of energy and
capacity under the ESA, as modified by the Order, would be allowed as prudently incurred
expenses for ratemaking purposes. Id.
THE COMPANY’S MOTION
The Company represented the First Amendment would change the ESA approved in
Order No. 34667 to let the Company pay the Seller a different rate (that would exclude capacity)
for any hourly delivery of generation above 430 kW. Motion at 2. Commission Order No. 34667
did not direct the Company to make a compliance filing. The Company nevertheless claimed the
proposed Amendment was needed to comply with that Order. Id. Alternatively, if the Commission
declines to approve the First Amendment, the Company would like the Commission to clarify or
reconsider its findings in Order No. 34677. Id.
The Company represented it can obtain hourly meter data for the Facility that would
enable it to administer the ESA so each hour it can pay the Seller one rate that includes capacity
and energy for Facility-delivered generation up to 430 kW, and another rate (that excludes
capacity) for Facility-delivered generation over 430 kW. Id. at 3. The Company claimed
administering both rates required it to amend the Commission-approved ESA by providing an
additional rate schedule (Appendix H to the Amendment) and changing some language to
effectuate the two rates approved by the Commission in Order No. 34677. Id. at 3-4.
STAFF’S ANSWER
Staff asserted the Amendment contains new provisions not seen in previous QF
contracts. Staff argued it would need to review the new provisions in-depth to ensure they comply
with prior orders including Order No. 34677, and do not interfere with other required provisions
in the ESA. Staff Answer at 2. Staff also wished to determine whether the Amendment’s proposed
rate structure would make measuring compliance with 90/110 requirements difficult and whether
ORDER NO. 34727 3

the Amendment would prevent the Seller from receiving immediate capacity payments for
generation from the incremental 145 kW of capacity. Id. at 2-3.
Staff recommended that the Commission grant the alternative request in Company’s
Motion to clarify or reconsider the Order under Idaho Code § 61-626 and Commission Rules of
Procedure 325 and/or 332. Staff recommended the Commission set a schedule that would allow
for discovery and written comments to fully develop a record upon which to evaluate the
Amendment. Id. at 2-3.
WOOD HYDRO’S ANSWER
Wood Hydro disagreed with Staff’s recommendation that discovery be allowed. Wood
Hydro argued Staff already knows or should know the information it seeks. Id. at 2. Wood Hydro
alleged the four matters Staff wants to examine can be investigated without discovery and on the
record either by reading the ESA, comparing other Commission orders, or calling the Company.
Id. at 3.
COMMISSION DECISION
After reviewing the record, the Commission grants the Company’s request for
clarification pursuant to Commission Rule of Procedure 325 to consider whether the new
provisions proposed in the First Amendment to the ESA are consistent with Order No. 34677. To
engage in this review the Commission finds it prudent to allow the parties in the case to conduct
discovery and to file additional written comments on the proposed Amendment and the issues
raised by Staff in its Answer before the Commission issues a final order on clarification. The
parties or interested persons may file written comments by August 7, 2020. If the Company wishes
to reply, it must file its reply comments by August 14, 2020. After the deadline for filing reply
comments has passed the Commission will issue its final order on clarification.
ORDER
IT IS HEREBY ORDERED that the Company’s Motion for clarification is granted.
IT IS FURTHER ORDERED that the parties may conduct discovery on the proposed
Amendment and Staff’s issues as set forth above. The parties or interested persons must file any
written comments about the Amendment, or the issues raised by Staff by August 7, 2020.
IT IS FURTHER ORDERED that the Company must file any reply comments by
August 14, 2020.
ORDER NO. 34727 4

IT IS FURTHER ORDERED that the Commission will review the record after any
additional written comments are filed and issue its final order on clarification.
IT IS FURTHER ORDERED that parties should continue to comply with Order No.
34602, issued March 17, 2020. All pleadings should be filed with the Commission electronically
and shall be deemed timely filed when received by the Commission Secretary. See Rule 14.02.
Service between parties should also be accomplished electronically. Voluminous discovery-related
documents may be filed and served on CD-ROM or a USB flash drive.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 23rd
day of July 2020.

PAUL KJELLANDER, PRESIDENT

KRISTINE RAPER, COMMISSIONER

ERIC ANDERSON, COMMISSIONER

ATTEST:

Diane M. Hanian
Commission Secretary

I:\Legal\ELECTRIC\IPC-E-19-38\orders\IPCE1938_Final_clarification_jh.docx