20200317Wood Hydro LLC Supplemental Comments.pdf

C. Thomas Arkoosh, ISB No.2253
ARKOOSH LAW OFFICES
802 W. Bannock Street, Suite LP 103
P.O. Box 2900
Boise, ID 83701
Telephone: [phone]
Facsimile: [phone]
Email : [e-mail]
Adm in copy: stac ie. [e-mail]
Attomey for Ted Sorenson
IN TIIE MATTER OF THE APPLICATION
OF IDAHO POWER COMPAI\TY FOR
APPROVAL OR REJECTION OF AI\t
EI\ERGY SALES AGREEMENT WITH BIG
WOOD CANAL COMPAIYY FOR THE
SALE AI\D PURCHASE OF ELECTRIC
ENERGY FROM THE SAGEBRUSH
HYDRO PROJECT
HfiCEIVED
,I?fiHAR 17 PH 3:38
, Lrli! lnI ' ., r'i-iUilU,, (- ;i'4t'ilSSl0N
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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Case No. IPC-E-19-38
ST]PPLAMENTAL
COMMENTS
COMES NOW Ted Sorenson of Wood Hydro, LLC,by and through his counsel of
record, Tom Arkoosh of Arkoosh Law Offices, and provides Supplemental Commenrs regarding
Idaho Public Utilities Commission and Idaho Power Company Comments that have been filed in
this case.
FACTS
The Sagebrush plant had a capacity of430kW ("old capacity"), and how expanded under
the new proposed contract to 575kW ("new capacity"), for an increase of l40kW ("incremental
capacity").
The incremental capacity resulted from necessary and compulsory upgrades to
accommodate the increased cubic feet per second flowing through its sister Jim Knight plant on
the same water source.
SUPPLAMENTAL COMMENTS PAGE. I
Staff Comments point out that the incremental capacity was not contemplated in the
current Integrated Resource Plan, and thus should not receive a capacity payment. Then Staff
proposes that the incremental capacity should be "treated as a new project and receive capacity
payments only after the company becomes capacity deficient in2026."
Idaho Power Company agrees with the analysis of Staffregarding capacity treatment of
the incremental capacity.
Staffthen proposes blending the old capacity rate (which includes a capacity payment
component) and the new capacity rate (which would not receive a capacity payment component).
Idaho Power Company advises it will accept any rate set by the Commission.
ISSUE
Whether, when a Qualiffing Facility adds incremental capacity, a blended rate
adequately captures the capacity payment entitlement of the old capacity component or is even
allowed.
COMMENTS
The blended rate is less than the rate that would be paid to the old capacity deliveries if
the incremental capacity was not developed. Thus, this rate will shortchange payments that
should be made to old capacity deliveries. Proof that a blended rate shortchanges the capacity
payment entitlement of the old capacity may be made by example: Should the Sagebrush plant
deliver only 430kW (old capacity) throughout the year but not more, Sagebrush is entitled to full
capacity payment for all deliveries. but will not receive full capacity component for any of the
deliveries.
Further, all old capacity deliveries must be made before any incremental capacity will be
delivered. Thus, all capacity entitlement must be paid before any incremental deliveries are
made. A blended rate, however, contemplates allnew capacity (old capacity plus incremental
SUPPLAMENTAL COMMENTS PAGE - 2
capacity) must be made before Sagebrush receives allthe capacity payments to which it is
entitled for delivery for only old capacity.
Therefore, the proposed blended rate will not make required capacity payments on the old
capacity.
The better method will be to PaY:
Old capacity at published rates for energy and capacity.
Incremental capacity at published rates for energy until ldaho Power Company's
system becomes capacity deficient in2026.
Aside from shortchanging, the legality of setting a new and separate rate for only
Sagebrush in Modified Procedure remains questionable. IDAPA 3l .01 .01 .l2l provides for very
specific procedures and very specific content to adopt rates.
A PRACTICAL PROPOSAL
The incremental capacity at issue is l40kW. ldaho Power Company's peak delivery in
2019 was 3,242,000kW. The incremental capacity of concern is .00004318 of peak delivery, or
.004318 percent. It would serve the Commission, Commission Staff, Idaho Power Company,
and Qualif,ing Facilities if the Commission adopted a rule that the addition of incremental
capacity would not be of concem unless the addition exceeded a bright line amount of say,
lMW, or .00030845 (.030345%) of peak load. These amounts are lost in the statistical noise in
the development of the Integrated Resource Plan's estimation of Idaho Power Company's
capacity defi ciency needs.
DATED this l7s day of March2020.
ARKOOSH LAW OFFICES
C. Tom Arkoosh
Attomey for Plaintiff
SUPPLAMENTAL COMMENTS PAGE. 3
CERTIFICATE OF SERYICE
I HEREBY CERTIFY that on the 17tr day of March2020,l served a true and correct copy
of the foregoing document(s) upon the following person(s), in the manner indicated:
Donovan E. Walker
Regulatory Dockets
Idaho Power Company
P.O. Box 70
Boise,ID 83707-0070
Email: dwalkerrOidahopower.com
dockets(E idahooower.com
Energy Contracts
Idaho Power Company
P.O. Box 70
Boise, ID 83707-0070
Email : energycontracts(@ idahopower.com
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C. Tom Arkoosh
David Stephenson John R. Hammon, Jr.
Big Wood Canal Co Deputy Attorney General
409 N. Apple Street Idaho Public Utilities Commission
Shoshone,ID 83352 P.O. Box 83720
Email: [e-mail] Boise, lD 83720-007 4
Email : [e-mail]. gov
SUPPLAMENTAL COMMENTS PAGE . 4