20200605Decision Memo.pdf

DECISION MEMORAI\DUM
TO COMN{IS SIONER KJELLAIIDER
COMMISSIONER RAPER
COMMIS SIONER AI\DERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:EDWARD JEWELL
DEPUTY ATTORNEY GENERAL
DATE: Jt NE 2,2020
SUBJECT IN TIIE MATTER OF IDAHO POWER'S PETITION TO DETERMINE
THE PROJECT ELIGIBILITY CAP FOR PUBLISHED AVOIDED COST
RATES AI\D THE APPROPRIATE CONTRACT LENGTH FOR ENERGY
STORAGE QUALIT"TING FACILITIES; CASE NO. IPC-E-20-02.
On January 2l,2020,Idaho Power Company ("Idaho Power" or "Company") filed a
petition with the ldaho Public Utilities Commission ("Idaho PUC") requesting the Idaho PUC
determine the appropriate project eligibility cap and contract term for energy storage qualiffing
facilities ("QF" or "QFs") under the Public Utility Regulatory Policies Act of 1978 ("PURPA").
Petition at I l.
On February 10, 2020, the Idaho PUC issued a Notice of Application and Notice of
Intervention Deadline. Order No. 34552. No parties intervened.
The Company requests the Idaho PUC determine that energy storage QFs up to a
maximum nameplate capacity of 100 kW are eligible for published avoided cost rates and a 20-
year contract while energy storage QFs over 100 kW are eligible for avoided cost rates determined
using the incremental cost Integrated Resource Plan method ("RP method") and a maximum
contract term of two years. Petition at 11.
BACKGROUND
The project eligibility cap is the project size threshold below which QFs are entitled to
published avoided cost prices. Federal Energy Regulatory Commission ("FERC") rules
implementing PURPA require states to set project eligibility caps at a minimum of 100 kilowatts
and allow states to set higher project eligibility caps. l8 C.F.R. $ 29230a@)(1),(2). Minimum
IDECISION MEMORANDUM
contract terms are not specifically established in PURPA or FERC regulations. See Order No.
33357 at 12.
ln 2017, the Company petitioned the Idaho PUC for a declaratory order determining
that five energy storage QFs, Franklin Energy Storage One - Four and Black Mesa, were subject
to the same project eligibility cap and contract term as solar QFs. In IPC-E-17-01, the Idaho PUC
determined those five energy storage QFs were subject to the 100 kW project eligibility cap and
were eligible for two-year contracts because the primary energy input to the QFs was initially to
be solar and the Idaho PUC determined the forecasted generation output profiles of the QFs were
similar to the output of solar QFs. Order No. 33785 at 11-13.
Pursuant to l6 U.S.C. $ 824a-3(hX2)(B), Franklin Energy Storage One-Four appealed
the Idaho PUC's decision to federal district court. ln Franklin Energy Storage One et al. v.
Kjellander et al., the United States District Court for the District Court of Idaho determined the
Idaho PUC violated PURPA by impermissibly classi$ing the plaintiffs' energy storage facilities
as solar QFs. The district court's decision is currently on appeal.
STAFF RECOMMENDATION
Staff notes that no parties intervened in this case. Staff believes the legal, technical,
and policy complexities of this case would benefit from additional public input. Therefore, Staff
proposes to process this case through an enhanced version of Modified Procedure designed to
solicit different viewpoints. Staff proposes to first file preliminary comments that state preliminary
Staff positions and seek public input on specific issues that may lend valuable insight regarding
the project eligibility cap and contract length. Staffwould then assess whether and to what degree
to incorporate the publicly provided information in its analysis and file a revised set of comments.
Staff recommends the Company follow the same procedure of issuing preliminary comments that
seek additional input and then filing revised comments after reviewing the public input.
Staff recommends a July 16, 2020 deadline for initial comments and requests for public
input, an August 6,2020 deadline for the public to respond to the initial comments and requests
for public input, and an August 27,2020 deadline for revised comments.
2DECISION MEMORANDI.JM
COMN{ISSION DECISION
Does the Commission wish to issue aNotice of Modified Procedure establishing a July
16,2020 deadline for initial comments and requests for public irput, an August 6, 2020 deadline
for the public to respond to the initial comments and requests for public input, and ao August 27,
2020 deadline for revised comments?
r(
Edrrard J
Deputy General
I:UTgaIELECTRIOIFGE2042UPCE2fi)2_dcc mcmo_cj.docx
3DECISION MEMORA}IDUM