20200331Comments.pdf

STAFF COMMENTS 1 MARCH 31, 2020
JOHN R. HAMMOND, JR.
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 5470

Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714

Attorney for the Commission Staff

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION
FOR APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT WITH
COLLEGE OF SOUTHERN IDAHO FOR
THE SALE AND PURCHASE OF ELECTRIC
ENERGY FROM THE PRISTINE SPRINGS
#1 HYDRO PROJECT
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CASE NO. IPC-E-20-04

COMMENTS OF THE
COMMISSION STAFF

The Staff of the Idaho Public Utilities Commission submits the following comments
regarding the above referenced case.

BACKGROUND
On February 4, 2020, Idaho Power Company (“Idaho Power” or "Company") applied for
approval or rejection of its Energy Sales Agreement ("ESA”) with the College of Southern Idaho
(“CSI” or “Seller”). The ESA relates to electric energy generated by the Pristine Springs #1 hydro
project (“Facility”). The Facility is a 125 kilowatt (“kW”) qualifying facility “(QF”) near Twin
Falls, Idaho under the Public Utility Regulatory Policies Act of 1978 (“PURPA”).
Under the proposed ESA, CSI would sell Facility-generated electricity to the Company at
published non-levelized, non-seasonal hydroelectric avoided cost rates, as set by Order No. 34350,
for a 20-year term. CSI has been selling Facility-generated electricity to the Company under an
RECEIVED
2020 March 31,AM10:44
IDAHO PUBLIC
UTILITIES COMMISSION
STAFF COMMENTS 2 MARCH 31, 2020
energy sales agreement executed on March 26, 2015, that expires on May 1, 2020. The proposed
ESA would replace the existing energy sales agreement.
The Company asks the Commission to accept or reject the proposed ESA. The Company
also asks the Commission to declare, if the ESA is accepted, that the Company’s energy purchases
under it will be allowed as prudently incurred expenses for ratemaking purposes.

STAFF ANALYSIS
Staff recommends approval of the proposed ESA between Idaho Power and CSI. Staff’s
justification is based upon its review of the ESA, which was focused on: 1) the 90/110 rule with at
least five-day advanced notice for adjusting Estimated Net Energy Amounts; 2) eligibility for and
the amount of capacity payments; and 3) verification of non-seasonal hydro avoided cost rates.

90/110 Rule
QFs provide a monthly estimate of the amount of energy they expect to produce. If the
QF delivers more than 110 percent of the estimated amount, energy delivered in excess of 110
percent is priced at the lesser of 85 percent of the market price or the contract price. If the QF
delivers less than 90 percent of the estimated amount, total energy delivered is priced at the lesser
of 85 percent of the market price or the contract price. Order No. 29632. Staff verified that this
provision is included in the ESA.
The ESA adopted a five-day advanced notice for adjusting Estimated Net Energy Amounts
for purposes of complying with 90/110 firmness requirements. The Commission has approved a
five-day revision to monthly generation estimates in previous cases, recognizing that Estimated Net
Energy Amounts that are closer to the time of delivery can improve the accuracy of input used by
the Company for short-term operational planning. See, e.g., Case Nos. IPC-E-19-01, IPC-E-19-03,
IPC-E-19-04, IPC-E-19-07, and IPC-E-19-12. The Facility has been generating energy since the
mid-1990s, and the Company has a long generation history for the QF. Staff believes a five-day
advanced notice is sufficient.

Capacity Payment
In Order No. 32697, the Commission stated that, “If a QF project is being paid for
capacity at the end of the contract term, and the parties are seeking renewal/extension of the
STAFF COMMENTS 3 MARCH 31, 2020
contract, the renewal/extension includes immediate payment of capacity.” Staff verified that this
Facility is being paid for capacity at the end of the original contract, and thus the proposed
avoided cost rates are allowed to include capacity payment for the full term of the replacement
contract.
In addition, the nameplate capacity size (125 kW) remains unchanged in the replacement
contract. Therefore, Staff believes the Facility should be granted capacity payment for its entire
nameplate capacity size for the full term of the replacement contract.

Verification of Non-Seasonal Hydro Avoided Cost Rates
Staff reviewed the non-seasonal hydro avoided cost rates contained in the contract and
verified that the proposed rates are correct and comply with existing orders.

STAFF RECOMMENDATIONS
Staff recommends the Commission approve the ESA. Staff also recommends the
Commission declare Idaho Power’s payments to the College of Southern Idaho for the purchase
of energy generated by the Pristine Springs #1 hydro project under the ESA be allowed as
prudently incurred expenses for ratemaking purposes.

Respectfully submitted this 31st day of March 2020.

__________________________________
John R. Hammond, Jr.
Deputy Attorney General

Technical Staff: Yao Yin

i:umisc:comments/ipce20.4jhyyrf comments
CERTIFICATE OF SERVICE
CERTIFICATE OF SERVICE

I HEREBY CERTIFY THAT I HAVE THIS 31st DAY OF MARCH 2020,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-20-04, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:

DONOVAN E WALKER
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
[e-mail]

ENERGY CONTRACTS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]

/s/ Reyna Quintero __
SECRETARY