20200416Final_Order_No_34625.pdf

ORDER NO. 34625 4

Office of the Secretary
Service Date
April 16, 2020
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR
APPROVAL OR REJECTION OF ITS
ENERGY SALES AGREEMENT WITH
COLLEGE OF SOUTHERN IDAHO FOR
THE SALE AND PURCHASE OF ELECTRIC
ENERGY FROM THE PRISTINE SPRINGS
#3 HYDRO PROJECT
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CASE NO. IPC-E-20-05

ORDER NO. 34625

On February 14, 2020, Idaho Power Company (“Company”) applied for approval or
rejection of its Energy Sales Agreement (“ESA”) with the College of Southern Idaho (“CSI”) for
the Pristine Springs #3 hydro project (the “Facility”). The Facility is a qualifying facility (“QF”)
under the Public Utility Regulatory Policies Act of 1978 (“PURPA”).
On March 11, 2020, the Commission issued its Notice of Application and Notice of
Modified Procedure. Order No. 34583. The Commission Staff (“Staff”) filed the only comments
and recommended the Commission approve the Application. The Company did not reply.
Having reviewed the record, the Commission enters this Order approving the
Company’s Application.
BACKGROUND
Under PURPA, electric utilities must purchase electric energy from QFs at purchase or
"avoided cost" rates approved by the Commission. 16 U.S.C. § 824a-3; Idaho Power Co. v. Idaho
PUC, 155 Idaho 780, 789, 316 P.3d 1278, 1287 (2013). The Commission has established two
methods for calculating avoided costs, depending on the size of the QF project: (1) the surrogate
avoided resource method, used to establish "published" avoided cost rates; and (2) the integrated
resource plan method, to calculate avoided cost rates for projects exceeding published rate limits.
See Order No. 32697 at 7-22. Published rates are available for wind and solar QFs with a design
capacity of up to 100 kilowatts (“kW”), and QFs of other resource types with a design capacity of
up to 10 average megawatts (“aMW”). Id.; see also 18 C.F.R. § 292.304(c).

ORDER NO. 34625 4

THE APPLICATION
CSI’s Facility is a 200 kilowatt (“kW”) nameplate capacity hydroelectric facility near
Twin Falls, Idaho. Application at 4. The Facility delivers energy to the Company under a PURPA
energy sales agreement executed on March 26, 2015, that expires on May 1, 2020. Id. The
Company and CSI intend the proposed ESA to replace the expiring energy sales agreement. The
Company states the proposed ESA complies with Commission orders regarding this type of
agreement. Id. at 2.
In the proposed ESA, CSI has contracted for non-levelized, non-seasonal hydro
published avoided cost rates as set by the Commission in Order No. 34350 for a 20-year term. Id.
at 4. Because this is a replacement ESA, it contains capacity payments for the entire term of the
agreement. Id. at 2.
STAFF COMMENTS
Staff recommends the Commission approve the ESA. In making its recommendation,
Staff focused on: (1) the 90/110 rule with a five-day advanced notice for adjusting Estimated Net
Energy Amounts; (2) eligibility for and the amount of capacity payments; (3) verification of non-
levelized, non-seasonal hydro status; and (4) adherence to the capacity size threshold to qualify
for published rates. Staff Comments at 2.
Staff verified the ESA includes the 90/110 provision. Id. Staff also noted the ESA
adopts a five-day advance notice for adjusting Estimated Net Energy Amounts for purposes of
complying with 90/110 firmness requirements. Id. Staff also verified that CSI is being paid for
capacity at the end of the original contract, and thus the proposed avoided cost rates include
capacity payments for the full term of the replacement contract. Id. at 3.
Staff reviewed and verified the ESA’s avoided cost rates are correct. Id. Finally, Staff
verified the Facility’s 200 kW nameplate capacity produces less than 10 aMW every month under
normal or average conditions. Id. 3. Accordingly, Staff verified the Facility is eligible for
published avoided cost rates. Id.
Based on the foregoing, Staff recommended the Commission approve the ESA. Id.
Staff also recommended the Commission declare the Company’s payments to CSI under the ESA
be allowed as prudently incurred expenses for ratemaking purposes. Id.

ORDER NO. 34625 4

COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter under Idaho Code §§ 61-502 and 61-
503. The Commission is empowered to investigate rates, charges, rules, regulations, practices,
and contracts of public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provision of law, and to fix the same by order. Idaho Code §§
61-502 and 61-503. The Commission also has authority under PURPA and Federal Energy
Regulatory Commission (“FERC”) regulations to set avoided cost rates, to order electric utilities
to enter fixed-term obligations for the purchase of energy from QFs, and to implement FERC rules.
The Commission may enter any final order consistent with its authority under Title 61 and PURPA.
Having reviewed the record, including the Application, the ESA, and Staff’s comments,
the Commission finds it reasonable to approve the ESA because the ESA contains Commission-
approved terms for which the Facility is eligible based on characteristics like fuel source, project
size, generation output profile, and renewal contract status. The Commission also finds the
Company’s payments for energy and capacity under the ESA are prudently incurred expenses for
ratemaking purposes.
O R D E R
IT IS HEREBY ORDERED that the Company’s ESA with CSI is approved, effective
on the service date of this Order.
IT IS FURTHER ORDERED that the Company’s payments for energy and capacity
under the ESA are allowed as prudently incurred expenses for ratemaking purposes.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order about any matter
decided in this Order. Within seven (7) days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration. See Idaho Code § 61-626.
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ORDER NO. 34625 4

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 16th
day of April 2020.

PAUL KJELLANDER, PRESIDENT

KRISTINE RAPER, COMMISSIONER

ERIC ANDERSON, COMMISSIONER

ATTEST:

Diane M. Hanian
Commission Secretary

I:\Legal\ELECTRIC\IPC-E-20-05\Orders\IPCE2005_Final_jh.docx