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 #3
HYDRO PROJECT
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CASE NO. IPC-E-20-05

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 14, 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 #3
hydro project ("Facility"). The Facility is a 200 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 energy sales agreement executed on March 26, 2015, that expires on May 1, 2020. The
proposed ESA would replace the existing energy sales agreement.
RECEIVED
2020 March 31,AM10:48
IDAHO PUBLIC
UTILITIES COMMISSION

STAFF COMMENTS 1 MARCH 31, 2020
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
Qualifying facilities 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
around 2003, 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
contract, the renewal/extension includes immediate payment of capacity.” Staff verified that CSI
is being paid for capacity at the end of the original contract, and thus the proposed avoided cost
rates are allowed to include capacity payments for the full term of the replacement contract.

STAFF COMMENTS 1 MARCH 31, 2020
In addition, the nameplate capacity size (200 kW) remains unchanged in the replacement
contract. Therefore, Staff believes CSI should be granted capacity payments 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 ESA 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 CSI for the purchase of energy generated by
the Pristine Springs #3 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/ipce20.5jhyyrf 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-20-05, 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