20200421Final_Order_No_34637.pdf

ORDER NO. 34637 1

Office of the Secretary
Service Date
April 21, 2020
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On February 14, 2020, Idaho Power Company (“Idaho Power”) applied to the
Commission for an order approving or rejecting the Idaho Power’s Energy Sales Agreement
(“ESA”) with Marco Power Company for energy generated by the Marco Ranches hydro project
(“Facility”). The Facility is a 1,200-kilowatt nameplate capacity hydro facility near Jerome, Idaho,
and is a qualifying facility under the Public Utility Regulatory Policies Act of 1978. The Facility
has a scheduled First Energy Date under the ESA of August 1, 2020.
On March 11, 2020, the Commission issued a Notice of Application and Modified
Procedure, setting an April 1, 2020 comment deadline and an April 8, 2020 reply comment
deadline. Order No. 34586. Commission Staff filed the only comments and supported the
Application. Idaho Power did not file reply comments.
Having reviewed the record, we now approve Idaho Power’s Application as discussed
below.
THE APPLICATION
The Facility has been delivering energy to Idaho Power under an energy sales
agreement dated February 28, 1985, which expires August 1, 2020. Idaho Power stated that the
ESA contains published non-seasonal, non-levelized avoided cost rates for a 20-year term. Idaho
Power requested the Commission declare all payments for purchase of energy under the ESA be
allowed as prudently incurred expenses for ratemaking purposes.
STAFF COMMENTS
Staff recommended the Commission approve the ESA and declare all payments for
purchases of energy under the ESA be allowed as prudently incurred expenses. Staff’s review of
the ESA focused on the implementation of the 90/110 performance band, the eligibility for and
amount of capacity payments, and the Facility’s non-seasonal hydro avoided cost rates.
IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR
APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT WITH
MARCO POWER COMPANY FOR SALE
AND PURCHASE OF ELECTRIC ENERGY
FROM THE MARCO RANCHES HYDRO
PROJECT
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CASE NO. IPC-E-20-06

ORDER NO. 34637
ORDER NO. 34637 2

Staff verified that the non-seasonal hydro avoided cost rates contained in the contract
are correct and comply with existing orders. Staff verified the 5-Day Ahead monthly generation
forecast provision complies with the provision approved by the Commission in Case No. IPC-E-
19-01. See Order No. 34263. at 5. Staff noted the Facility has been delivering energy to Idaho
Power since the 1980s, and therefore has extensive historical production data that Idaho Power can
use for both short-term and long-term planning.
Staff noted the Facility is not receiving capacity payments under its existing contract,
but asserted the Facility should receive immediate payment for capacity based on the recent
approval of the energy sales agreement for the Black Canyon #3 hydro project in Case No. IPC-
E-19-04. See Order No. 34295 at 5. Staff believes the rationale used in Commission Order No.
34295 for the Black Canyon #3 hydro project also applies to the Facility. During the 35-year term
of Idaho Power’s existing contract with the Facility, Idaho Power has procured capacity and
included the Facility's capacity in the utility's load and resource balance. Therefore, Staff
recommended the Facility be granted capacity payments for the full term of the ESA.
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.
The Commission has reviewed the record, including the Application, the ESA, and the
comments of Staff. Based on our review, we find it reasonable to approve the ESA because it
contains Commission-approved terms that the Facility is eligible for based on its characteristics
such as fuel source, project size, generation output profile, and renewal contract status.
Additionally, the Facility has helped offset Idaho Power’s need for additional capacity
investments. The Commission thus finds it just and reasonable to include capacity payments for
the duration of the agreement. Last, the Commission finds Idaho Power’s payments for purchases
of energy and capacity under the ESA are prudently incurred expenses for ratemaking purposes.
ORDER NO. 34637 3

O R D E R
IT IS HEREBY ORDERED that Idaho Power’s ESA with Marco Power Company is
approved.
IT IS FURTHER ORDERED that all payments made by Idaho Power for purchases of
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.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 21st
day of April 2020.

PAUL KJELLANDER, PRESIDENT

KRISTINE RAPER, COMMISSIONER

ERIC ANDERSON, COMMISSIONER

ATTEST:

Diane M. Hanian
Commission Secretary

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