20200429Final_Order_No_34650.pdf

ORDER NO. 34650 1

Office of the Secretary
Service Date
April 29, 2020
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF THE FIRST AMENDMENT
TO THE ENERGY SALES AGREEMENT
FOR THE MUD CREEK S&S HYDRO
PROJECT
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CASE NO. IPC-E-20-09

ORDER NO. 34650

On February 20, 2020, Idaho Power Company (“Company”) applied for Commission
approval of the First Amendment to its Energy Sales Agreement (“Amendment”) with H K Hydro,
LLC (“Seller”) for the energy generated by the Mud Creek S&S hydro project (the “Facility”).
The Facility is a qualifying facility (“QF”) under the Public Utility Regulatory Policies Act of
1978 (“PURPA”).
On March 13, 2020, the Commission issued its Notice of Application and Notice of
Modified Procedure. Order No. 34594. 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.
THE APPLICATION
The Facility delivers energy to the Company through a Commission-approved PURPA
energy sales agreement (“ESA”). Application at 2; see also Order No. 33692. The parties entered
into the Amendment to delete and replace the language in Section 6.2.3 of the ESA to modify the
notification requirements for Estimated Net Energy Amounts. The revised Section 6.2.3 would
allow the Seller to adjust Estimated Net Energy Amounts on five-day advance notice to the
ORDER NO. 34650 2

Company instead of the one-month advance notice required by the currently approved ESA. Id.
at 2-3.
STAFF COMMENTS
Staff recommends approval of the proposed Amendment to the ESA. Section 6.2.3 of
the existing ESA will be replaced to allow the Seller to adjust Estimated Net Energy Amounts,
which are provided to Idaho Power to comply with 90/110 firmness requirements, with five-day
advance notice, instead of a one-month advance notification in the currently approved ESA.
Staff noted 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. Staff believes a five-day notice for generation estimate adjustments is sufficient because
the Company has generation data from the Facility dating to early 1982.
Based on the foregoing, Staff recommended that the Commission approve the
Amendment, with all other terms unchanged in 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, proposed
Amendment, and the comments of Staff. Based on our review, we find it just and reasonable to
approve Idaho Power's Application and Amendment. In multiple cases, the Commission has
allowed five-day advance notification to adjust Estimated Net Energy Amounts, recognizing that
adjustments made 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 Company has Facility generation data dating
ORDER NO. 34650 3

to 1982, which further reduces the need for a revision to delivery estimates beyond a five-day
advance notice. Therefore, the Commission finds that a five-day-ahead notification is just and
reasonable.
O R D E R
IT IS HEREBY ORDERED that the Company’s Application and Amendment to its
ESA with Seller are approved, effective on the service date of this Order.
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. 34650 4

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 29th
day of April 2020.

PAUL KJELLANDER, PRESIDENT

KRISTINE RAPER, COMMISSIONER

ERIC ANDERSON, COMMISSIONER

ATTEST:

Diane M. Hanian
Commission Secretary

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