20200513Comments.pdf

STAFF COMMENTS 1 MAY 13, 2020
MATT HUNTER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10655

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 IDAHO POWER
COMPANY’S APPLICATION FOR APPROVAL
OR REJECTION OF AN ENERGY SALES
AGREEMENT WITH WHITE WATER POWER
COMPANY INC FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY FROM
THE WHITE WATER RANCH HYDRO
PROJECT
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CASE NO. IPC-E-20-13

COMMENTS OF THE
COMMISSION STAFF

The Staff of the Idaho Public Utilities Commission comments as follows on Idaho Power
Company’s Application.

BACKGROUND
On March 10, 2020, Idaho Power Company (“Idaho Power” or “Company”) filed an
Application requesting consideration of an Energy Sales Agreement (“ESA” or “Agreement”)
with White Water Power Company Inc for energy generated by the White Water Ranch Hydro
Project (“Facility”). The Facility is a qualifying facility (“QF”) under the Public Utility
Regulatory Policies Act of 1978. The Facility has a scheduled First Energy Date under the ESA
of August 1, 2020.

RECEIVED
2020 May 13PM2:11
IDAHO PUBLIC
UTILITIES COMMISSION

STAFF COMMENTS 2 MAY 13, 2020
The Facility is a 170-kilowatt1 (“kW”) nameplate capacity hydro facility near Gooding,
Idaho. The Agreement contains published non-seasonal, non-levelized avoided cost rates for a
20-year term. The Facility has been delivering energy to Idaho Power in accordance with an
energy sales agreement dated February 24, 1984, which expires July 31, 2020.

STAFF ANALYSIS
Staff recommends approval of the proposed ESA (as amended on April 3, 2020) between
Idaho Power and White Water Power Company Inc. 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 the
mid-1980s, and the Company has a long generation history for the QF. Staff believes a five-day
advanced notice is sufficient.

1 On April 3, 2020, Idaho Power moved for Commission approval of an amendment to the ESA to correct the
Facility’s nameplate capacity. The ESA filed with the Commission on March 10, 2020 stated the Facility’s
nameplate capacity as 160 kW, but White Water Power Company Inc later provided information to Idaho Power that
showed the Facility’s nameplate capacity has been 170 kW since 1988. Idaho Power and White Water Power
Company Inc executed an amendment on April 3, 2020.

STAFF COMMENTS 3 MAY 13, 2020
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.” Although the original
contract did not contain a capacity payment, Staff believes the Facility should be granted capacity
payments for the full term of the replacement contract. In addition, the size of the facility
increased during the term of the original contract; because of the timing of the change, Staff
believes the QF is eligible for capacity payments for the entire size of the facility.
Similar to the Black Canyon #3 project, the Facility in its original contract received
avoided cost rates without a capacity payment as determined in Order No. 18190, effective
September 1, 1983, because Idaho Power was at that time energy constrained, not capacity
constrained. Since about the year 2000, the Company has added significant amounts of capacity
such as Danskin (2001 and 2008), Bennett Mountain (2005), and Langley Gulch (2012) gas
plants. Because the Company went through those multiple capacity deficiency periods during the
Facility’s 35-year contract term, Staff is confident that the Facility has contributed to meeting the
Company’s need for capacity.
However, the Facility changed in size from 120 kW of nameplate capacity approved on
May 16, 1984 to 170 kW by the end of 1988, which is the Facility’s current size. Similar to
Sagebrush Hydro in Case No. IPC-E-19-38, Staff believes that if an increase in capacity occurs
after the Company has become capacity sufficient, the incremental amount should only begin
receiving capacity payments based on the capacity deficiency date determined at the time the QF
increased its capacity. Since White Water Ranch added to its capacity prior to the Company’s
deficiency period that started in about the year 2000, Staff believes that the incremental capacity
also contributed to the Company’s need for capacity and is eligible for immediate full capacity
payments.

Imperial Horsepower vs. Metric Horsepower
According to Idaho Power, several hydropower QFs use electric motors as generators
including the White Water Ranch Hydro Project. Staff met with the Company to discuss the most
appropriate method to determine the nameplate capacity when a motor is used as a generator for
new or renewal contracts moving forward. Staff and the Company agree to use the motor’s
nameplate horsepower (“HP”) rating, which can be converted to kW.

STAFF COMMENTS 4 MAY 13, 2020
Staff believes that the efficiency losses calculated into the HP rating of the motor are
approximately equal to the efficiency losses when the motor is used as a generator. Therefore, the
HP rating on the motor nameplate when converted to kW can and should be used as the generator
nameplate capacity. However, when doing the conversion, there are two versions of HP:
Imperial and metric. Staff recommends that when the Company determines the generator
nameplate capacity for a motor used as a generator, the Company should identify the proper HP
units on the motor and use 0.7457 HP per kW for converting from Imperial HP to kW and 0.7355
HP per kW for converting from metric HP to kW.

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 as amended on April 3, 2020. Staff
also recommends the Commission declare Idaho Power’s payments to White Water Power
Company Inc for the purchase of energy generated by the White Water Ranch Hydro Project
under the ESA be allowed as prudently incurred expenses for ratemaking purposes.
Staff also recommends that when the Company determines the generator nameplate
capacity for a motor used as a generator, the Company should identify the proper HP units on the
motor and use 0.7457 HP per kW for converting from Imperial HP to kW and 0.7355 HP per kW
for converting from metric HP to kW.

Respectfully submitted this 13th day of May 2020.

________________________________
Matt Hunter
Deputy Attorney General

Technical Staff: Yao Yin
Rachelle Farnsworth

i:umisc/comments/ipce20.13mhyyrf comments
CERTIFICATE OF SERVICE
CERTIFICATE OF SERVICE

I HEREBY CERTIFY THAT I HAVE THIS 13th DAY OF MAY 2020,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-20-13, BY E-MAILING A COPY THEREOF, 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]

LORETTA STANDAL
PRESIDENT
WHITE WATER POWER CO
609 RIVER ROAD
BLISS ID 83314
E-MAIL: [e-mail]

/s/ Reyna Quintero __
SECRETARY