20200626Final_Order_No_34711.pdf

ORDER NO. 34711 1
Office of the Secretary
Service Date
June 26, 2020
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER’S
APPLICATION FOR APPROVAL OR
REJECTION OF AN ENERGY SALES
AGREEMENT WITH BRIGGS CREEK
HYDRO, INC., FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY FROM
THE BRIGGS CREEK HYDRO PROJECT
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CASE NO. IPC-E-20-22

ORDER NO. 34711

On April 21, 2020, Idaho Power Company applied for an order approving or
rejecting its Energy Sales Agreement (“ESA”) with Briggs Creek Hydro, Inc. (“Briggs Creek”)
for energy generated by the Briggs Creek Hydro project (“Facility”). The Facility is a qualifying
facility (“QF”) under the Public Utility Regulatory Policies Act of 1978. The Facility’s
scheduled First Energy Date under the ESA is October 1, 2020. Idaho Power asks the
Commission to review its Application under Modified Procedure and issue a final order before
September 30, 2020.
On May 15, 2020, the Commission issued a Notice of Application and Notice of
Modified Procedure setting public comment and Idaho Power reply comment deadlines. Staff
submitted the only comments and supported Idaho Power’s Application. Idaho Power did not
respond.
Having reviewed the record, we now approve Idaho Power’s Application as
discussed below.
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. 34711 2
THE APPLICATION
The Facility has been delivering energy to Idaho Power under a firm energy sales
agreement dated June 21, 1984 (“Initial Agreement”), which expires September 30, 2020. Idaho
Power states that the ESA contains non-seasonal, non-levelized hydro published avoided cost
rates for a 20-year term. Idaho Power requests 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 Application. In making its
recommendation, Staff focused on: (1) using the 90/110 rule with a five-day advanced notice
for adjusting Monthly Net Energy Amounts; (2) the eligibility for and amount of immediate
capacity payments; and (3) verification of non-seasonal hydro avoided cost rates.
Staff verified that the 90/110 rule was included in the ESA. Staff noted that the ESA
had adopted a five-day advance notice for adjusting the Estimated Net Energy Amounts for
purposes of 90/110 rule compliance. Staff believes the five-day advanced notice is appropriate
and recognizes the Commission has approved the same notice period in other cases while citing
that adjustments made closer to the period of delivery improve accuracy and short-term
operational planning for Idaho Power.
Staff noted Briggs Creek is not being paid for capacity payments under the Initial
Agreement. Staff believed Briggs Creek should be eligible for and paid capacity payments
during the term of the ESA. Staff noted that although the Initial Agreement does not include
capacity payments, Idaho Power became capacity constrained during the life of the Initial
Agreement.1 Staff expressed its confidence that the Facility contributed to offsetting Idaho
Power’s need for additional capacity during the Initial Agreement and should therefore be
eligible for immediate capacity payments under the ESA. Staff also noted that the total
nameplate capacity for the Facility in the ESA is less than the amount approved in the Initial
Agreement (600 Kilowatts vs. 650 Kilowatts) and believes that capacity payments for the
nameplate capacity listed in the ESA is appropriate.

1 Idaho Power has added significant amounts of capacity since the year 2001, including: Danskin (2001 and 2008), Bennett
Mountain (2005), and Langley Gulch (2012).
ORDER NO. 34711 3
Staff recommended the Commission approve the ESA and declare Idaho Power’s
payments to Briggs Creek for the purchase of energy generated under the ESA be allowed as
prudently incurred expenses for ratemaking purposes.
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. In addition, the Commission has authority under PURPA and
Federal Energy Regulatory Commission (“FERC”) regulations to set avoided costs, 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 Idaho Power’s Application, the ESA, and
Staff’s comments, the Commission finds it reasonable to approve the ESA. 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. 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 nameplate
capacity listed in the ESA for the duration of the agreement. Lastly, the Commission finds that
Idaho Power’s payments for purchases of energy and capacity under the ESA are prudently
incurred expenses for ratemaking purposes.
O R D E R
IT IS HEREBY ORDERED that Idaho Power’s ESA with Briggs Creek 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 regarding any
matter decided in this Order. Within seven (7) days after any person has petitioned for
ORDER NO. 34711 4
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 26th
day of June 2020.

PAUL KJELLANDER, PRESIDENT

KRISTINE RAPER, COMMISSIONER

ERIC ANDERSON, COMMISSIONER

ATTEST:

Diane M. Hanian
Commission Secretary

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