20200605Comments.pdf

DAYN HARDIE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BARNO.9917
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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Steet Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 2OI.A
BOISE,ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. IPC.E-20.22
COMMENTS OF THE
COMI\{ISSION STAFF
STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Dayn Hardie, Deputy Attorney General, submits the following comments.
BACKGROUND
On April 2l,2020,ldaho Power Company ("Idaho Power" or'oCompany") filed an
Application requesting consideration of an Energy Sales Agreement ("ESA" or "Agreemento')
with Briggs Creek Hydro, Inc. ("Briggs Creek") for energy generated by the Briggs Creek hydro
project ("Facility"). The Facility is a qualifring facility ("QF") under the Public Utility
Regulatory Policies Act of 1978. The Facility has a Scheduled First Energy Date under the ESA
ofOctober 1,2020.
The Facility is a 600-kilowatt nameplate capacity hydro facility near Buhl, Idaho. The
ESA contains published non-seasonal, non-levelized hydro avoided cost rates for a 20-year term.
The ESA would replace an existing power sales agreement dated June 21, 1984, which expires
September 30,2020.
ISTAFF COMMENTS JUNE 5,2020
STAFF ANALYSIS
Staffrecommends approval of the proposed ESA between Idaho Power and Briggs
Creek. Staff s justification is based upon its review of the ESA, which was focused on: l) the
90/l l0 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/l l0 Rule
Qualifuing facilities provide a monthly estimate of the amount of energy they expect to
produce. If the QF delivers more than I l0 percent of the estimated amount, energy delivered in
excess of I 10 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.
Staffverified 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/l l0 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-I9-01, IPC-E-I9-03,
IPC-E-19-04, IPC-E-I9-07, and IPC-E-19-12. The Facility has been generating energy since the
mid-l980s, and the Company has a long generation history for the QF. Staffbelieves a five-day
advanced notice is sufficient.
Capacitv Payment
In Order No. 32697, the Commission stated that,"lf a QF project is being paid for
capacity at the end of the contract term, and the parties are seeking renewal/extension of the
confact, the renewaUextension 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.
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
2STAFF COMMENTS JUNE 5,2020
September l, 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, Staffis confident that the Facility has contributed to meeting
the Company's need for capacity. Staffnotes that the Facility was approved to be 650 kW in its
original contract, but the actual Facility has always been 600 kW, which has contributed to
meeting capacity need in its entirety. Therefore, Staffbelieves the current size of 600 kW should
receive immediate full capacity payment.
Verification ofNon-Seasonal Hydro Avoided Cost Rates
Staffreviewed 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
Staffrecommends the Commission approve the ESA. Staffalso recommends the
Commission declare Idaho Power's payments to Briggs Creek Hydro, Inc for the purchase of
energy generated by the Briggs Creek hydro project under the ESA be allowed as prudently
incurred expenses for ratemaking purposes.
Respectfully submitted this 5t' day of June 2020.
Dayn
Deputy Attorney General
Technical Staff: Yao Yin
Rachelle Farnsworth
i ; r,m iss/s6mments/ipce2O.22dhyyrf comments
3STAFF COMMENTS JUNE 5,2020
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 5ft DAY OF JUNE 2020,
SERVED THE FOREGOING COMMENTS OF THE COMIVISSION STAFF, IN
CASE NO. IPC-E-20.22, BY E-MAILING A COPY THEREOF, TO THE
FOLLOWING:
DONOVAN WALKER
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOrSE rD 83707-0070
E-mail: [e-mail]
dockets@ idahopower. com
ENERGY CONTRACTS
IDAHO POWER COMPAI\TY
PO BOX 70
BOISE ID 83707-0070
E-mail: [e-mail]
SCOTT KASTER
BRIGGS CREEK HYDRO INC
t429 8 4300 N
BUHL ID 83316
E-mail: [e-mail]
l/L
SECRETARY
CERTIFICATE OF SERVICE