HomeMy WebLinkAbout20201229Final_Order_No_34875.pdfORDER NO. 34875 1
Office of the Secretary
Service Date
December 29, 2020
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
On September 3, 2020, Idaho Power Company (“Idaho Power” or “Company”)
applied for consideration of an Energy Sales Agreement (“ESA” or “Agreement”) with Shawpatin
AgCap, LLC for energy generated by the Mud Creek White Hydro Project (“Facility”). The
Facility is a 268.6-kilowatt nameplate capacity hydro facility near Buhl, Idaho. The Facility is a
qualifying facility under the Public Utility Regulatory Policies Act of 1978 (“PURPA”). The
Facility has a scheduled First Energy Date under the ESA of January 1, 2021.
On October 2, 2020, the Commission issued a Notice of Application and Modified
Procedure, setting a November 19, 2020 comment deadline and a December 3, 2020 reply
comment deadline. Order No. 34800. Commission Staff filed the only comments, and Idaho Power
did not file reply comments.
Having reviewed the record, we approve the Company’s Application as discussed
below.
THE APPLICATION
The Facility has been delivering energy to Idaho Power in accordance with an energy
sales agreement dated April 15, 1985, which expires December 31, 2020. The Company stated
that the Agreement contains published non-seasonal, non-levelized avoided cost rates for a 20-
year term. The Company 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
IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR
APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT WITH
SHAWPATIN AGCAP, LLC, FOR THE SALE
AND PURCHASE OF ELECTRIC ENERGY
FROM THE MUD CREEK WHITE HYDRO
PROJECT
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CASE NO. IPC-E-20-34
ORDER NO. 34875
ORDER NO. 34875 2
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.
Staff verified that the non-seasonal hydro avoided cost rates contained in the ESA 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 believes that a five-day advanced notice is appropriate for
any project, regardless of the amount of project generation history.
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 the Facility’s existing contract with Idaho Power, the Company 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 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, and renewal contract status. Additionally, the Facility has helped
meet Idaho Power’s need for additional capacity. The Commission thus finds it just and reasonable
to include capacity payments for the duration of the ESA. Last, the Commission finds Idaho
ORDER NO. 34875 3
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 Shawpatin AgCap, LLC 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. 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 29th
day of December 2020.
PAUL KJELLANDER, PRESIDENT
KRISTINE RAPER, COMMISSIONER
ERIC ANDERSON, COMMISSIONER
ATTEST:
Jan Noriyuki
Commission Secretary
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