20201228Comments.pdf

EDWARD J. JEWELL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILMMS COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10446
IN THE MATTER OF IDAHO POWER'S
APPLICATION FOR APPROVAL OR
REJECTION OF AN ENERGY SALES
AGREEMENT WITH J.M. MILLER
ENTERPRISES,INC, FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY FROM
THE SAHKO HYDRO PROJECT
CASE NO. IPC.E.2O.36
COMMENTS OF THE
COMMISSION STAFF
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Street Address for Express Mail:
IT33I W CHINDEN BLVD, BLDG 8, SUTTE 2OI-A
BOISE, D 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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The Staff of the Idaho Public Utilities Commission comments as follows on Idaho Power
Company's Application.
BACKGROUND
On October 29,202O,Idaho Power Company ("Idaho Power" or "Company") submitted
an Application for approval or rejection of an Energy Sales Agreement ("ESA") between the
Company and J.M. Miller Enterprises, Inc. for the sale and purchase of electric energy generated
by the Sahko Hydro Project. The Sahko Hydro Project is a qualifying facility ("QF") under the
Public Utility Regulatory Policies Act of 1978.
The Sahko Hydro Project is a 500 kW nameplate hydroelectric generation plant near Filer,
Idaho. The Sahko Hydro Project has been delivering energy to Idaho Power under an ESA
executed on November I,20lO, which expires on January 3l,2OZl. The replacement ESA
contains capacity payments for the entire term of the Agreement.
STAFF COMMENTS DECEMBER28,2O2O1
STAFF ANALYSIS
Staff recommends approval of the proposed ESA between Idaho Power and J.M. Miller
Enterprises, Inc. Staff s justification is based upon its review of the ESA, which was focused on:
1) 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.
90/110 Rule and 5-Day Advanced Notice for Adjusting Estimated Net Energy Amounts
Staff confirmed the ESA contains the 90/l l0 Rule as required by Commission Order No.
29632. The 90/110 Rule requires a QF to provide utilities with a monthly estimate of the amount
of energy the QF expects to produce. If the QF delivers more than 1 10 percent of the estimated
amount, then the utility must buy the excess energy for 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, then the
utility must buy total energy delivered for the lesser of 85 percent of the market price or the
contract price. See Order No. 29632 at20.
Staff also confirmed the ESA requires the Seller to give the Company five-day advanced
notice if the Seller wants to adjust its Estimated Net Energy Amounts for purposes of complying
with 90/110 firmness requirements. Staff believes this timeframe is reasonable and appropriate
and complies with Commission orders. The Commission approved five-day notice in other cases
because the Company can more accurately plan its short-term operations if the QF submits its
Estimated Net Energy Amounts closer to when the QF delivers energy to the Company. See, e.9.,
Case Nos. IPC-E-19-01, IPC-E-19-03, IPC-E-19-04,IPC-E-19-0'1, and IPC-E-19-12. These cases
involved existing QFs with ample historical generation data.
While five-day notice is appropriate, longer notice could sometimes benefit the Company.
For example, if a project were to give month-ahead notice before adjusting an estimate, then the
Company's month-ahead planning could capture that adjustment. Under a five-day timeframe,
the Company's month-ahead planning for that month would not capture that adjustment. Here,
the Company expressed, through an August 4,2020 e-mail, that the benefits of more accurate
monthly estimates in short-term operations provided by the five-day notice outweigh the need for
month-ahead adjustments of monthly estimates, even for new projects that lack historical
generation data. Staff concurs, and believes a five-day advanced notice is appropriate for all
projects.
STAFF COMMENTS DECEMBER28,2O2O2
Capacity Payment
In Order No. 32697, the Commission stated,"lf a QF project is being paid for capacity at
the end of the contract term, and the parties are seeking renewaUextension of the contract, the
renewaVextension includes immediate payment of capacity." Staff verified that the QF is being
paid for capacity under the current contract, and thus Staff believes the Facility should be granted
capacity payment for the full term of the replacement contract.
In addition, the amount of capacity remains unchanged in the replacement contract.
Therefore, Staff believes the Facility should be granted capacity payments for its entire capacity
amount over the full term of the replacement contract.
Verifi cation of Non-Seasonal Hvdro Avoided Cost Rates
Staff reviewed the non-seasonal hydro avoided cost rates contained in the Agreement and
verified that the proposed rates are correct and comply with existing orders.
STAFF RECOMMENDATIONS
Staff recommends the Commission approve the ESA. Staff also recommends the
Commission declare Idaho Power's payments for the purchase of energy generated by the Sahko
Hydro Project under the ESA be allowed as prudently incumed expenses for ratemaking pu{poses.
Respectfully submitted this }blI-auv of Decemb er 2o2o
r(
Edward J
Deputy General
Technical Staff: Yao Yin
Rachelle Farnsworth
i :umisc/commentVipce20.36ejyyrf comments
STAI]F COMMENTS 3 DECEMBER28,2O2O
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 28th DAY OF DECEMBER 2020,
SERVED THE FOREGOING COMMENTS OF THE COMIVIISSION STAFF, IN CASE
NO. IPC-E-20.36, BY E-MAILING A COPY THEREOF, TO THE FOLLOWING:
DONOVAN E WALKER
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
dockets @ idahopower.com
JAMES M. MILLER
J.M. ENTERPRISES,INC
2392FULLER CT
ANN ARBOR MI48IO5
E-MAIL: j im @ millerengineering.com
ENERGY CONTRACTS
IDAHO POWER COMPANY
PO BOX 70
BOrSE rD 83707-0070
E-MAIL: energvcontracts @idahopower.com
ARY
CERTIFICATE OF SERVICE