20210225Comments.pdf

MATT HUNTER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10655
IN THE MATTER OF'IDAHO POWER
COMPANY'S APPLICATION FOR APPROVAL
OR REJECTION OF AN ENERGY SALES
AGREEMENT WITH CRYSTAL SPRINGS
HYDROELECTRIC, L.P., FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY F'ROM
THE CRYSTAL SPRINGS HYDRO PROJECT
Street Address for Express Mail:
1133I W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE,ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. IPC-E.21.0I
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission comments as follows on Idaho Power
Company's Application.
BACKGROUND
On January 22,202l,Idaho Power Company ("Idaho Power") filed an Application
requesting consideration of an Energy Sales Agreement ("ESA" or "Agreement") with Crystal
Springs Hydroelectric, L.P. ("Seller") for energy generated by the Crystal Springs Hydro Project
("Facility"). The Facility is a qualifuing facility under the Public Utility Regulatory Policies Act
of 1978. The Facility has a scheduled First Energy Date under the ESA of April 1,2021.
The Facility is a2,175-kilowatt nameplate capacity hydro facility near Buhl, Idaho. The
Agreement contains published non-seasonal, non-levelized avoided cost rates for a2U-year term.
The Facility has been delivering energy to Idaho Power in accordance with an energy
sales agreement dated March 31,1984, which expires March 31,2021.
STAFF COMMENTS FEBRUARY 25,20211
STAFF ANALYSIS
Staff recommends approval of the proposed ESA between Idaho Power and Crystal
Springs Hydroelectric, L.P. 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
avoided cost rates.
90/110 Rule and 5-Dav Advanced Notice for Adiustins Estimated Net Enerpv Amounts
Staff confirmed the ESA contains the 90lll0 Rule as required by Commission Order
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 110 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 at least five-day
advanced notice if the Seller wants to adjust its Estimated Net Energy Amounts for purposes of
complying with 90/110 firmness requirements. Five-day advanced notice has been authorized in
prior Commission orders such as Order Nos. 34263 and 34870.
Capacity Payment
In Order No. 32697, the Commission stated that, o'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
payment for the full term of the replacement contract, as was granted by the Commission to the
Black Canyon #3 project in Case No. IPC-E-19-04.
Similar to the Black Canyon #3 project, the Facility in its original contract included
avoided cost rates without a capacity payment as determined in Order No. 1 8190, 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 to meet its capacity needs, such as
Danskin (2001 and 2008), Bennett Mountain (2005), and Langley Gulch (2012) gas plants.
STAFF COMMENTS FEBRUARY 25,20212
Because the Facility has operated since 1984 and has gone through those capacity deficiency
periods, Staff is confident that the project has contributed to meeting the Company's need for
capacity.
In addition, the configuration of the Facility and the amount of generation capacity remain
unchanged in the proposed ESA.I Therefore, Staff believes the Facility should be granted
capacity payments for its entire generation capacity amount over the full term of the ESA.
Verification of Avoided Cost Rates
Staff reviewed the avoided cost rates proposed in the ESA and verified that the proposed
rates are correct.
STAFF' RE,COMMENDATIONS
Staff recommends the Commission approve the ESA. Staff also recommends the
Commission declare Idaho Power's payments to Crystal Springs Hydroelectric, L.P. for the
purchase of energy generated by the Crystal Springs Hydro Project under the ESA be allowed as
prudently incurred expenses for ratemaking purposes.
il,Respectfully submitted this ZS day of February 2021
Hunter
Deputy Attorney General
Technical Staff: Yao Yin
i:umisc/comments/ipce2l. I mhyy comments
t The Facility's nameplate capacity is2,775 kW, but maximum simultaneous capacity (when all four units are
running simultaneously) is lower than that amount because of limitations in the configuration of the Facility. This
maximum also remains approximately unchanged.
STAFF COMMENTS FEBRUARY 25,2021J
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 25TH DAY oF FEBRUARY 2021,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-2L-OI, BY E-MAILING A COPY THEREOF, TO THE FOLLOWING:
DONOVAN E IVALKER
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]
SECRETAR
CERTIFICATE OF SERVICE