20220307Decision Memo.pdf

DECISION MEMORANDUM 1

DECISION MEMORANDUM

TO: COMMISSIONER ANDERSON
COMMISSIONER CHATBURN
COMMISSIONER HAMMOND
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: DAYN HARDIE
DEPUTY ATTORNEY GENERAL

DATE: MARCH 8, 2022

SUBJECT: IN THE MATTER OF IDAHO POWER COMPANY’S APPLICATION FOR
APPROVAL OF THE CAPACITY DEFICIENCY TO BE UTILIZED FOR
AVOIDED COST CALCULATIONS; CASE NO. IPC-E-21-09.

On April 9, 2021, Idaho Power Company (“Company”) applied for Commission
approval of its capacity deficiency period determination for avoided cost calculations under the
Public Utility Regulatory Policies Act of 1978 (“PURPA”) and Order Nos. 32697, 33084, 33159,
and 34659. The Company asked for Commission approval of the capacity deficiency period with
a first deficit occurring in August 2028.
On April 28, 2021, the Commission issued its Notice of Application and Notice of
Modified Procedure setting comment deadlines. Order No. 35023.
On June 10, 2021, the Industrial Customers of Idaho Power (“ICIP”) filed with the
Commission a document making three separate pleadings: a request to intervene, a motion to stay
the procedural schedule to provide time for discovery, and a preliminary objection to the use of
modified procedure. On June 14, 2021, Idaho Hydroelectric Power Producers Trust dba IdaHydro
(“IdaHydro”) joined the ICIP’s motion and also petitioned to intervene. The Commission granted
intervention to the ICIP and IdaHydro. See Order No. 35084.
The Commission addressed ICIP’s filing at its June 22, 2021, decision meeting. The
Commission noted that the objection to the use of modified procedure was premature. If necessary,
the motion may be renewed during the comment process if parties determine that the allowance
for discovery and opportunity for comment has been inadequate in addressing the issues. Finally,
the Commission denied ICIP’s motion to stay the procedural schedule, but found it reasonable to
DECISION MEMORANDUM 2

vacate the current comment deadlines and set new comment deadlines to allow for additional
discovery.
On June 25, 2021, the Commission issued Notice of Modified Procedural Schedule
setting new comments deadlines. See Order No. 35091.
This matter appeared on the Commission’s Decision meeting agenda on October 12,
2021 as a fully submitted matter.
On December 10, 2021, IdaHydro filed a motion for an order setting a capacity
deficiency date in summer 2023. On December 27, 2021, the Company responded to IdaHydro’s
motion requesting the Commission deny IdaHydro’s motion.
On February 4, 2022, the Company filed a motion and amended application (“Amended
Application”). On February 15, 2022, IdaHydro filed supplemental information to support its
position.
BACKGROUND
Under PURPA, the Commission has established a surrogate avoided resource (“SAR”)
method and an integrated resource plan (“IRP”) method to calculate avoided cost rates for
qualifying facilities (“QFs”). Under both methods, a QF receives capacity payments only after the
applicable capacity deficit date is reached. Order Nos. 33377, 33159, and 33898. The first deficit
date under the IRP method will float (change) to reflect the changes in the QF queue, while the
first deficit date under the SAR method will not float to reflect the changes in the QF queue. Order
No. 33933.
The capacity deficiency period is determined through the IRP planning process and is
submitted to the Commission in a proceeding separate from the IRP docket. The capacity deficit
date determined in the IRP process is presumed to be correct as a starting point but will be subject
to the outcome of the capacity deficiency case. Order No. 32697.
COMMENTS
Consistent with the comment deadlines established in Order No. 35091 the parties filed
timely comments on the Application.
IdaHydro requested the Commission set the capacity deficit date in mid-summer 2023
which it offered was congruent with the Company’s notice of intent to seek requests for proposals
to fill a projected capacity need as early as summer 2023.
DECISION MEMORANDUM 3

Staff believed the Company should update the first capacity deficit date from the
Second Amended 2019 IRP which was the basis of the Company’s Application. Staff
recommended:
• Utilize the most recent load forecast developed by the Company;

• Reduce the amount of Market Purchases from southern pathways by 310 MW and
only include 50 MW starting in 2021;

• Allow non-PURPA PPAs to expire on their actual expiration dates;

• Reflect contract changes since the preparation of the Load and Resource, which
include PURPA contract updates identified in Response to Staffs Production
Request No. 7 and approval of the Jackpot Solar contract; and

• Correct the capacity value of Valmy Unit 2 and Bridger.

Staff Comments at 10.
Staff also recommended that the Commission open a generic docket to determine the
timing of the deficiency date filing in relation to the timing of the IRP.
The Company replied to Staff and IdaHydro, acknowledging, “an apparent difference
between the first capacity deficit date that appears in the acknowledged 2019 Amended IRP (2028)
and that which is referenced in the Company’s Notice of Intent to seek requests for proposals and
the Request for Proposals itself seeking generation to meet an identified capacity deficit in 2023.”
Idaho Power Reply Comments at 2.
IDAHYDRO’S MOTION
IdaHydro’s motion asks the Commission to set the Company’s capacity deficiency date
in summer 2023. IdaHydro cited the concurrence of the Company that summer 2023 was the
correct capacity deficiency date. IdaHydro’s motion was based on the Company’s subsequent Case
No. IPC-E-21-41 filed on December 3, 2021, which seeks Commission approval to begin resource
procurements to meet a summer 2023 capacity deficit identified in the Second Amended 2019 IRP.
On February 15, 2022, IdaHydro filed a supplement to its motion—a copy of the Company
response to IdaHydro’s production request where the Company responded, “Idaho Power’s 2021
[IRP] filed on December 30, 2021, indicates a first capacity deficit in July 2023.” Second
Declaration of C. Tom Arkoosh Exhibit A. Based on this statement, IdaHydro believes this matter
DECISION MEMORANDUM 4

requires “no additional elaboration as to the appropriateness of setting the power company’s first
deficit date in the Summer of 2023.” IdaHydro Supplemental Information.
THE AMENDED APPLICATION
The Company proposes that the Commission allow it to amend its Application to seek
a first capacity deficit of July 2023, based upon the 2021 IRP and consistent with the request for
proposals issued to meet deficits starting in 2023. The Company states “the 2019 IRP was amended
twice, and the Commission’s consideration and eventual acknowledgement of the Second
Amended 2019 IRP was considerably delayed.” Amended Application at 5. Additionally, the
Company notes the 2019 IRP was the first avoided cost first deficit update since “the Commission
changed filing requirement from the time at which the IRP is filed to the time after which the IRP
is acknowledged,” which it states resulted in a delay of the Commission considering and setting
its first capacity deficit. Id.
The Company’s Amended Application includes the Load and Resource Balance Data
from the 2021 IRP which shows capacity deficits of 101 MW in July of 2023, 186 MW in July of
2024, and 311 MW in July of 2025.
The Company requests a first capacity deficit date of July 2023 for SAR and IRP
avoided cost calculation. The Company also requests that the Commission direct that future
capacity deficiency filings for avoided cost rates be made when the IRP is filed, rather than at the
time the IRP is acknowledged.
STAFF RECOMMENDATION
Staff has conducted a preliminary analysis of the proposed update to the Company’s
capacity deficit date but would like additional time to complete its analysis. Staff believes that
given the Amended Application and updated information now available, that this case should be
reopened to allow Staff and the parties time to fully analyze the Amended Application. Staff
therefore recommends this case be reopened. Staff recommends the Commission issue a Notice of
Amended Application and Amended Notice of Modified Procedure. Staff recommends
establishing an April 7, 2022 public comment deadline and an April 14, 2022 Company reply
deadline.
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DECISION MEMORANDUM 5

COMMISSION DECISION
Does the Commission wish to:
1. Accept or deny IdaHydro’s motion to set a summer 2023 capacity deficit date
without additional procedure?
2. Accept or deny the Company’s motion to accept the Amended Application and
prescribe additional procedure?
3. Reopen this case and issue a Notice of Amended Application and Amended
Notice of Modified Procedure establishing an April 7, 2022 public comment
deadline and an April 14, 2022 Company reply deadline?
4. Anything else?

Dayn Hardie
Deputy Attorney General

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