20210707Comments.pdf

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ERICK SHANER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 5214
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT WITH
ARKOOSH HYDRO INC, FOR THE SALE
AND PURCHASE OF ELECTRIC ENERGY
FROM THE LITTLE WOOD RIVER RANCH
I HYDRO PROJECT
nla a' * i L;Ji 'r. i, r..
Street Address for Express Mail:
1I33I 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-21.16
COMMENTS OF THE
COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission, by and through its attorney of record,
Erick Shaner, Deputy Attorney General, submits the following comments.
BACKGROUND
On May 18,2021, Idaho Power Company ("Company") applied for approval or rejection
of its energy sales agreement ("ESA") with Arkoosh Hydro Inc. ("Seller") for energy generated
by the Little Wood River Ranch I Hydro Project ("Facility"). The Facility is a qualifring facility
("QF") under the Public Utility Regulatory Policies Act of 1978.
The Facility is near Gooding, Idaho and has a 1,014 kilowatt nameplate capacity. The
Seller has been delivering energy from the Facility to the Company under a firm energy sales
agreement executed on June I I , 1985. The 1985 energy sales agreement expires on July 3 l,
2021. The new ESA has a2}-year term with non-levelized, non-seasonal hydro published
avoided cost rates as set in Order No. 34683.
ISTAFF COMMENTS ruLY 7 ,2021
STAFF ANALYSIS
Staff recommends approval of the proposed ESA between the Company and the Seller.
Staff s justification is based upon its review of the ESA and 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 avoided cost rates.
The 90/110 Rule and 5-Day Advanced Notice for Adjusting Estimated Net Energy Amounts
Staff confirmed the ESA contains the 90/110 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 I l0 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/l l0 firmness requirements. Five-day advanced notice has been authorized in
prior Commission orders such as Order Nos. 34263 and34870.
Capacity Payments
ln Order No. 32697, the Commission stated that, "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." The original contract
did not contain a capacity payment. However, consistent with the Black Canyon #3 project in
Case No. IPC-E-19-04, 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 included
avoided cost rates without a capacity payment as determined in Order No. I 8190, because ldaho
Power was at that time energy constrained, not capacity constrained. After 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. Because the
2STAFF COMMENTS ruLY 7,2021
Facility has operated since mid-1980s and during the 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. 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 RECOMMENDATIONS
Staff recommends the Commission approve the ESA. Staff also recommends the
Commission declare the Company's payments to Seller for the purchase of energy generated by
the Facility under the ESA be allowed as prudently incuned expenses for ratemaking purposes.
*,Respectfully submitted this -7 day of JuJy 2021
Shanerfr--Deputy Attomey General
Technical Staff: Yao Yin
i:umisc:commentVipce2l. l6esyy comments
JSTAFF COMMENTS ruLY 7,2021
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 7ft DAY OF ruLY 2021,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E.21.16, BY E-MAILING A COPY TI{EREOF, TO THE
FOLLOWING:
DONOVAN E WALKER
IDAHO POWER COMPANY
PO BOX 70
BOrSE rD 83707-0070
E-MAIL : [e-mail]
[e-mail]
BILL ARKOOSH
MITCH ARKOOSH
ARKOOSH HYDRO INC
200s HwY 26
GOODING ID 83330
E-MAIL: [e-mail]
markoosh@magiclink. com
ENERGY CONTRACTS
P.O. BOX 70
BOISE,ID 83707
E-MAIL : [e-mail]
Y
CERTIFICATE OF SERVICE