20211028Final_Order_No_35211.pdf

ORDER NO. 35211 1
Office of the Secretary
Service Date
October 28, 2021
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR
APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT
BETWEEN IDAHO POWER COMPANY
AND KOOSH INC.
)
)
)
)
)
)
CASE NO. IPC-E-21-24

ORDER NO. 35211

On July 28, 2021, Idaho Power Company (“Company”) applied for approval or
rejection of an Energy Sales Agreement (“ESA”) with Koosh Inc. (“Seller”) for the energy
generated by Geo-Bon #2 Hydro Project (“Facility”). The Facility is a qualifying facility (“QF”)
under the Public Utility Regulatory Policies Act of 1978 (“PURPA”). The Company asks for its
Application to be processed under Modified Procedure.
On August 20, 2021, the Commission issued a Notice of Application and established
deadlines for interested persons to comment on the Application and for the Company’s reply.
Order No. 35138. Staff filed the only comments.
Having reviewed the record in this case, the Commission now issues this final Order
approving the Company’s Application.
BACKGROUND
Under PURPA, electric utilities must purchase electric energy from QFs at purchase or
"avoided cost" rates approved by the Commission. 16 U.S.C. § 824a-3; Idaho Power Co. v. Idaho
PUC, 155 Idaho 780, 789, 316 P.3d 1278, 1287 (2013). The Commission has established two
methods for calculating avoided costs, depending on the size of the QF project: (1) the surrogate
avoided resource method, used to establish "published" avoided cost rates; and (2) the integrated
resource plan method, to calculate avoided cost rates for projects exceeding published rate limits.
See Order No. 32697 at 7-22.
APPLICATION
The Facility is near Shoshone, Idaho and has a 1,055-kW nameplate capacity. The
Seller has been delivering energy from the Facility to the Company under a firm energy sales
agreement executed on March 1, 1985. The 1985 agreement expires on October 31, 2021. The new
ESA has a 20-year term with non-levelized, non-seasonal hydro published avoided cost rates as
set in Order No. 35052.
ORDER NO. 35211 2
The Company requests the Commission approve the ESA and declare all payments for
the purchase of energy under the ESA be allowed as prudently incurred expenses for ratemaking
purposes. The Company also requests that the Commission set a procedural schedule that would
result in a final Commission determination on the ESA before October 31, 2021.
COMMENTS
Staff recommended the Commission approve the ESA and declare all payments for
energy under the ESA be allowed as prudently incurred expenses. Staff’s review of the ESA
focused on the 90/110 performance band with at least five days advanced notice for adjusting Net
Energy Amounts (“NEA”), the eligibility for and amount of capacity payments, and verification
of avoided cost rates.
Staff verified the ESA contains the 90/110 rule which requires a QF to provide the
Company with a monthly estimate of the amount of energy the QF expects to produce. Staff also
verified the ESA contains the five-day ahead advanced notice if the seller wants to adjust the
Estimated NEA for complying with the 90/110 firmness requirements.
Staff noted the Facility receives no capacity payments under its existing contract but
stated that it should receive immediate payment for capacity based on recent Commission orders.
Staff believed the rationale from Order No. 34295 for the Black Canyon #3 hydro project should
apply to the Facility. During the term of the Facility’s existing contract, the Company has procured
capacity giving Staff confidence that the Facility has contributed to meeting the Company’s need
for capacity during the term. Therefore, Staff recommended the Facility be granted capacity
payments for the full term of the ESA.
Staff noted that the existing contract incorrectly listed the Facility’s nameplate capacity
as 1,150-kW but that the Facility was constructed as—and has operated as—1,055-kW during the
term of the contract. Staff recommended that since the proposed nameplate capacity remains
1,055-kW—less than the original contract listed—that the Commission should grant immediate
capacity payments for its entire generation capacity.
COMMISSION DECISION AND FINDINGS
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
ORDER NO. 35211 3
§§ 61-502 and 61-503. In addition, the Commission has authority under PURPA and Federal
Energy Regulatory Commission (“FERC”) regulations to set avoided costs, 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.
Having reviewed the record, including the Company’s Application, the ESA, and
Staff’s comments, the Commission finds it reasonable to approve the ESA. The ESA contains
Commission-approved terms for which the Facility is eligible based on characteristics like fuel
source, project size, generation output profile, and renewal contract status. Additionally, the
Facility has helped offset the Company’s need for additional capacity investments. The
Commission thus finds it just and reasonable to include capacity payments for the nameplate
capacity listed in the ESA for the duration of the agreement. The Commission finds that the
Company’s payments for purchases of energy and capacity under the ESA are prudently incurred
expenses for ratemaking purposes.
The Commission appreciates Staff’s comments noting the inconsistency in the existing
contract regarding the stated versus installed nameplate capacity of the generator. The parties to
the ESA have corrected this in the ESA and we find this error that existed during the term of the
existing contract does not affect the Facility’s eligibility to receive immediate capacity payments
in this case. Therefore, the Facility is eligible for immediate capacity payments.
O R D E R
IT IS HEREBY ORDERED that the Company’s ESA with Koosh Inc. is approved,
effective November 1, 2021.
IT IS FURTHER ORDERED that all payments made by the Company 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 regarding any matter
decided in 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.

ORDER NO. 35211 4
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 28th
day of October 2021.

PAUL KJELLANDER, PRESIDENT

KRISTINE RAPER, COMMISSIONER

ERIC ANDERSON, COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\IPC-E-21-24 Koosh\orders\IPCE2124_final_dh.docx