20210914Comments.pdf

DAYN HARDIE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 9917
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION F'OR
APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT BETWEEN
IDAHO POWER COMPANY AND KOOSH
INC.
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Street Address for Express Mail:
I I33I 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.2I.24
COMMENTS OF THE
COMMISSION STAF'F'
STAFF OF the Idaho Public Utilities Commission ("Staff'), by and through its Attorney
of record, Dayn Hardie, Deputy Attorney General, submits the following comments.
BACKGROUND
On July 28,202l,ldaho Power Company ("Company") filed an Application for approval
or rejection of an Energy Sales Agreement ("ESA") with Koosh Inc. ("Seller") for the energy
generated by Geo-Bon#2Hydro Project ("Facility"). The Facility is a quali$ing facility ("QF")
under the Public Utility Regulatory Policies Act of 1978.
The Facility is near Shoshone, Idaho and has a 1,05S-kilowatt nameplate capacity. The
Seller has been delivering energy from the Facility to the Company under a firm energy sales
agreement executed on March l, 1985. The 1985 energy sales agreement expires on October 31,
2021. The new ESA has a2)-year term with non-levelized, non-seasonal hydro published
avoided cost rates as set in Order No. 35052.
ISTAFF COMMENTS SEPTEMBER 14,2021
STAFF REVIEW
Staff recommends approval of the proposed ESA between the Company and the Seller.
Staff s justification is based upon its review of the ESA, includingl) 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.
Estimated Net
Staff confirmed the ESA contains the 90/110 Rule as required by Commission Order
No. 29632. The 901110 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 ,34870 and 34937 .
Capacit), Payments
In Order No. 32697, the Commission stated that, "lf 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.
Like the Black Canyon #3 project, the Seller's original contract for this Facility included
avoided cost rates without capacity payments as determined in Order No. I 8190, because the
Company was energy constrained, not capacity constrained. Since 2000, the Company has
added significant amounts of capacity to meet its capacity needs, including Danskin (2001 and
2008), Bennett Mountain (2005), and Langley Gulch (2012) gas plants. Because the Facility has
2STAFF COMMENTS SEPTEMBER 14,2O2I
operated since mid-I980s and during the capacity deficiency periods, Staff is confident that the
project has contributed to meeting the Company's need for capacity.
The original 1985 contract listed the nameplate capacity of the Facility as 1,150 kW.
However, the Facility was constructed as 1,055 kW and has been operating without modification
at 1,055 kW. Because the proposed nameplate capacity remains 1,055 kW and is smaller than
the approved 1,150 kW in the original contract, Staff believes the Facility should be granted
immediate 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
Staffrecommends 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 incurred expenses for ratemaking purposes.
Respecttully submitted this l'tL day of September 2021.
Dayn
Deputy Affomey General
Technical Staff: Yao Yin
i: umisc/comments/ipce2 l.24dhly comments
aJSTAFF COMMENTS SEPTEMBER I4,2O2I
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS I4TH DAY OF SEPTEMBER 2021,
SERVED THE FOREGOING COMMENTS OF'TIIE COMMISSION STAFF, IN CASE
NO. IPC.E-21-24, BY E.MAILING A COPY THEREOF, TO THE FOLLOWING:
DONOVAN E WALKER
IDAHO POWER COMPANY
PO BOX 70
BOrSE ID 83707-0070
E-MAIL : [e-mail]
[e-mail]
MICHAEL ARKOOSH
KOOSH INC
4I4 3RD AVE EAST
GOODING ID 83330
E-MAIL: [e-mail]
ENERGY CONTRACTS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
SECRETARY
CERTIFICATE OF SERVICE