20211208Final_Order_No_35255.pdf

ORDER NO. 35255 1

Office of the Secretary
Service Date
December 8, 2021 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On August 26, 2021, Idaho Power Company (“Company”) applied to the Commission
requesting approval or rejection of the Fourth Amendment to its Energy Sales Agreement (“ESA”)
with Riverside Investments I, LLC (“Riverside” or “Seller”). Riverside sells energy to the
Company from the Arena Drop Hydro Project (“Facility”). The Facility is a qualifying facility
(“QF”) under the Public Utility Regulatory Policies Act of 1978 (“PURPA”).
On September 27, 2021, the Commission issued a Notice of Application and Modified
Procedure, setting public comment and Company reply deadlines. Order No. 35177. Commission
Staff filed comments and the Company filed reply comments.
Having reviewed the record, we now approve the Fourth Amendment as discussed
below.
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.
The Commission approved the Company’s ESA with the Seller on April 1, 2010, for
the purchase and sale of energy from the Facility. Order No. 31060. In 2014, the Commission
approved the Company’s First Amendment to the ESA which amended the definition of the Mid-
Columbia Market Energy Cost. See Order Nos. 33184 and 33053. In 2016, the Commission
approved both the Company’s Second Amendment to change any references in the ESA from
IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR
APPROVAL OR REJECTION OF THE
FOURTH AMENDMENT TO THE ENERGY
SALES AGREEMENT WITH RIVERSIDE
INVESTMENTS I, LLC FROM THE ARENA
DROP HYDRO PROJECT
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CASE NO. IPC-E-21-27

ORDER NO. 35255
ORDER NO. 35255 2

“Riverside Investments, LLC” to “Riverside Investments I, LLC”, Order No. 33521, and the
Company’s Third Amendment to the ESA to amend Article 6.2.3 of the ESA to include a change
to the notification of Estimated Net Energy Amounts (“NEA”) monthly adjustments from three-
month advance notice to one-month advance notice. Order No. 33573.
PROPOSED AMENDMENT
The Fourth Amendment modifies when the Seller must notify the Company of their
intent to revise future monthly Estimated NEA. Section 6.2.3 of the ESA currently grants the
Seller the option to adjust the monthly Estimated NEA within a specified time span. The Fourth
Amendment states that “[a]fter the Operation Date, the Seller may revise any future monthly
Estimated [NEA] by providing written notice no later than 5 PM Mountain Standard time on the
25th day of the month that is prior to the month to be revised.” Exhibit 1, Fourth Amendment at
2, § 6.2.3. If the 25th day falls on a weekend or holiday, the Company must receive written notice
by the last business day before the 25th day of the month. Id. at 1-2, § 6.2.3.
The Fourth Amendment provides the following example: “if the Seller would like to
revise the Estimated [NEA] for October, they would need to submit a revised schedule no later
than September 25th or the last business day prior to September 25th.” Id.
STAFF COMMENTS
Staff recommended the Commission approve the language in the Fourth Amendment
modifying the monthly notification requirements. In support of this recommendation, Staff
recognized that a five-day advanced notice can “improve the accuracy of input used for short-term
operational planning” and that similar amendments have recently been approved by the
Commission. Staff Comments at 2 (citing Order Nos. 34263, 34870, and 34937).
Staff further commented that the Company correct “non-substantive typographical
errors” in the Fourth Amendment. Id. at 2. For example, Staff pointed out that “the ‘Fourth
Amendment’ is erroneously referred to as the ‘First Amendment’ multiple times.” Id. Staff
represented that the Company replied informally via email that it planned to correct the errors via
handwritten changes to the Amendment rather than refile it. Staff recommended that the Company
update the Fourth Amendment to correct the mistakes.
Staff also recommended that the Company add a provision to its ESA to address
modifications to the Facility during the contract term (“Provision”). Id. at 3. Staff noted that the
Provision had been included in recent PURPA contracts filed by the Company. Staff recommended
ORDER NO. 35255 3

that the Commission reject the Fourth Amendment if the parties did not include the Provision in
their ESA. Id.
COMPANY REPLY COMMENTS
The Company disagreed with Staff’s recommendation to update the ESA by adding the
Provision. Reply comments at 3. The Company represented that the Seller preferred not to add the
Provision to the ESA but that “it would accept the additional provision if its objection was going
to cause a significant delay to the approval” of the Fourth Amendment. Id.
The Company stated that it believed Staff’s proposal to add the Provision exceeded the
“scope of the review and consideration of the Fourth Amendment and is inconsistent with
Commission practice regarding changes to a previously approved PURPA ESA” Id. The Company
further explained that it was not appropriate to add provisions to contracts whenever parties sought
an amendment and, especially, when such a provision is unrelated to the requested amendment.
Id. at 4.
The Company expressed its willingness to include the Provision in any new contracts
but that it objected to adding it to a previously approved ESA because of the Commission’s review
of an amendment to an unrelated provision. Id.
COMMISSION FINDINGS AND DISCUSSION
The Commission has jurisdiction over this matter under Title 61 of the Idaho Code.
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 §§
61-502, 61-503. The Commission also has authority under PURPA and Federal Energy Regulatory
Commission (“FERC”) regulations to set avoided cost rates, 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.
The Commission has reviewed the record, including the Application, proposed
Amendment, Staff’s comments, and the reply. The Commission has previously approved a five-
day advanced notification requirement to adjust monthly Estimated NEA. Based on our review,
we find it fair, just, and reasonable to approve the Company’s Fourth Amendment modifying the
advance notice required for the monthly Estimated NEA.
ORDER NO. 35255 4

The Commission further finds it reasonable to allow the Company to correct the non-
substantive typographical errors via handwritten changes to the Fourth Amendment rather than
refiling it.
We find Staff’s recommendation to require the parties to include a facility modification
provision outside the scope of this case. However, we find it to be a reasonable provision to
consider including in any new ESA or ESA renewal.
O R D E R
IT IS HEREBY ORDERED that the Fourth Amendment to the ESA changing the
deadline—from a one-month advanced notice to a five-day advanced notice—for when the Seller
must notify the Company of their intent to revise future monthly Estimated NEA is approved.
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 about 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.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 8th day
of December 2021.

PAUL KJELLANDER, PRESIDENT

KRISTINE RAPER, COMMISSIONER

ERIC ANDERSON, COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\IPC-E-21-27 Arena Drop\orders\IPCE2127_final_rn .docx