20211020Reply Comments.pdf

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AN IDACORPCOMBNY
DONOVAN E. WALKER
Lead Counsel
[e-mail]
October 20,2021
VIA ELECTRONIC MAIL
Jan Noriyuki, Secretary
ldaho Public Utilities Commission
11331 West Chinden Blvd., Building 8
Suite 201-A
Boise, ldaho 83714
Re: Case No. IPC-E-21-28
Riverside lnvestments l, LLC - Fargo Drop Hydro Project
ldaho Power Company's Application re the Fourth Amendment to the
Energy Sales Agreement
Dear Ms. Noriyuki:
Attached for electronic filing is ldaho Power Company's Reply Comments in the
above entitled matter. lf you have any questions about the attached documents, please
do not hesitate to contact me.
Very truly yours,
2dat4
Donovan E. Walker
DEW:cld
Enclosures
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalker@ idahopower.com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OR REJECTION OF THE
FOURTH AMENDMENT TO THE ENERGY
SALES AGREEMENT WITH RIVERSIDE
INVESTMENTS 1, LLC FROM THE FARGO
DROP HYDRO PROJECT
CASE NO. !PC-E-21-28
REPLY COMMENTS OF
IDAHO POWER COMPANY
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ldaho Power Company ('ldaho Powef or "Company'), in response to the
comments filed by Commission Staff CStaff), hereby respectfully submits the following
Reply Comments.
I. INTRODUCTION AND BACKGROUND
On August 26, 2021, ldaho Power filed an application with the Commission for
approval or rejection of the Fourth Amendment ('Amendment') to its Energy Sales
Agreement (ESA) with Riverside lnvestments l, LLC ('Riverside' or "Sellef). Riverside
sells energy to the Company from the Fargo Drop Hydro Project ("Facility"). The Facility
is a qualifying facility under the Public Utility Regulatory Policies Act of 1978. The Fourth
Amendment that was executed by the Company and Riverside ('Parties') is to allow the
REPLY COMMENTS OF IDAHO POWER COMPANY. 1
Facility to adjust the monthly Net Energy Amount ("NEA') by the 25th of each month.
Specifically, Section 6.2.3 of the ESA provides the Seller with the option to adjust the
monthly estimated NEA within a specified time period. After the execution and approval
of the ESA, the Seller requested a change to the time period for making the NEA
adjustments, such that they can make adjustments by the 25th day of the month preceding
the month for which a change is requested. The Commission has previously approved
similar amendments to other energy sales agreements to incorporate the same change.
On Octobet 13,2021, Commission Staff ('Staff) recommended approval of the
provision reflected in the Parties' Fourth Amendment, but also recommended the
Commission require additional changes to the ESA:
Staff notes the ESA does not contain any provision addressing
modifications to the Facility during the contract term. Therefore, Staff
recommends updating the Amendment by including the following provision,
which has been included in recent PURPA contracts filed by the Company
with the Commission:
Any modifications to the Facility, including but not limited to
the generator or turbine, that (1) increases or decreases the
Facility Nameplate Capacity, or (2) changes the Qualifying
Facility Category, or (3) changes the Primary Energy Source
or (4) changes to the generator fuel and subsequently the
Fueled Rate or Non-Fueled Rate, will require a review of the
Agreement terms, conditions and pricing and ldaho Power, at
its sole determination, may adjust the pricing or terminate the
Agreement. lf the Agreement is terminated because of said
modifications, the Seller wil! be responsible for any
Termination Damages.
Staff Comments, p 3.
II. IDAHO POWER REPLY COMMENT
The Company appreciates Staffs analysis, review, and recommendation to
approve the five-day notification provision as provided in the Fourth Amendment.
However, the Company disagrees with Staffs recommendation to update the Fourth
REPLY COMMENTS OF IDAHO POWER COMPANY .2
Amendment by including an additional provision in the ESA to address modifications of
the Facility during the term of the contract. ('Staff Provision").
Idaho Power contacted Riverside about Staffs Comments and recommendation,
and inquired as to whether Riverside was in agreement to add the Staff Provision to the
Fourth Amendment. Riverside indicated that it would prefer that the Staff Provision not
be added to the Amendment, but stated it would accept the additional provision if its
objection was going to cause a significant delay to the approvalof the Fourth Amendment.
Riverside requested an amendment to the ESA so that they could adjust the
monthly NEA at any point up to the 25th day of the preceding month. ldaho Power has
received similar such requests from several other QFs, has executed the same change
reflected in this Fourth Amendment in amendments to the ESAs with other QFs, and
received approvalfrom the Commission in each case without modiffing other sections of
the ESA or updating other sections of the ESA to current "standards'. The Company
believes that Staffs recommendation to update the ESA by adding the Staff Provision
goes beyond 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.
Further, absent a particular reason to do so, it is not appropriate to open up
contracts for a de novo review and inclusion of new provisions simply because an
amendment is requested. Idaho Power has over 100 Commission approved contracts
that have been executed over the past 35 years. Many of these contracts will have
numerous provisions that have changed over the years, and that may not have been
contemplated when the ESA was originally entered agreed to by parties. The Company
does not believe it is proper to open up PURPA contracts whenever an amendment is
requested and require the parties to update other sections of the contract to the most
REPLY COMMENTS OF IDAHO POWER COMPANY.3
current language, especially when these other sections have nothing to do with the
amendment requested by the Seller.
The Company is willing to include the Staff Provision in any new contracts, and
has included such a provision in several, but ldaho Power objects to adding this Provision
to a previously approved ESA in the context of the Commission's review of a contract
amendment to an unrelated provision.
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The Company believes Staffs recommendation to add a facility modification
provision is outside the scope of this Fourth Amendment. The Fourth Amendment as
written, is consistent with past amendments to the monthly NEA which the Commission
has approved for several QFs without changes to additional provisions. ldaho Power
respectfully requests that the Commission issue an order approving the Fourth
Amendment without modification, and without inclusion of the additional Staff Provision
regarding Facility mod ifications.
Respectfully submitted this 20th day of October 2021.
fuzdat4-
DONOVAN E. WALKER
Aftorney for ldaho Power Company
REPLY COMMENTS OF IDAHO POWER COMPANY - 4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 20th day of October 2021, ! served a true and
correct copy of the within and foregoing REPLY COMMENTS OF IDAHO POWER
COMPANY upon the following named parties by the method indicated below, and
addressed to the following:
Terry Daugherty
Riverside Investments l, LLC
Riverside Hydro I, LLC
P.O. Box 328
Adrian, OR 97901
John Hammond Jr.
Deputy Aftorney General
ldaho Public Utilities Commission
P.O. Box 83720
Boise, lD 83720-0074
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Christy Davenport, Legal Assistant
REPLY COMMENTS OF IDAHO POWER COMPANY.5