20220211Compliance Filing.pdf

DONOVAN E. WALKER
Lead Counsel
[e-mail]
February 11, 2022
VIA ELECTRONIC MAIL
Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 West Chinden Blvd., Building 8
Suite 201-A
Boise, Idaho 83714
Re: Case No. IPC-E-21-30
MC6 Hydro LLC – MC6 Hydro Project
Idaho Power Company’s Application re the Second Amendment to the
Energy Sales Agreement
Dear Ms. Noriyuki:
Attached for electronic filing please find Idaho Power Company’s Compliance
Filing re Second Amendment in the above entitled matter. If you have any questions
about the attached documents, please do not hesitate to contact me.
Very truly yours,
Donovan E. Walker
DEW:cld
Enclosures
RECEIVED
2022 FEB 11 PM 2:12
IDAHO PUBLIC
UTILITIES COMMISSION
COMPLIANCE FILING RE: SECOND AMENDMENT - 1
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]

Attorney for Idaho Power Company

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY’S FOR
APPROVAL OR REJECTION OF THE
SECOND AMENDMENT TO THE ENERGY
SALES AGREEMENT WITH MC6 HYDRO
LLC FOR THE SALE AND PURCHASE OF
ELECTRIC ENERGY FROM THE MC6
HYDRO PROJECT.

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CASE NO. IPC-E-21-30

COMPLIANCE FILING RE:
SECOND AMENDMENT

Idaho Power Company (“Idaho Power”) hereby respectfully submits to the Idaho
Public Utilities Commission (“IPUC” or “Commission”) the accompanying edits to the
Second Amendment to the Energy Sales Agreement (“ESA”) between Idaho Power and
MC6 Hydro LLC, (”MC6” or “Seller”) under which Idaho Power purchases electric energy
generated by the MC6 Hydro project (“Facility”) located near the city of Hagermen, Idaho
(“Second Amendment”). This Second Amendment is submitted in compliance with
Commission’s Final Order on Reconsideration No. 35296, where the Commission
approved changes to the ESA to allow for limitation of the instantaneous delivery of
generation from the Facility to 2.1 MW instead of using a bifurcated rate.
Idaho Power, Seller, and IPUC Staff (“Staff”) have consulted and agreed to
modifications reflected in the Second Amendment as reasonable changes to implement
the generation delivery limitation instead of the bifurcated rate structure.
COMPLIANCE FILING RE: SECOND AMENDMENT - 2

I. INTRODUCTION AND BACKGROUND
Idaho Power and MC6 Hydro LLC (“MC6 or “Seller”) entered into an ESA on April
23, 2018, for the purchase and sale of energy produced by the Facility. The MC6 Hydro
Project (“Facility”) is a Qualifying Facility pursuant to the Public Utility Regulatory Policies
Act of 1978 (“PURPA”). The ESA was approved by the Commission in Case No. IPC-E-
18-09, Order No. 34106, on July 12, 2018. The Parties entered into an Amendment to
the ESA on June 21, 2019, to amend the Scheduled First Energy Date and Schedule
Operation date in the ESA due to the unexpecting passing away of one of the principal
developers of the project. This First Amendment to the ESA was approved by the IPUC
in Order No. 34425 issued on August 23, 2019. A replacement Appendix D was required
to add an additional year (2040) due to the change in Scheduled Operation Date.
As a result of the COVID-19 pandemic, the Facility was unable to obtain its
generator unit from the manufacturer in Wuhan, China in a timely manner causing a Force
Majeure event, which necessitated a change in the Scheduled Operation Date to April 5,
2021. The project received and installed a generator with a Nameplate Capacity of 2.3
megawatts (“MW”) that is 0.2 MW larger than the 2.1 MW generator listed in the ESA.
MC6 subsequently requested a change to the time period for making adjustments
to the Net Energy Amounts in the ESA such that the Seller can make adjustments by the
25th day of the month preceding the month for which a change is requested. The
Commission has previously approved several similar amendments to changes in the time
period for adjusting the Net Energy Amounts. On August 26, 2021, Idaho Power filed an
application with the Commission for approval or rejection of the Second Amendment to
the ESA. The Second Amendment executed by Idaho Power and MC6 provided for
changes to the ESA to allow changes to the Net Energy Amount by the 25th day of the
COMPLIANCE FILING RE: SECOND AMENDMENT - 3
month, and changes to the ESA to update the stated nameplate capacity of the generator
from 2.1 MW to 2.3 MW.
On October 27, 2021, Commission Staff ("Staff') filed its Comments. Staff
recommended approval of the provisions reflected in the Second Amendment, but also
recommended that the Commission require additional changes to the ESA. Staff
recommended inclusion of additional specific language in the ESA addressing
modification of the Facility including a termination provision. Staff also recommended
adopting two sets of avoided cost rates, based upon the updated nameplate capacity:
one rate for all generation under 2.1 MW (the original contractual rate) and an updated
avoided cost rate from the time of execution of the Second Amendment for any generation
over 2.1 MW. Staff also recommended corresponding modification to the implementation
of the 90/110 rule based on two sets of avoided cost rates.
On November 4, 2021, Idaho Power filed Reply Comments objecting to the
inclusion of the additional provisions regarding project modifications and objecting to the
recommended adoption of two sets of avoided cost rates and implementation of the
90/110 rule based on two sets of avoided cost rates, both due to the nameplate capacity
of the installed generator being 200 kW more than what the project had initially identified
in the ESA.
On December 9, 2021, the Commission issued Final Order No. 35256, approving
the Second Amendment to allow a five-day advanced notification to adjusted monthly
Estimated Net Energy Amounts and to update the nameplate capacity to reflect the
installed capacity of the generator. However, the Commission also directed,
IT IS HEREBY ORDERED that the Parties’ amended ESA
is approved with the following modifications:

1. The amended ESA will use two sets of avoided
COMPLIANCE FILING RE: SECOND AMENDMENT - 4
cost rate between the Company and Seller: any
hourly generation equal to or less than 2.1
MWhs will use the avoided cost rates contained
in the ESA and approved in Order No. 34106:
any hourly generation above 2.1 MWhs will use
the avoided cost rates from the SAR Method
approved in Order No. 35052.

2. The 90/110 Rule will be implanted based on two
sets of avoided cost rates.

The Company is directed to submit an updated or amended
Replacement ESA consistent with this Order.

Order No. 35256, p 6.
On December 30, 2021, Idaho Power filed a Petition for Reconsideration seeking
reconsideration regarding those portions of Order No. 35256 directing modifications to
the amended ESA pertaining to the use of two sets of avoided cost rates, the
implementation of the 90/110 rule, and the nameplate capacity. On January 6, 2022,
MC6 filed a Petition for Cross-Reconsideration, generally joining in Idaho Power’s
requested Reconsideration. Staff filed its Answer to Petition for Reconsideration on
January 6, 2022, in which Staff generally agreed with the Company’s proposal to limit the
amount of instantaneous delivery of generation from the Facility to 2.1 MW instead of
implementing the changes required to use a bifurcated rate structure. On January 21,
2022, the Commission issued its Final Order on Reconsideration, approving the limitation
of the instantaneous delivery of generation from the Facility to 2.1 MW instead of using a
bifurcated rate, and directing additional changes, as recommended by Staff to Appendix
B-4 and paragraph 6.2 of the ESA.
II. THE SECOND AMENDMENT
On February 7, 2022, Idaho Power and MC6 entered into a replacement Second
Amendment that incorporated the previously approved provisions from the Commission’s
COMPLIANCE FILING RE: SECOND AMENDMENT - 5
Final Order No. 35256 allowing a five-day advanced notification to adjusted monthly
Estimated Net Energy Amounts and approving an update to the nameplate capacity to
reflect the installed capacity of the generator. The replacement Second Amendment also
contains the additional required language adjustments to Appendix B, Articles B-1 and B-
4; and Articles 6.1, 7.7.1, and 7.7.2 that were necessary to implement the approved
limitation of the instantaneous delivery of generation from the Facility to 2.1 MW instead
of using a bifurcated rate. Although Order No. 35296 specifically references changes to
Appendix B-4 and paragraph 6.2, Idaho Power, Seller, and Staff consulted regarding the
proper and necessary language adjustments to the ESA required to implement the
delivery limitation and agreed upon the changes set forth in the Second Amendment as
compliant with Order No. 35296. Included as Attachment 1 hereto is the replacement
Second Amendment.
III. REQUEST FOR RELIEF
Idaho Power respectfully requests that the Commission issue an order accepting
the Second Amendment between Idaho Power and the Seller included as Attachment 1
in compliance with Order No. 35296.
Respectfully submitted this 11th day of February 2022.

DONOVAN E. WALKER
Attorney for Idaho Power Company

COMPLIANCE FILING RE: SECOND AMENDMENT - 6
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on the 30th day of December 2021 I served a true and
correct copy of the within and foregoing Compliance Filing Re: Second Amendment upon
the following named parties by the method indicated below, and addressed to the
following:

Riley Newton
Deputy Attorney General
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074

Emailed to:
[e-mail]
Ted Sorenson
MC6 Hydro LLC
711 E Turtle Point Dr.
Ivins, UT 84738

Emailed to:
[e-mail]
C. Tom Arkoosh
ARKOOSH LAW OFFICES
913 w. River Street, Suite 450
P.O. Box 2900
Boise, ID 83701

Emailed to:
[e-mail]
[e-mail]
________________________________
Christy Davenport, Legal Assistant

BEFORE THE

IDAHO PUBLIC UTILITIES COMMISSION

CASE NO. IPC-E-21-30

IDAHO POWER COMPANY

ATTACHMENT 1
Energy Sales Agreement
Project: 20190301 MC6 Hydro
Second Amendment - Page 1 of 5
SECOND AMENDMENT
TO THE
ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
MC6 HYDRO LLC
This Second Amendment of the Energy Sales Agreement (“Second Amendment”) is
entered into on this 7th day of February 2022, by and between Idaho Power Company, an Idaho
corporation (“Idaho Power”), and MC6 Hydro LLC, an Idaho limited liability company (“MC6
Hydro” or “Seller”) (individually a “Party” and collectively the “Parties”).
WITNESSETH:
(“ESA”)
(the “”) for
(“Project”)
Commission’s (“IPUC”)
the Project’s actual Operation Date did not occur until April 5, 2021;
of 2.3 megawatts (“MW”),
th th
th
Energy Sales Agreement
Project: 20190301 MC6 Hydro
Second Amendment - Page 2 of 5
1. Incorporation of Recitals. The above-stated recitals are incorporated into and made a part of
this Agreement, as amended, by this reference to the same extent as if these recitals were set forth
in full at this point.
2. Definitions. Appendix B, Article B-1 Description of Facility shall be deleted, and the following
Article B-1 shall be substituted in its stead:
B-1 DESCRIPTION OF FACILITY
2.3 MW synchronous generator, Francis turbine, .9 to 1.1 power factor
Nameplate Capacity: 2.3 MW
3. Definitions. Appendix B, Article B-4 Maximum Capacity Amount shall be deleted, and the
following B-4 shall be substituted in its stead:

B-4 MAXIMUM CAPACITY AMOUNT:
The Maximum Capacity Amount is 2.1 MW. This value is the maximum generation that
potentially could be delivered by the Seller’s Facility to the Idaho Power electrical system
at any moment in time.

4. Definitions. Article 6.1 Net Energy Purchase and Delivery shall be deleted, and the following
6-1 shall be substituted in its stead:
6.1 Net Energy Purchase and Delivery - Except when either Party's performance is excused as provided
herein, Idaho Power will purchase and Seller will sell all of the Net Energy to Idaho Power at the
Point of Delivery. All Inadvertent Energy produced by the Facility will also be delivered by the
Seller to Idaho Power at the Point of Delivery. At no time within any hour will the Seller’s Facility
generation deliveries to Idaho Power exceed the Maximum Capacity Amount specified in
Appendix B.
5. Definitions. Article 6.2.3 shall be deleted in its entirety and the following section shall be
substituted in its stead:
6.2.3 Seller’s Adjustment of Estimated Net Energy Amounts After the Operation Date - After
the Operation Date, the Seller may revise any future monthly Estimated Net Energy
Amounts 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. If the 25th day of the month
falls on a weekend or holiday, then written notice must be received on the last business
day prior to the 25th day of the month. For example, if the Seller would like to revise the
Estimated Net Energy Amount for October, they would need to submit a revised schedule
no later than September 25th or the last business day prior to September 25th.

a.) This revision must be submitted using the electronic portal provided by
Idaho Power if available. If the electronic portal is not available, then
written notice must be provided to Idaho Power by electronic notice
(electronic mail) as agreed by both Parties.

Energy Sales Agreement
Project: 20190301 MC6 Hydro
Second Amendment - Page 3 of 5
b.) If the Seller does not update the electronic portal or provide written notice
of changes to the Estimated Net Energy Amounts, then it will be deemed to
be an election of no change from the most recently provided monthly
Estimated Net Energy Amounts. Except as otherwise provided in the
Agreement, Idaho Power is unable to accept any requested changes to the
Estimated Net Energy Amounts if the date and time that Idaho Power
receives the requested change is after the deadline.

6. Definitions. Article 7.7.1 and 7.7.2 Inadvertent Energy shall be deleted, and the following 7.7.1
and 7.7.2 shall be substituted in its stead:
7.7 Inadvertent Energy –
7.7.1 Inadvertent Energy is electric energy produced by the Facility which the
Seller delivers to Idaho Power at the Point of Delivery that:
a.) exceeds ten thousand (10,000) kW multiplied by the hours in
the specific month in which the energy was delivered. (For
example, January contains 744 hours. 744 hours times 10,000 kW
= 7,440,000 kWh. Energy delivered in January in excess of
7,440,000 kWh in this example would be Inadvertent Energy.) or
b.) exceeds the Maximum Capacity Amount (in kW) in any hour.
7.7.2 Although Seller intends to design and operate the Facility to generate no
more than the Maximum Capacity Amount and no more than ten
(10) average MW monthly and therefore does not intend to generate and
deliver Inadvertent Energy, Idaho Power will accept Inadvertent Energy
but will not purchase or pay for Inadvertent Energy.
7. Commission Approval. The obligations of the Parties under this Second Amendment are
subject to the IPUC’s approval of this Second Amendment and such approval being upheld on
appeal, if any, by a court of competent jurisdiction. The Parties will submit this Second
Amendment to the IPUC and request approval or rejection in its entirety pursuant to RP 274.
Energy Sales Agreement
Project: 20190301 MC6 Hydro
Second Amendment - Page 4 of 5
8. Effect of Amendment. Except as expressly amended by this Second Amendment, the
Agreement shall remain in full force and effect.
9. Capitalized Terms. All capitalized terms used in this Second Amendment and not defined
herein shall have the same meaning as used in the Agreement.
10. Scope of Amendment. This Second Amendment shall be binding upon and inure to the
benefit of the Parties hereto, and their respective heirs, executors, administrators, successors, and
assigns, who are obligated to take any action which may be necessary or proper to carry out the
purpose and intent thereof.
11. Authority. Each Party represents and warrants that (i) it is validly existing and in good
standing in the state in which it is organized, (ii) it is the proper party to amend the Agreement,
and (iii) it has the requisite authority to execute this Second Amendment.
12. Counterparts. This Second Amendment may be executed in any number of counterparts,
each of which shall be deemed an original and all of which taken together shall constitute a single
instrument.