20211123Comments.pdf

RILEY NEWTON
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-007 4
[phone]
IDAHO BAR NO. II2O2
IN THE MATTER OF IDAIIO POWER )coMPArtY's APPLTCATTON FOR APPROVAL )
OR REIECTION OF AI\ EI\TERGY SALES )
AGREEMENT WrTH IDAHO POWER )
COMPAI\TY AI{D J.R. SIMPLOT COMPAITY )
FOR TIIE SALE AI\[D PT]RCHASE OF )
ELECTRIC EI\IERGY FROM THE SIMPLOI - )POCATELLOCSPPPROJECT )
iirt il vFJ
rii:iii*H 23 PH 2:32
:.. i.a- -' -"r.l.l:L,.''" ,,'t'-',t:,l,3Jrcli
Street Address for Express Mail:
I I33I W CHINDEN BLVD, BLDG 8, SUITE 2OI-A
BOISE,ID 83714
Attorney forthe Commission Staff
BETORE THE IDAHO PUBLIC UTILMIES COMMISSION
CASE NO. IPC-F-2I-33
COMMENTS OF THE
COMMISSION STAFF
STAFF OF the Idaho Fublic Utilities Commission, by and through its Attomey of
recod Riley Newton, Deputy Attorney General, submits the following comments.
BACKGROTJI{D
On October 6,202l,Idaho Power Company ('Company') applied for approval or
rejection of an energy sales agreement (*ESA") with J.R Simplot Company ("Seller") for the
energy generated by the Simplot - Pocatello CSPP project (*Facility"). The Company states the
ESA "is a new contract with the same Qualifring Facilrty (*QF")" under the Public Utility
Regul*ory Policies Act of 1978.
The Facility is near Pocatello,Idatro and has a 15.9 megawatt ('M\lr') narrreplate
capacity. The Seller has been delivering erergy from the Facility to the Company under an ESA
executed on December 21,2018- The 2018 ESA expires on February 28,2022. The new ESA
ISTAFF COMMENTS NOVEMBER23,2O2I
has a 3-year term using the non-levelized, other published avoided cost rates established in Order
No. 35052, for replacement contacts and for energy deliveries of less than l0 average MW.
STAXT'REVIEW
Staffrecommends the Commission approve the proposed ESA between the Company and
the Seller, if the parties include a provision that addresses potential future modifications to the
Facility. Staffs justification is based upon its review of the ESA, including: l) the 90/l l0 rule
with at least five{ay advanced notice for adjusting Estimated Net Energy Amounts; 2) eligibility
for and the amount of capacity payments; 3) verification of avoided cost rates; and 4) the lack of
any provision addressing potential futtue modifications to the Facility.
The 90/l l0 Rule and 5-Day Advanced Notice for Adjusting Estimated Net Enerqy Amounts
Staffconfirmed the ESA contains the 90/l l0 Rule as required by Commission Order
No. 29632. The 90/l l0 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 I l0 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
amoun! then the utility must buy total enerry delivered for the lesser of 85 percent of the market
price or the contract price. See Order No. 29632 a120.
Staffalso confirmed the ESA requires the Seller to give the Company at least fiveday
advanced notice if the Seller wants to adjust its Estimated Net Energy Amounts for purposes of
complying with 90/ll0 firmness requirements. This mechanism has been authorized by the
Commission in Order N os. 34263, 3 487 A and 34937 .
Capacity Pavmeng
In Order No .32697, the Commission stated that "[i]f a QF project is being paid for
capacity at the end of the conmct term, and the parties are seeking renewaUextension of the
contract the renewaUextension includes immediate payment of capacity." The Facility is
currently operating under a contract approved h Case No. IPC-E-I9-01 which contains capacity
payments. ln addition, no modifications have been made to the Facility during the terrr of the
2STAFF COMMENTS NOVEI\,IBER23,2O2I
crurent contract. Therefore, Staffbelieves the Facility should be granted immediate capacity
payments for the full tenn of the ESA.
Verification of Avoided Cost Rates
Staffreviewed the avoided cost rales proposed in the ESA and verified that the proposed
rates reflect the rate authorized in Order No. 35052 and in effect when the ESA was executed.
Lack of a Provision that Addresses Modifications to the Facilitv
Staffnotes that the new ESA does not contain any provision to address modifications to
the Facility during the contract terrr. Therefore, Staffrecommends including the following
provision, which has been included in recent PURPA contacts filed by the Company:
Any modifications to the Facility, including but not limited to the generator
or turbine, tttat 0) increases or decreases the Facility Narneplate Capacity,
or (2) changes the QualiSing 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 Idaho Power, at its sole deterrnination,
may adjust the pricing or terrrinate the Agreement. If the Agreement is
terminated because of said modifications, the Seller will be responsible for
any Termination Darnages.
STAFF RECOMMEI\IDATIONS
Staffrecommends the Commission approve the new ESA on the condition that the parties
update the ESA by including the additional provision above. Staffalso recommends that, if the
parties update the ESA, the Commission declare the Company's payments to the Seller under the
ESA for energy be allowed as prudently incurred expenses for ratemaking purposes.
3STAFF COMMENTS NOVEMBERZ3,2O2I
Rffipacdully s$miMthis 2- 3 d
day ofNovember NLl.
Rilcy Neuruonkpfy Afiomey Gea€fral
TeehnicalStaft YaoYin
tdc/ffi,ipooel.3rryym
4STAFF COMMENTS NO\mMBER 23,2V21
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS T'd DAY OF NOVEMBER 2021,
SERVED THE FOREGOING COMMENTS OF TEE COMI}IISSION STAtrT" IN
CASE NO. IPC.E.21-33, BY E-MAILING A COPY THEREOF, TO THE FOLLOWING:
DONOVAN E WALKER
TDAHO POWERCOMPA}IY
PO BOX 70
BOISE rD 83707-0070
E-MAIL: [e-mail]
dockets@ idahopower. com
TRISHA ARAVE
1150 HWY 30 W
POCATELLO ID 832M
E-MAIL: [e-mail]
ENERGY CONTRACTS
IDAHO POWERCOMPAI{Y
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
DAVID ALBRIGHT
ll50 HwY 30 w
POCATELLO ID 83204
E-MAIL: [e-mail]
/laut-C /V-r#,-
SECRETARY
CERTIFICATE OF SERVICE