20220310Reconsideration_Order_No_35344.pdf

ORDER NO. 35344 1
Office of the Secretary
Service Date
March 10, 2022
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S ANNUAL COMPLIANCE
FILING TO UPDATE THE LOAD AND GAS
FORECASTS IN THE INCREMENTAL COST
INTEGRATED RESOURCE PLAN AVOIDED
COST MODEL
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CASE NO. IPC-E-21-35

ORDER NO. 35344

On October 15, 2021, Idaho Power Company (“Company”) filed its annual update
(“Filing”) to its load forecast, natural gas price forecast, and contracts used as inputs to calculate
its incremental cost Integrated Resource Plan (“IRP”) avoided cost rates. The Company must
update these inputs annually by October 15. See Order Nos. 32697 and 32802.
On November 5, 2021, the Company filed a supplement to its Filing which updated the
Peak Hours and Premium Peak Hours used to calculate capacity payments for battery storage
resources in the incremental cost IRP avoided cost model.
On November 19, 2021, the Commission issued Notice of Filing and established a
public comment and Company reply deadline. Order No. 35228.
On November 22, 2021, the Company filed a second supplement correcting an error
that the Company discovered in the natural gas price forecast it initially submitted in its Filing.
On December 21, 2021, Commission Staff (“Staff”) filed comments to which the
Company filed a reply.
On January 21, 2022, the Commission issued Final Order No. 35294 therein approving
the Company’s updated load forecast and contracts used as inputs to calculate its incremental cost
IRP avoided cost rates but rejecting the Company’s natural gas price forecast.
On February 11, 2022, the Company filed a Petition for Clarification and/or
Reconsideration (“Petition”) asking the Commission to grant clarification and/or reconsideration
on “two specific issues related to Order No. 35294 direction regarding the natural gas price
forecast.” Staff filed comments in response to the Petition on February 18, 2022.
Having reviewed the record and the Company’s Petition, we issue this Order clarifying
the issues regarding the Company’s natural gas price forecast.

ORDER NO. 35344 2
BACKGROUND
IRP avoided cost rates are available to qualifying facilities (“QFs”) that are above the
resource-specific project eligibility cap for published avoided cost rates under Idaho’s
implementation of the Public Utility Regulatory Policies Act of 1978 (“PURPA”).
Under PURPA and the Federal Energy Regulatory Commission’s (“FERC”)
implementing regulations, QFs that are below the applicable project eligibility cap are eligible to
receive published avoided cost rates calculated using the surrogate avoided resource. See Order
No. 32697 at 7-8. The avoided cost rate is the purchase price paid to QFs for the energy and
capacity that the QF provides to the utility. 18 C.F.R. § 292.101(b)(6)(defining “avoided cost”).
To ensure that avoided costs most accurately reflect the utility’s marginal cost of energy or
capacity, the Commission has directed utilities to “update fuel price forecasts and load forecasts
annually – between IRP filings,” and to update the Commission about its “long-term contract
commitments because of [their] potential effect . . . on a utility’s load and resource balance.” See
Order No. 32697 at 22.
Staff recommended the Commission reject the Company’s natural gas price forecast
which used the July 2021 Platts forecast and further recommending that the Company use “the
latest NYMEX forwards prices” and reevaluate its “natural gas price forecast methodology prior
to the next annual update . . . .” December 21, 2021, Staff Comments at 10.
On December 28, 2021, the Company replied that Staff’s recommendation to change
the forecast source—from Platts to NYMEX—was inconsistent with Commission precedent and
unsupported by any evidence. As an alternative to Staff’s proposal to reject the July Platts Forecast
and substitute it with a NYMEX forwards-based method, the Company offered to update the
natural gas forecast with the Platts December 2021 update. Company Reply Comments at 8-9.
On January 21, 2022, the Commission issued Final Order No. 35294 therein directing
the Company to “file a three-year natural gas forecast update as a compliance filing . . . utilizing
the latest NYMEX forwards prices to determine IRP avoided cost rates for contracts signed on or
after January 1, 2022, until the effective date of the next natural gas price forecast annual update.”
Order No. 35294 at 11. The Commission further ordered the Company reevaluate its “natural gas
price forecast methodology prior to the next annual update, especially the method used to
determine the first three years of the forecast time horizon used to determine IRP-based avoided
cost rates.” Id.

ORDER NO. 35344 3
THE PETITION
The Company first requested the Commission clarify whether it intended for the
Company to use “the October 15, 2021, NYMEX forwards, and not the forwards from some later
date, for the first three years of the forecast.” Petition at 4. The Company next requested
confirmation that the “Commission intended to direct the Company to file an updated 20-year gas
price forecast, with the first three years (2022-2024) of the forecast compiled using NYMEX
forwards.” Id. Finally, the Company requested the Commission to clarify whether—if the
Commission intended the Company file an updated 20-year natural gas price forecast with the first
three years (2022-2024) of the forecast compiled using NYMEX forwards—it also intended that
it “use the NYMEX forward pricing as of October 15, 2021, for the first three years, and then
transition to the July [2021] vintage of the Platts forecast in year four and for the remainder of the
forecast period.” Id. at 5.
STAFF’S REPLY
Staff responded to the Company’s Petition, that: (1) it was reasonable for the Company to
use the NYMEX forwards as of October 15, 2021 for the natural gas price forecast in Case No. IPC-
E-21-35; (2) it recommended that the Company file an updated 20-year natural gas price forecast; and
(3) it was reasonable for the Company “to transition to the July 2021 vintage of the Platts forecast in
year four by averaging the NYMEX and Platts’ prices, and then only use the Platts’ prices for years
five through twenty” of the updated 20-year natural gas price forecast. Staff Comments on Petition for
Clarification and/or Reconsideration at 1-2.
As such, Staff recommended that the Company: (1) use years 2022, 2023, and 2024
NYMEX forwards for the natural gas price forecast; (2) use an average of the 2025 NYMEX forwards
and year 2025 of the July 2021 vintage Platts forecast for year 2025 of its natural gas price forecast;
(3) use years 2026 through 2041 of the July 2021 vintage Platts forecast for the remaining years of the
natural gas price forecast; and (4) submit the updated 20-year natural gas price forecast as a compliance
filing.
STANDARD OF REVIEW
A person may petition the Commission to reconsider its orders. See Idaho Code § 61-
626; Rules 331-333 (IDAPA 31.01.01.331-.333). Reconsideration allows the petitioner to bring to
the Commission’s attention any question previously determined and affords the Commission an
opportunity to rectify any mistake or omission. Washington Water Power Co. v. Kootenai
Environmental Alliance, 99 Idaho 875, 879, 591 P.2d 122, 126 (1979); Rule 325. The petitioner

ORDER NO. 35344 4
has 21 days from the date of the final order in which to ask for reconsideration. Idaho Code § 61-
626(1). The petition must specify why it “contends that the order or any issue decided in the [o]rder
is unreasonable, unlawful, erroneous or not in conformity with the law.” Rule 331.01. Further, the
petition “must state whether the petitioner . . . requests reconsideration by evidentiary hearing,
written briefs, comments, or interrogatories.” Rule 331.03. Any answers or cross-petitions must
be filed within seven days after the petition was filed. Rule 331.02 and .05.
Once a petition is filed, the Commission must issue an order saying whether it will
reconsider the parts of the order at issue and, “[i]f reconsideration be granted, said order shall
specify how the matter will be reconsidered and whether any cross-petitions for reconsideration
will be granted.” Idaho Code § 61-626(2). If reconsideration is granted, the Commission must
complete its reconsideration within 13 weeks after the date for filing petitions for reconsideration.
Idaho Code § 61-626(2). The Commission must issue its final order on reconsideration within 28
days after the matter is finally submitted for reconsideration. Id. An order made after
reconsideration abrogating or changing the original order has the same force and effect as an
original order. Id.
COMMISSION FINDINGS AND DISCUSSION
The Commission has jurisdiction over this matter under Idaho Code §§ 61-501, -502
and -503. 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 and 61-503. In addition, the Commission has authority under PURPA and FERC
regulations to set avoided costs, 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.
Under this authority we have reviewed the record in this case, including the Petition,
and Staff’s comments. We clarify that our directive in Order No. 35294 was for the Company to
use the NYMEX forwards prices as of October 15, 2021, for the natural gas forecast in this case.
As we stated in Order No. 35294, the NYMEX forwards prices “represents current market
conditions and aligns with other similar forecasts filed by the two other electric utilities. Moreover,
contracts negotiated using the IRP Methodology are typically two-year contracts. Therefore, near
term pricing is a more accurate reflection of market conditions and anticipated natural gas prices.”

ORDER NO. 35344 5
Order No. 35294 at 10. In addition to the above reasoning, we note that the NYMEX forwards as
of October 15, 2021, was the most current forecast prior to the Company’s deadline to file its
natural gas price forecast (October 15, 2021).
We further find, consistent with our reasoning in Order No. 35294, that it is reasonable
for the Company to file an updated 20-year natural gas price forecast using the NYMEX forwards
prices for years 2022-2024, an average of the 2025 NYMEX forwards and year 2025 of the July 2021
vintage Platts forecast for year 2025, and the July 2021 vintage Platts forecast for the remaining years—
2026 through 2041. We further clarify that the Company shall file an updated 20-year forecast that
reflects the clarifications and directives in this Order as a compliance filing.
O R D E R
IT IS HEREBY ORDERED that the Company’s Petition for reconsideration and/or
clarification is granted. The Company shall: (1) use NYMEX forwards prices as of October 15, 2021,
for years 2022, 2023, and 2024 of the 20-year forecast; (2) use an average of year 2025 NYMEX
forwards prices and year 2025 of the July 2021 vintage Platts forecast for year 2025 of its forecast; (3)
use the July 2021 vintage Platts forecast for the remaining years of the forecast (years 2026-2014); and
(4) submit the updated 20-year forecast as a compliance filing
THIS IS A FINAL ORDER ON RECONSIDERATION. Any party aggrieved by this
Order may appeal to the Supreme Court of Idaho pursuant to the Public Utilities Law and the Idaho
Appellate Rules. See Idaho Code § 61-627.
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ORDER NO. 35344 6
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 10th day
of March 2022.

ERIC ANDERSON, PRESIDENT

JOHN CHATBURN, COMMISSIONER

JOHN R. HAMMOND JR., COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\IPC-E-21-35\orders\IPCE2135_final on recon_rn.docx