20220617Final_Order_No_35435.pdf

ORDER NO. 35435 1

Office of the Secretary
Service Date
June 17, 2022
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT WITH
FAULKNER BROTHERS HYDRO, FOR THE
SALE AND PURCHASE OF ELECTRIC
ENERGY FROM THE FAULKNER RANCH
HYDRO PROJECT
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CASE NO. IPC-E-22-10

ORDER NO. 35435

On April 1, 2022, Idaho Power Company (“Company”) applied for approval or denial of
an Energy Sales Agreement (“ESA”) between the Company and Faulkner Brothers Hydro
(“Seller”) under which the Company would purchase electric generation from the Faulkner Ranch
Hydro Project (“Facility”). The Company represented that the Seller currently has a Public Utility
Regulatory Policies Act of 1978 (“PURPA”) energy sales agreement with the Company for the
Facility that was executed on December 11, 1986 (“1986 Agreement”). The 1986 Agreement
expires on July 31, 2022.
The Company represented that, on March 21, 2022, the Company and the Seller entered
the ESA for a Non-Seasonal Hydro project for a 20-year term using the non-levelized, non-
seasonal hydro published avoided cost rates as established by the Commission in Order No. 35052,
for replacement contracts and for energy deliveries of less than ten average megawatts (“aMW”).
The Company represented that the maximum capacity amount for the ESA was 870
kilowatts (“kW”), and the Facility would not exceed ten aMW monthly. Should the Facility exceed
ten aMW monthly or 870 kW on an hourly basis, the Company would accept the energy
(“Inadvertent Energy”) but would not purchase or pay for the Inadvertent Energy. The Company
has also represented that the project configuration in the ESA was the same configuration that had
been operating under the 1986 Agreement, and the ESA contained payment for capacity during
the full term.
The Company requested that the Commission accept or reject the ESA and declare that all
payments for purchases of energy under the ESA be allowed as prudently incurred expenses for
ratemaking purposes.

ORDER NO. 35435 2

STAFF COMMENTS
Staff reviewed the Company’s Application and submitted material. Staff focused on: (1)
the eligibility for and the amount of capacity payments; (2) the 90/110 Rule with at least five-day
advanced notice for adjusting Estimated Net Energy Amounts; and (3) avoided cost rates.
Based on its review, Staff believed the Facility should be granted immediate capacity
payments for its entire generation capacity amount over the full term of the ESA. Staff confirmed
that the ESA contained the 90/110 Rule as required by Commission Order No. 29632, and Staff
also confirmed that the ESA required the Seller to give the Company at least five-day advanced
notice if the Seller planned to adjust its Estimated Net Energy Amounts for purposes of complying
with the 90/110 Rule. Finally, Staff verified that the avoided cost rates contained in the ESA were
correct.
Staff recommended that the Commission approve the ESA as filed and declare that all
payments for purchases of energy under the ESA between Idaho Power and the Seller be allowed
as prudently incurred expenses for ratemaking purposes.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over the Company’s Application and the issues in this
case under Title 61 of the Idaho Code including, Idaho Code §§ 61-501, -502, and -503. The
Commission is empowered to investigate rates, charges, rules, regulations, practices, and contracts
of all public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provisions of law, and to fix the same by order. Idaho Code
§§ 61-501, -502, and -503.
The Commission has reviewed the Company’s Application including all submitted
materials, Staff comments, and Company reply comments. Based on its review of the record, the
Commission finds it fair, just, and reasonable to approve the Company’s Application as filed. The
Commission also finds that all payments for purchases of energy under the ESA between Idaho
Power and the Seller are prudently incurred expenses for ratemaking purposes.
ORDER
IT IS HEREBY ORDERED that the ESA between the Company and Seller is approved as
filed.
IT IS FURTHER ORDERED that purchases of energy under the ESA between the
Company and the Seller are prudently incurred expenses for ratemaking purposes.
ORDER NO. 35435 3

THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date upon this Order regarding 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 and 62-619.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 17th day of
June 2022.

ERIC ANDERSON, PRESIDENT

JOHN CHATBURN, COMMISSIONER

JOHN R. HAMMOND JR., COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\IPC-E-22-10 Faulkner\orders\IPCE2210_final_cb.docx