20200513Comments.pdf

STAFF COMMENTS 1 MAY 13, 2020
MATT HUNTER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10655

Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714

Attorney for the Commission Staff

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR APPROVAL
OR REJECTION OF AN ENERGY SALES
AGREEMENT WITH RUSSELL LEMOYNE
FOR THE SALE AND PURCHASE OF
ELECTRIC ENERGY FROM THE LEMOYNE
HYDRO PROJECT
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CASE NO. IPC-E-20-12

COMMENTS OF THE
COMMISSION STAFF

The Staff of the Idaho Public Utilities Commission comments as follows on Idaho Power
Company’s Application.

BACKGROUND
On March 10, 2020, Idaho Power Company (“Idaho Power”) filed an Application
requesting consideration of an Energy Sales Agreement (“ESA” or “Agreement”) with Russell
LeMoyne for energy generated by the LeMoyne Hydro Project (“Facility”). The Facility is a
qualifying facility (“QF”) under the Public Utility Regulatory Policies Act of 1978. The Facility
has a scheduled First Energy Date under the ESA of June 22, 2020.
The Facility is a 75-kilowatt nameplate capacity hydro facility near Hagerman, Idaho. The
Agreement contains published non-seasonal, non-levelized avoided cost rates for a 10-year term.
The Facility has been delivering energy to Idaho Power in accordance with an energy sales
agreement dated April 23, 1985, which expires June 21, 2020.

RECEIVED
2020 May 13PM2:11
IDAHO PUBLIC
UTILITIES COMMISSION

STAFF COMMENTS 2 MAY 13, 2020
STAFF ANALYSIS
Staff recommends approval of the proposed ESA between Idaho Power and Russell
LeMoyne. Staff’s justification is based upon its review of the ESA, which was focused on: 1) the
90/110 rule with at least five-day advanced notice for adjusting Estimated Net Energy Amounts; 2)
eligibility for and the amount of capacity payments; and 3) verification of non-seasonal hydro
avoided cost rates.

90/110 Rule
Qualifying facilities provide a monthly estimate of the amount of energy they expect to
produce. If the QF delivers more than 110 percent of the estimated amount, energy delivered in
excess of 110 percent is priced at the lesser of 85 percent of the market price or the contract price.
If the QF delivers less than 90 percent of the estimated amount, total energy delivered is priced at
the lesser of 85 percent of the market price or the contract price. Order No. 29632. Staff verified
that this provision is included in the ESA.
The ESA adopted a five-day advanced notice for adjusting Estimated Net Energy Amounts
for purposes of complying with 90/110 firmness requirements. The Commission has approved a
five-day revision to monthly generation estimates in previous cases, recognizing that Estimated Net
Energy Amounts that are closer to the time of delivery can improve the accuracy of input used by
the Company for short-term operational planning. See, e.g., Case Nos. IPC-E-19-01, IPC-E-19-03,
IPC-E-19-04, IPC-E-19-07, and IPC-E-19-12. The Facility has been generating energy since the
mid-1980s, and the Company has a long generation history for the QF. Staff believes a five-day
advanced notice is sufficient.

Capacity Payment
In Order No. 32697, the Commission stated that, “If a QF project is being paid for capacity
at the end of the contract term, and the parties are seeking renewal/extension of the contract, the
renewal/extension includes immediate payment of capacity.” Although the original contract did
not contain a capacity payment, Staff believes the Facility should be granted capacity payment for
the full term of the replacement contract, as was granted by the Commission to the Black Canyon
#3 project in Case No. IPC-E-19-04.
Similar to the Black Canyon #3 project, the Facility in its original contract included
avoided cost rates without a capacity payment as determined in Order No. 18190, effective

STAFF COMMENTS 3 MAY 13, 2020
September 1, 1983, because Idaho Power was at that time energy constrained, not capacity
constrained. Since about the year 2000, the Company has added significant amounts of capacity
such as Danskin (2001 and 2008), Bennett Mountain (2005), and Langley Gulch (2012) gas plants.
Because the Company went through those multiple capacity deficiency periods during the
Facility’s 35-year contract term, Staff is confident that the project has contributed to meeting the
Company’s need for capacity.
In addition, the nameplate capacity size (75 kW) remains unchanged in the replacement
contract. Therefore, Staff believes the Facility should be granted capacity payment for its entire
nameplate capacity size for the full term of the replacement contract.

Verification of Non-Seasonal Hydro Avoided Cost Rates
Staff reviewed the non-seasonal hydro avoided cost rates contained in the Agreement and
verified that the proposed rates are correct and comply with existing orders.

STAFF RECOMMENDATIONS
Staff recommends the Commission approve the ESA. Staff also recommends the
Commission declare Idaho Power’s payments to Russell LeMoyne for the purchase of energy
generated by the LeMoyne Hydro Project under the ESA be allowed as prudently incurred
expenses for ratemaking purposes.

Respectfully submitted this 13th day of May 2020.

________________________________
Matt Hunter
Deputy Attorney General

Technical Staff: Yao Yin
Rachelle Farnsworth

i:umisc/comments/ipce20.12mhyyrf comments
CERTIFICATE OF SERVICE
CERTIFICATE OF SERVICE

I HEREBY CERTIFY THAT I HAVE THIS 13th DAY OF MAY 2020,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-20-12, BY E-MAILING A COPY THEREOF, TO THE
FOLLOWING:

DONOVAN E WALKER
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
[e-mail]

ENERGY CONTRACTS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]

RUSSELL LeMOYNE
LeMYNE HYDRO PROJECT
PO BOX 696
HAGERMAN ID 83332
E-MAIL: [e-mail]

/s/ Reyna Quintero __
SECRETARY