20221114Application.pdf

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November 11,2022
VlA ELECTRONIC FILING
Jan Noriyuki, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A(83714)
PO Box 83720
Boise, ldaho 83720-007 4
Case No. !PC-E-22-29
ln the Matter of ldaho Power Company's Application for Approval of a Power
Purchase Agreement with Pleasant Valley Solar, LLC
Dear Ms. Noriyuki:
Attached for electronic filing please find ldaho Power Company'sApplication in the
above matter.
Attachment 1 containsconfidential information and willbe provided separatelyvia an
encrypted email to parties who sign the protective agreement.
Please feel free to contact me directly with any questions you might have about this
filing.
Very truly yours,
DONOVAN WALKER
Lead Gounsel
[e-mail]
DEW:cd
Enclosures
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Donovan E. Walker
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221\Nest ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwa I ker@ i d a ho power. co m
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
APPROVAL OF A POWER PURCHASE
AGREEMENT WITH PLEASANT VALLEY
SOLAR, LLC.
CASE NO. IPC-E-22-29
APPLICATION
ldaho Power Company ("ldaho Powe/'or "Company"), in accordance with RP 52
and ldaho Code SS 61-502 and 61-503, hereby requests that the ldaho Public Utilities
Commission ("Commission") issue an order approving the 2O-year Power Purchase
Agreement ('PPA") between ldaho Power and Pleasant Valley Solar, LLC ('Pleasant
Valley Solaf or "Selle/') entered into with the expectation of assigning the associated
energy and Green Tags/Environmental Attributes to Brisbie LLC ("Brisbie") under the
provisions contained in the Special Contract submitted for Commission review and
approval in Case No. IPC-E-2142. ldaho Power's Application is based on the following:
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APPLICATION - 1
!. BACKGROUND AND BRISBIE SPECIAL CONTRACT
1. Brisbie is constructing a new enterprise data center near Kuna, lDl that will
exceed 20,000 kW of electric service at a single facility making it a Large Power Service
customer requiring a Special Contract to take service. ldaho Power and Brisbie have
negotiated a Special Contract for the provision of electric service to Brisbie by ldaho
Power. The Special Contract between Brisbie and ldaho Power is also refened to herein
and in testimony as the Energy Services Agreement ('ESA" or "Brisbie ESA"). The ESA
was filed with the Commission for its review and approval in Case No. IPC-E-21-42 and
is provided as Confidential Exhibit No. 1 to the Direct Testimony of Timothy E. Tatum
("Tatum Direct') in that docket which is currently pending a Final Order from the
Commission.
2. Brisbie, and its parent company Meta Platforms, lnc. ("Meta"), has a
sustainability objective to support 100 percent of the new data center operations with new
renewable resources. To accomplish the goal of serving Brisbie's load with 100 percent
renewable energy ldaho Power will have to add new renewable resources to its system.
Brisbie's Special Contract encompasses the pricing associated with retailelectric service
from ldaho Power, cost and credit components associated with new renewable resources
to support Brisbie's Ioad, and terms and conditions governing the structure of this new
arrangement, including provisions that wil! hold other ldaho Power customers harmless.
3. Under the proposed Special Contact, ldaho Power would procure enough
renewable resources to provide Brisbie with 100 percent renewable support on an annual
basis for Brisbie's facility. See, Tatum Direct, p 7-8. Brisbie is in turn required to pay
1 On February 16,2022, after the initial filing of the Brisbie ESA in Case No. IPC-E-2142, Meta, f/Ua
Facebook lnc. and Brisbie, publicly announced the development of its new 960,000+ square foot data
center in Kuna, ldaho.
APPLICATION - 2
ldaho Power the costs associated with these resources. Brisbie will pay the costs
associated with and provide security for the new renewable resources acquired under the
ESA as described in Tatum Direct, p 10-11.
4. As summarized in the Special Contract filing2 to accomplish the goal of
supporting 100 percent of the data center operations with renewable energy the Brisbie
ESA provides for a tailored acquisition of the right amount of renewable generation while
also ensuring reliable electric service to the customer. As an enterprise data center,
Brisbie's energy will remain high and consistent throughout the day. ln contrast,
renewable resources are intermittent (e.9., solar only generates electricity during daylight
hours). To reconcile this mismatch of energy service requirements and renewable
generation but still achieve Brisbie's renewables objective, the renewable resources for
Brisbie must be appropriately sized to ensure that the total renewable generation output
over the year matches or slightly exceeds Brisbie's annual energy consumption. The
renewable resources will not serve Brisbie directly but will be procured on the customer's
behalf by ldaho Power and connected directly to the Company's transmission system.
Brisbie wil! pay for the costs associated with the renewables required to support their load
and will also be credited for the value those resources bring to ldaho Power's system. To
this end, Brisbie's associated renewable resources are incorporated into the base
planning analysis of the 2021 IRP (presumed to be solar resources for purposes of this
analysis). See Tatum Direct, p 12-13. lnclusion of the renewables in the IRP modeling
allows them to be treated as system resources for modeling purposes and enables ldaho
Power to quantify their value to the Company and its broader customer base.
2 \PC-E-Z1-42.
APPLICATION - 3
II. PLEASANT VALLEY SOLAR PPA
5. On October 27,2022, ldaho Power and Pleasant Valley Solar entered into
a PPA for the sale and purchase of 200 MW AC of renewable solar electric generation
for a term of twenty years from the Commercial Operation Date, scheduled to be March
2, 2025. Under the terms of the PPA, Pleasant Valley Solar wil! build, own, operate, and
maintain a 200 megawatt ('MW') alternating current (?C") solar photovoltaic generation
facility ("Renewable Resource") and will supply the output to ldaho Powe/s system.
Brisbie is identified in the PPA as a third-party beneficiary receiving energy and Green
Tags associated with the facility's Net Output. The PPA is provided as Confidential
Attachment No. 1 to this Application and incorporated herein by this reference. Exhibit 5
to the PPA sets forth the Contract Price for Contract Years 1 through 20 on a dollars per
megawatt-hour ("MWh") basis.
6. The PPA is similar in many ways to the numerous energy sales agreements
approved by the Commission pursuant to the Company's obligations under Public Utility
Regulatory Policies Act of 1978 ("PURPA'), but also contains additional other terms and
conditions consistent with industry standard, non-PURPA power purchase agreements
including pricing, security, and other terms of service. Under Article 7 of the ESA either
Brisbie or ldaho Power may solicit and present Renewable Resource Projects eitherfrom
third-party developers or as ldaho Power owned resources for negotiation and
procurement to meet Brisbie's Ioad underthe ESA. Renewable Resource PPAs procured
under the ESA shal! be substantially in the form of the PPA template provided as Exhibit
6.2(a) to the ESA. The Pleasant Valley Solar PPA is based upon the contract template
that is attached as Exhibit 6.2(a) to the Special Contract. This template was developed
APPLICATION - 4
from and is substiantially similar to the Commission-approved PPAs for both the Jackpot
Solar and Black Mesa projects.
7 . The PPA provides for a Scheduled Commercial Operation Date of March 2,
2025. Section 1.126. The PPA provides for a Guaranteed Commercia! Operation Date,
which is 180 days after the Scheduled Operation Date under Section 1.55. Section 9 of
the PPA contiains provisions requiring the Seller to post and maintain security, both
Facility Development Security and Default Security. Project Development Security in the
amount of $90,000 per MW of Nameplate Capacity Rating must be in place within 30
days of a final order of the Commission approving the Agreement. Project Development
Security is to remain in place to ensure the project meets its Commercial Operation Date.
Default Security in the initial amount of $90,000 per MW of Nameplate Capacity Rating
must be in place at the Commercial Operation Date and must be maintained through the
entire term of the Agreement. Default Security may be used for any Deficit Damages if
the project is brought online at less than the Expected Nameplate Capacity or for any
other damages ldaho Power suffers if the Agreement is terminated because of the Selle/s
Default.
8. The PPA also contains a performance requirement in the form of an Output
Guarantee. Section 7.12. Under the Output Guarantee, the Seller is obligated to deliver
90 percent of the Expected Energy of the Facility on a monthly basis. Similar to recent
provisions from PURPA agreements, the PPA allows the Seller an adjustment of
Estimated Monthly Net Output Amounts by the 25th day of the preceding month in Section
7.12.1.2. lf the project delivers less than the Output Guarantee during any month, the
Seller must pay the Output Shortfall for that month multiplied by ldaho Power's Cost to
Cover as liquidated damages in Section 7.12.2.3. lf the delivered Net Output is equal to
APPLICATION - 5
or greater than the Output Guarantee, then the Seller is deemed to have satisfied the
Output Guarantee in Section 7.12.2.1. Section 7 of the PPA contains standard provisions
for operation and control of the project. These include such things as planned outages,
forced outages, and maintenan@ outages, as wellas scheduling, forecasting, generator
output limit control (.'GOLC'), and metering. For forecasting, the Agreement provides the
same allocated portion of the total cost of ldaho Powe/s Solar Energy Production
Forecast model that is used for all solar projects that are under contract to provide energy
to ldaho Power. Underthe PPA, ldaho Powerwil! receive 100 percent of the Green Tags
or Environmental Aftributes associated with the Facility, which will be claimed by Brisbie
pursuant to the Special Contract.
9. Section 3.1.1 provides that the PPA can be terminated by ldaho Power if it
has not received Commission approval of all the PPA's terms and conditions and declared
that all payments ldaho Power makes to Seller for purchases of energy will be allowed as
prudently incuned expenses for ratemaking purposes; Commission approval of the
Special Contract between ldaho Power and Brisbie; and OPUC approval of a waiver of
the application of its procurement rules. This section provides that if Commission
approva! is not obtained within six months of filing of the PPA with the Commission for
approval, the Scheduled Commercial Operation Date and Guaranteed Commercial
Operation Date may be extended on a day-for-day basis until approva! is obtained.
Should Commission approval not be obtained within one-year of filing the PPA with the
Commission, then the Seller has the right to terminate the Agreement.
APPLICATION - 6
III. MODIFIED PROCEDURE
10. ldaho Power believes that a hearing is not necessary to considerthe issues
presented herein and respectfully requests that this Application be processed under
Modified Procedure; i.e., by written submissions rather than by hearing. RP 201, ef seg.
Additionally, the Pleasant Valley Solar PPA needs to be online in coordination with
Brisbie's load service by the Scheduled Commercial Operation Date of March 2,2025,
and the developer of the Pleasant Valley Solar project requires sufficient lead time for
financing, procurement, and construction once Commission approval of the PPA is
obtained in order to meet the Scheduled Commercial Operation Date. The PPA provides
forday-for-day extension of the March 2,2025, Scheduled Commercial Operation Date if
Commission approval of the PPA is not obtained by May 11,2023. Consequently, ldaho
Power respectfully requests the Commission consider a procedural schedule that would
allow for a final Order prior to May 1 1,2023.
IV. COMMUNICATIONS AND SERVICE OF PLEADINGS
11. Communications and service of pleadings with reference to this
Application should be sent to the following
Donovan E. Walker Tim Tatum
Regulatory Dockets Connie Aschenbrenner
ldaho Power Company ldaho Power Company
1221West ldaho Street (83702) 1221West ldaho Street (83702)
P.O. Box 70 P.O. Box 70
Boise, ldaho 83707 Boise, ldaho 83707
[e-mail] [e-mail]
[e-mail] [e-mail]
enerovco ntracts@ ida hopower. com
APPLICATION. T
V. CONCLUSION
12. Approval of the Pleasant Valley Solar PPA is in the public interest. ldaho
Power and Brisbie have worked together to establish a framework that will take a
meaningfulstep towards accomplishing Brisbie's renewable energy goals, while ensuring
the related pricing appropriately assigns the costs and benefits of procuring the
Renewable Resource to Brisbie. All costs associated with the Pleasant Valley Solar PPA
will be paid for by Brisbie, which ensures other customers are not harmed by the
anangement. The rates are just, reasonable, consistent with past cost-of-service
determinations, and in the public interest.
13. THEREFORE, ldaho Power respectfully requests that the Commission
issue an Order prior to May 1 1, 2023 approving the 2O-year PPA between ldaho Power
and Pleasant Valley Solar, which was negotiated with the expectation of asslgning that
energy to Brisbie under the Special Contract and that all payments to be made to Seller
thereunder shall be allowed as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this 11th day of November 2022.
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DONOVAN E. WALKER
Attorney for ldaho Power Company
APPLICATION - 8
BEFORE THE
IDAHO PUBLIG UTILITIES GOMMISSION
CASE NO. IPC-E-22-29
IDAHO POWER COMPANY
ATTACHMENT 1
SEE ATTACHED CONFIDENTIAL DOCUMENT