20230424Final_Order_No_35750.pdf

ORDER NO. 35750 1

Office of the Secretary
Service Date
April 24, 2023

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
NORTH SIDE ENERGY COMPANY, INC.
FOR THE SALE AND PURCHASE OF
ELECTIC ENERGY FROM THE BYPASS
HYDRO PROJECT
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CASE NO. IPC-E-23-02

ORDER NO. 35750

On January 19, 2023, Idaho Power Company (“Company” or “Idaho Power”) applied for
approval or rejection of an energy sales agreement (“proposed ESA”) with North Side Energy
Company, Inc. (“Seller”) for the energy generated by the Bypass Hydro Project (“Facility”). The
Facility has a 9,960 kilowatt (“kW”) nameplate capacity and is a qualifying facility (“QF”) under
the Public Utility Regulatory Policies Act of 1978 (“PURPA”). The Company requested its
Application be processed by Modified Procedure with a Commission determination prior to
expiration of the existing contract on May 31, 2023.
On February 6, 2023, the Commission issued a Notice of Application and Notice of
Modified Procedure establishing a March 13, 2023, Commission Staff (“Staff”) and public
comment deadline and a March 20, 2023, Company reply comment deadline. Order No. 35720.
Staff filed comments on March 13, 2023.
On March 17, 2023, the Company filed a “Motion for Extension of Time to File Reply
Comments” by March 31, 2023, which the Commission granted. Order No. 35720.1
The Company filed Reply Comments on March 31, 2023 (“Reply Comments”) with an
Attachment entitled “First Amendment to the Power Purchase Agreement Between Idaho Power
Company and Northside Energy Company, Inc.” (“First Amendment”).
On April 7, 2023, the Company filed its Errata, with an Attachment entitled, “First
Amendment to the Energy Sales Agreement Between Idaho Power Company and Northside
Energy Company, Inc.” (“Errata”, collectively with the Company’s proposed ESA, “Amended

1Staff’s recommendation in this case regarding Article XXIII was similar to its recommendation in Case No. IPC-E-
22-28; the Company filed a compliance filing in that case on March 31, 2023, in response to Staff’s recommendation
and the Commission’s order (Order No. 35705).
ORDER NO. 35750 2

ESA”) for “the purpose of correcting typographical errors” and making clarifications to the First
Amendment. Errata at 1.
With this Order, we approve the Company’s Amended ESA and declare all energy
payments under the Amended ESA prudently incurred expenses for ratemaking purposes.
THE APPLICATION
The Company stated that the Seller had been delivering energy from the Facility to the
Company under a firm energy sales agreement entered November 12, 1986, and expiring on May
31, 2023. The Company further stated that the proposed ESA, executed by the Company and the
Seller on January 3, 2023, contemplated a 20-year term with non-levelized, seasonal hydro
published avoided cost rates as set forth in Order Nos. 35422 and 35475 with full capacity
payments to the Seller for the entire term. Application at 2.
The proposed ESA required the Seller to estimate net energy and also adopted a “five-day
advanced notice for adjusting Estimated Net Energy Amounts for purposes of complying with
90/110 firmness requirements . . . .” Id. at 8. The Company represented that the proposed ESA
complied with all applicable federal and state laws and Commission orders and requested the
Commission approve the proposed ESA and declare all payments for the purchase of energy under
the proposed ESA be allowed as prudently incurred expenses for ratemaking purposes.
STAFF COMMENTS
Staff’s comments and analysis focused on Section B-7 and Article XXIII of the proposed
ESA as well as the Facility nameplate capacity, capacity payments, and avoided cost rates. Staff
recommended the Company make the following changes and/or clarifications to the proposed
ESA:
1. Update Section B-7 to correct an incomplete statement;
2. Correct the Facility nameplate capacity description and explain the difference between
“Facility nameplate capacity” and “net name nameplate capacity” in Appendix B; and
3. Update Article XXIII “Modifications” so the Facility operated “under a correct and
accurate contract” and received the “proper and authorized rate” on the first operation
date after it is modified.
Staff Comments at 2.
Staff also recommended that the Company “update the proposed ESA to reflect . . .
[i]ncluding recovery of Net Power Supply Expenses (“NPSE”) in the Power Cost Adjustment
ORDER NO. 35750 3

(“PCA”) based on proper and authorized rates starting from the first operation date of any facility
after it has been modified.”2 Id.
COMPANY REPLY
Prior to filing its Reply Comments in this case, the Company met with Staff, the Seller
representative, and counsel for IdahoHydro “[in] an effort to reach alignment on the contract
language and amendments pertaining to Facility modifications and related issues” and “implement
the Commission’s intent” in this case and Case No. IPC-E-22-28, “and in ESAs moving forward.”
Company Reply Comments at 3-4.
As a result of these meetings, the Company filed the First Amendment with its Reply
Comments. Id. at 4; Attachment 1. The Company represented that the First Amendment addressed
Staff’s concerns regarding Facility Modifications, the inclusions of NPSE in the PCA, the
incomplete statement in Section B-7, the error in the discrepancy in the Facility nameplate capacity
description and the distinction between the “net name nameplate capacity” and “Facility nameplate
facility” terms in Appendix B. The Company requested the Commission approve “the Agreement
between Idaho Power and Northside Energy, the First Amendment thereto, and declare that all
payments for purchases of energy thereunder be allowed as prudently incurred expenses for
ratemaking purposes.” Company Reply Comments at 5.
On April 7, 2023, the Company filed its Errata for “the purpose of correcting typographical
errors” and making clarifications to the First Amendment. Errata at 1; see Attachment 1 to the
Company’s Errata.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter under Idaho Code §§ 61-502 and 61-
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 Federal
Energy Regulatory Commission (“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

2 This recommendation aligned with the Commission’s directive to the Company in Case No. IPC-E-22-28, “to only
include net power supply expense in the Company’s Power Cost Adjustment that reflects the proper authorized rate
for all energy delivered as of the first operation date as a modified Facility.” Order No. 35705 at 4.
ORDER NO. 35750 4

FERC rules. The Commission may enter any final order consistent with its authority under Title
61 and PURPA.
The Commission has reviewed the record, including the Company’s Application, Staff’s
comments, and the Company’s Reply Comments and Errata. Based on that review, we approve
the Company’s Amended ESA. We find that the language in the Attachment to the Company’s
Errata addresses Staff’s recommendations regarding Section B-7, the Facility nameplate capacity
description, the difference between “Facility nameplate capacity” and “net name nameplate
capacity” in Appendix B, and the procedure for Modifications to the Facility under Article XXIII.
Based on the updated language in Article XXIII, as set forth in the Company’s Reply Comments
and Errata, our previous concern regarding the proper recovery of NPSE in the PCA is addressed.
We find the language outlining a process for Facility Modifications proposed by the Company to
be reasonable; we anticipate the Company using this language in all future energy sales agreements
for energy from QFs.
ORDER
IT IS HEREBY ORDERED that the Company’s Amended ESA is approved.
IT IS FURTHER ORDERED that all payments made by the Company for purchases of
energy and capacity under the Amended ESA shall be allowed as prudently incurred expenses for
ratemaking purposes.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of 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.
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ORDER NO. 35750 5

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 24th day of
April 2023.

__________________________________________
ERIC ANDERSON, PRESIDENT

__________________________________________
JOHN R. HAMMOND, JR., COMMISSIONER

__________________________________________
EDWARD LODGE, COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\IPC-E-23-02 ESA\orders\IPCE2302_final_rn.docx