20230620Comments.pdf

MICHAEL DUVAL
DEPUTY ATTORNEY GENERAL Û 8IDAHOPUBLICUTILITIESCOMMISSION
PO BOX 83720
BOISE,IDAHO 83720-0074
[phone]
IDAHO BAR NO.11714
Street Address for Express Mail:
11331 W CHINDEN BLVD,BLDG 8,SUITE 201-A
BOISE,ID 83714
Attorneyfor the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )COMPANY'S APPLICATION FOR APPROVAL )CASE NO.IPC-E-23-15OFAFIRSTAMENDMENTTOTHEENERGY)SALES AGREEMENT WITH THE SISW LFGE )PROJECT )COMMENTS OF THE
)COMMISSION STAFF
Staff of the Idaho Public Utilities Commission,by and through its Attorneyof record,
Michael Duval,Deputy AttorneyGeneral,and submits the followingcomments.
BACKGROUND
On April 28,2023,Idaho Power Company ("Company")applied to the Commission
requesting approval of the First Amendment ("Amendment")to its Energy Sales Agreement
("ESA")with CAFCo Idaho Refuse Management LLC Idaho ("CAFCo")("Application").The
Amendment requested to update several key descriptions of the Southern Idaho Regional Solid
Waste District Landfill Gas to Energy Project ("Facility").
On June 1,2017,the Commission approvedthe Parties'ESA,which stated that the
Project shall initially consist of a 2.6 megawatts ("MW")generation unit with the ability to add a
subsequent 2.4 MW generationunit,up to a total Facility capacity of 5 MW,within sixty months
of the Operation Date.
STAFF COMMENTS 1 JUNE 20,2023
However,the developer installed two 1.307 MW generation units,instead of a single 2.6
MW unit and within sixty months,they installed an additional 1.307 MW generationunit instead
of a 2.4 MW generation unit for a total of about 3.921 MW.
STAFF REVIEW
Staff's review focused on the sixty-montheligibilitywindow,the capacity size of the
subsequent unit,the Description of Facility and the Maximum Capacity Amount,the original
Article XXIII in the ESA,the new Article XXIII in the Amendment,and the Volt-Amps
Reactive ("VAR")Capability description.Based on its review,Staff recommends approval of
the Amendment conditioned on the followingupdates:
1.Allow the original Article XXIII to remain in the ESA.
2.Remove the VAR Capability description from Appendix B:Section B-1 of the
ESA and the Amendment.
Sixty-monthEligibility Window
Staff verified that the subsequent unit was installed within the sixty-montheligibility
window.The Operation Date of the Facility was September 1,2018,and the sixty-month
timeframe for installation of the subsequent unit ends on September 1,2023.The subsequent
unit has been installed and started operating before the end of the window.Response to Staff
Production Request No.1.
Capacity Size of Subsequent Unit
The installed subsequent unit is 1.307 MW,which is smaller than the previously
approved2.4 MW unit planned in the original ESA.Because the installed capacity size is
smaller,Staff believes that it does not create a need to adjust the avoided cost rates contained in
the original ESA.Staff also believes that the capacity size of the subsequent unit does not have
an impact on customer rates,because no overpayment will occur.
Description of Facility
Staff verified that the Description of Facility contained in the Amendment accurately
reflected the units installed,which included two 1.307 MW generation units,instead of a single
STAFF COMMENTS 2 JUNE 20,2023
2.6 MW unit,and a subsequent 1.307 MW generation unit,instead of a 2.4 MW generationunit.
The Maximum Capacity Amount is also modified to 3.921 MW in the Amendment to reflect the
total capacity of the installed units.
Original Article XXIII in the ESA
The Amendment deleted the provision contained in the original Article XXIII
(Modification)in the ESA and replaced it with a new provision in Article XXIII (Facility
Modification).The original provision in Article XXIII (Modification)stated that "[n]o
modification to this Agreement shall be valid unless it is in writingand signed by both Parties
and subsequently approved by the Commission."ESA at 29.Staff believes the original
provision should not be removed,because "modifications to this Agreement"contained in the
ESA and "modifications to Facility"contained in the Amendment are two different concepts,and
the former cannot replace the latter.Staff recommends that the provision from the original
Article XXIII remain in the ESA.
New Article XXIII in the Amendment
The Amendment includes a new section of Article XXIII (Facility Modification).The
language aligns with Facility Modification language recently approved by the Commission.
Order Nos.35767 at 1 and 35750 at 4.
VAR CapabilityDescription
In both the original ESA and the proposed Amendment,Appendix-B:Section B-1 lists
VAR Capability (both leading and lagging)as 0.8 for the initial units.Staff discovered that the
proposed Amendment does not explicitlymention VAR Capability of the subsequent 1.307 MW
generation unit.Upon further discussions with the Seller,the Company indicates that the correct
VAR Capability (both leading and lagging)for all three generation units (1.307 MW/each)
should have been 0.9,not 0.8 as exhibited in Appendix-B:Section B-1.However,through a
non-exhaustivesurvey of existing ESAs,the Company identified that not all ESAs include VAR
Capability information.Because reactive power requirements do not have an impact on the
rates,payments,or other terms of the ESA,the Company believes the VAR Capability
description can be removed from the ESA.See Response to Staff Production Request No.2.
STAFF COMMENTS 3 JUNE 20,2023
Staff agrees that reactive power requirements have no impacts on the rates and
recommends that the VAR Capability description in Appendix-B:Section B-1 be removed from
the ESA and the proposed Amendment.
STAFF RECOMMENDATIONS
Staff recommends approval of the Amendment conditioned on the followingupdates:
1.Allow the original Article XXIII to remain in the ESA.
2.Remove the VAR Capability description from Appendix B:Section B-1 of the
ESA and the Amendment.
Respectfullysubmitted this day of June 2023.
Michael uval ~
Deputy AttorneyGeneral
i:umisc/conunents/ipce23.15mdyyspcomments
STAFF COMMENTS 4 JUNE 20,2023
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 20th DAY OF JUNE 2023,SERVEDTHEFOREGOINGCOMMENTSOFTHECOMMISSIONSTAFF,IN CASE NO.IPC-E-23-15,BY E-MAILING A COPY THEREOF,TO THE FOLLOWING:
DONOVAN E WALKER ENERGY CONTRACTSMEGANGOICOECHEAALLENIDAHOPOWERCOMPANYIDAHOPOWERCOMPANYPOBOX70
PO BOX 70 BOISE ID 83707-0070
BOISE ID 83707-0070 E-MAIL:energycontracts idahopower.comE-MAIL:[e-mail]
[e-mail]
[e-mail]
NATE FRANCISCO
EXECUTIVE DIRECTOR &CEO
SOUTHERN ID SOLID WASTE
E-MAIL:nfrancisco sisw.org
SECRETARY
CERTIFICATE OF SERVICE