20230719Reply Comments.pdf

DONOVAN WALKER
Lead Counsel
[e-mail]

July 19, 2023

VIA ELECTRONIC FILING

Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, Idaho 83720-0074

Re: Case No. IPC-E-23-19
Dietrich Drop Hydro Project
Idaho Power Company’s Application for Approval or Rejection of an
Energy Sales Agreement with American Falls Reservoir District No. 2

Dear Ms. Noriyuki:

Attached for electronic filing, please find Idaho Power Company’s Reply
Comments in the above-entitled matter. Please feel free to contact me directly with any
questions you might have about this filing.

Very truly yours,

Donovan E. Walker
DEW:cd
Enclosures
RECEIVED
2023 JULY 19, 2023 4:01PM
IDAHO PUBLIC
UTILITIES COMMISSION
IDAHO POWER COMPANY’S REPLY COMMENTS - 1
DONOVAN E. WALKER (ISB No. 5921)
MEGAN GOICOECHEA ALLEN (ISB No. 7623)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]

Attorneys for Idaho Power Company

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
AMERICAN FALLS RESERVOIR DISTRCIT
NO. 2

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CASE NO. IPC-E-23-19

IDAHO POWER COMPANY’S
REPLY COMMENTS

COMES NOW, Idaho Power Company (“Idaho Power” or “Company”) and,
pursuant to Idaho Public Utilities Commissions (“Commission”) Rule of Procedure1 203
and the Notice of Modified Procedure, Order No. 35620, hereby respectfully submits the
following Reply Comments in response to Comments of the Commission Staff (“Staff”) in
this case.

1 Hereinafter cited as RP.
IDAHO POWER COMPANY’S REPLY COMMENTS - 2
I. INTRODUCTION
The Company appreciates Staff’s thorough analysis of the Energy Sales
Agreement (“ESA”) for the sale and purchase of electric energy generated by the Dietrich
Drop Hydroelectric Project (“Seller” or “Project”), for which the Company is seeking
approval in this case. Idaho Power offers these reply comments in response to two of
Staff’s recommendations. In short, the Company does not object to Staff’s proposed
additional language to be added to the ESA regarding ESA modifications.

II. REPLY COMMENTS
Staff verified the avoided cost rates in the ESA and confirmed the Project’s
eligibility for capacity payments. Staff also commented in two other areas. First, Staff
took no issue with the new Article XXIII language regarding facility modifications but
recommended that the parties revise the ESA to also reincorporate language from the
original Article XXIII stating that no modification to the ESA would be effective unless it is
in writing, signed by both parties, and approved by the Commission. This language was
inadvertently removed. The language in section 23 as proposed was developed by the
Company, Staff, and the parties to Case Nos. IPC-E-22-28 and IPC-E-23-02, in response
to the Commission’s desire for more detail regarding potential facility modifications. In
proposing the new language addressing modifications, the language regarding ESA
modifications generally was inadvertently deleted when the new language addressing
modifications in more detail was proposed to replace it, without full realization at the time
by the Company or other parties of that effect.
Thus, the Company does not object to Staff’s recommendation to re-insert the
IDAHO POWER COMPANY’S REPLY COMMENTS - 3
language regarding ESA modifications generally. Commission approval is foundational
for the Company and certainly a prerequisite to an ESA modification being effective. The
Company proposes to make this change via an amendment to the ESA which will add a
new Article 23.8:
23.8 No modification to this Agreement shall be valid unless it is in
writing and signed by both Parties and subsequently
approved by the Commission.

Second, Staff recommended that if the Seller would like to change the year over
which eligibility for the seasonal hydro rates is evaluated, that Staff would not oppose
such a modification but that it should be reflected in an amendment to the ESA. Idaho
Power agrees with Staff’s position.
III. FIRST AMENDMENT TO THE ESA
Idaho Power has contacted the Seller and Seller wishes to implement the
aforementioned additional language regarding ESA modification as well as the change to
the seasonal hydro project evaluation period that was proposed in this matter and agreed
to by Staff. A First Amendment making these changes to the ESA has been signed by
Idaho Power and Seller and is submitted herewith as Attachment No. 1 hereto. Also
submitted herewith as Attachment No. 2 is a summary page showing the modified
provisions of the ESA in the First Amendment in redline format.
Because the existing ESA is set to expire on August 31, 2023, Idaho Power
respectfully requests that the Commission consider and approve the ESA as well as the
Frist Amendment in its Final Order, prior to September 1, 2023, so as not to have any
lapse in this purchase and sale under PURPA.

IDAHO POWER COMPANY’S REPLY COMMENTS - 4
III. CONCLUSION
Idaho Power appreciates Staff’s review and consideration of the issues in this case
and the opportunity to offer these Reply Comments to address Staff’s recommendations.
Idaho Power respectfully requests that the Commission issue an order consistent with
Staff’s recommendations to approve the ESA as well as the First Amendment thereto
incorporating Staff’s recommendations.

Respectfully submitted this 19th day of July 2023.

DONOVAN WALKER
Attorney for Idaho Power Company

IDAHO POWER COMPANY’S REPLY COMMENTS - 5
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 19th day of July 2023, I served a true and correct
copy of the within and foregoing Idaho Power Company’s Reply Comments upon the
following named parties by the method indicated below, and addressed to the following:

Michael Duval
Deputy Attorney General
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg No. 8,
Suite 201-A (83714)
PO Box 83720
Boise, ID 83720-0074

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Dietrich Drop Hydro Project
Miriah R. Elliott
711 E Turtle Point Drive
Ivins, UT 84738

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IdaHydro
C. Tom Arkoosh
ARKOOSH LAW OFFICES
913 w. River Street, Suite 450
P.O. Box 2900
Boise, ID 83701

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________________________________
Christy Davenport, Legal Assistant

BEFORE THE

IDAHO PUBLIC UTILITIES COMMISSION

CASE NO. IPC-E-23-19

IDAHO POWER COMPANY

ATTACHMENT 1

Project Number 31615107 – American Falls Reservoir District No. 2, Dietrich Drop
Hydroelectric Project First Amendment Page 1 of 4
FIRST AMENDMENT
TO THE
ENERGY SALES AGREEMENT
FOR THE
DIETRICH DROP HYDROELECTRIC PROJECT

This First Amendment of the Energy Sales Agreement (“First Amendment”) is entered into on the date last executed below, by and between Idaho Power Company, an Idaho corporation (“Idaho Power”) and American Falls Reservoir District No. 2, (“Seller”), (individually a “Party” and collectively the “Parties”).
WHEREAS, Idaho Power and Seller entered into an Energy Sales Agreement on May 2, 2023, (the “ESA”) for the purchase and sale of energy from the Dietrich Drop Hydroelectric Project (the “Project”). The ESA was filed with the Idaho Public Utilities Commission (“the Commission”) on May 12, 2023; and
WHEREAS, the Parties would like to revise the ESA to (1) modify the evaluation period
for the Project’s eligibility for seasonal hydro rates, and (2) to include additional language in the ESA’s provision regarding modifications;
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties hereto agree as follows:
1. Incorporation of Recitals. The above-stated recitals are incorporated into and made a part of this Agreement, as amended, by this reference to the same extent as if these recitals were set forth in full at this point.
2. Definitions. Definition 1.40, “Seasonal Hydro Facility”, is deleted in its entirety and replaced
with:
1.40 “Seasonal Hydro Facility” – As described in Commission Order 32802, a hydroelectric generating Facility that delivers to Idaho Power total Net Energy of at least 55% of its annual Net Energy during the months June, July, and August. The annual period used for the evaluation of whether a Facility meets this requirement will be the 12 months
commencing June 1 and ending May 31 of each year.
3. Definitions. Definition 1.41, “Seasonal Hydro Facility Eligibility Test Periods,” is deleted in its entirety and replaced with:
1.41 “Seasonal Hydro Facility Eligibility Test Periods” – Beginning with the first full year (June 1 – May 31) after the Operation Date, each five (5) year (June 1- May 31)
consecutive period. If the term of this Agreement results in the last period not having a
DocuSign Envelope ID: 41C9612C-6E87-4F16-81DA-28BAFA420D87

Project Number 31615107 – American Falls Reservoir District No. 2, Dietrich Drop
Hydroelectric Project First Amendment Page 2 of 4
full five (5) years, then the last period will be equal to the time from the end of the last full five (5) year consecutive period and the expiration date of this Agreement.
4. Article III. Section 3.4, “Seasonal Hydro Facility Qualifications,” is deleted in its entirety and
replaced with:
3.4 Seasonal Hydro Facility Qualifications – Seller warrants that the Facility is a Seasonal Hydro Facility as that term is defined in paragraph 1.40 of this Agreement. After initial qualification, Seller will take such steps as may be required to maintain the Seasonal Hydro Facility status during the full term of this Agreement. Seller’s failure to achieve
Seasonal Hydro Facility status for at least three (3) years during any Seasonal Hydro Facility Eligibility Test Period will result in this Facility being reclassified as a Non-Seasonal Hydro Facility for the remaining Term of this Agreement. Idaho Power reserves the right to review the Seasonal Hydro Facility status of this Facility and associated support and compliance documents at any time during the term of this Agreement.

5. Article VII. Section 7.8.1, “Annual eligibility audits,” is deleted in its entirety and replaced with:
7.8.1 Annual eligibility audits – On or before July 15th of the year following the first full June 1 – May 31 year after the Operations Date and for every year thereafter, Idaho Power
will divide the total Net Energy received from the Facility for the months of June, July, and August by the total Net Energy received for the previous June 1 – May 31 year to establish a percentage of energy deliveries for the months of June, July and August. Any reduction in energy deliveries due to Forced Outages, planned or unplanned maintenance, Force majeure or any other reduction in energy deliveries will result in reduction of both
the numerator and the denominator in this calculation, therefore no adjustment to this calculation is required for these events. 7.8.1.1.1 If this percentage is greater than or equal to fifty-five percent (55%) it will
be deemed that the Facility has met the requirements to be classified as a Seasonal
Hydro Facility for that previous year. 7.8.1.1.2 If this percentage is less than fifty-five percent (55%), Idaho Power will provide notification to the project of the Facility’s failure to meet the Seasonal Hydro
Facility requirements for the previous year and the monthly energy payments for that
previous year will be recalculated to reflect the Non-Seasonal Hydro Facility energy prices as contained within Appendix F of this Agreement. Any overpayments will be collected from the Facility in equal monthly payments over the remaining months of the current June 1 – May 31 year. If the Facility fails to meet the Seasonal Hydro
Facility requirements for the second to last June 1 – May 31 year of the Contract Term,
then the monthly energy payments for the remaining term of the contract will be priced according to the Non-Seasonal Hydro Facility Energy Prices specified in Appendix F.
DocuSign Envelope ID: 41C9612C-6E87-4F16-81DA-28BAFA420D87

Project Number 31615107 – American Falls Reservoir District No. 2, Dietrich Drop
Hydroelectric Project First Amendment Page 3 of 4
7.8.1.3 If the Facility fails to achieve this percentage of fifty-five percent (55%) for at least three (3) years during any Seasonal Hydro Facility Eligibility Test Period the Facility will be reclassified as a Non-Seasonal Hydro Facility for the remaining term
of this Agreement and the Non-Seasonal Hydro Facility Energy Prices specified in Appendix F will replace the Seasonal Hydro Facility Energy Prices specified in Appendix E for use in all calculations in this Agreement for the remaining term of the Agreement.
6. Article 23. A new section 23.8 is added to Article 23 after the existing provision:
23.8 No modification to this Agreement shall be valid unless it is in writing and signed by both Parties and subsequently approved by the Commission.
7. Effect of Amendment. Except as expressly amended by this First Amendment, the Agreement shall remain in full force and effect.
8. Capitalized Terms. All capitalized terms used in this First Amendment and not defined herein shall have the same meaning as used in the Agreement.
9. Scope of Amendment. This First Amendment shall be binding upon and inure to the benefit of the Parties hereto, and their respective heirs, executors, administrators, successors, and assigns, who are obligated to take any action which may be necessary or proper to carry out the purpose and intent thereof.
10. Authority. Each Party represents and warrants that (i) it is validly existing and in good
standing in the state in which it is organized, (ii) it is the proper party to amend the Agreement, and (iii) it has the requisite authority to execute this First Amendment.
11. Counterparts. This First Amendment may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall constitute a single
instrument.

DocuSign Envelope ID: 41C9612C-6E87-4F16-81DA-28BAFA420D87

Project Number 31615107 – American Falls Reservoir District No. 2, Dietrich Drop
Hydroelectric Project First Amendment Page 4 of 4
IN WITNESS WHEREOF, the Parties hereto have caused this First Amendment to be
duly executed as of the date above written.

IDAHO POWER COMPANY
By: _________________________________ Name: _______________________________
Title: ________________________________
AMERICAN FALLS RESERVOIR DISTRICT NO. 2

By: _________________________________ Name: _______________________________
Title: ________________________________

DocuSign Envelope ID: 41C9612C-6E87-4F16-81DA-28BAFA420D87
Ellis Gooch
Owner
Ryan N. Adelman
VP, Power Supply

BEFORE THE

IDAHO PUBLIC UTILITIES COMMISSION

CASE NO. IPC-E-23-19

IDAHO POWER COMPANY

ATTACHMENT 2