20240103Application.pdf

DONOVAN WALKER
Lead Counsel
[e-mail]

January 3, 2024

VIA ELECTRONIC MAIL

Commission Secretary
Idaho Public Utilities Commission
11331 West Chinden Blvd., Building 8
Suite 201-A
Boise, Idaho 83714

Re: Case No. IPC-E-24-01
Idaho Power Company’s Application for Approval of a Power Purchase
Agreement with PVS 2, LLC

Dear Commission Secretary:

Attached for electronic filing is Idaho Power Company’s Application in the above-
entitled matter. If you have any questions about the attached documents, please do not
hesitate to contact me.

Very truly yours,

Donovan Walker

DEW:cd
Enclosures
RECEIVED
Wednesday, January 3, 2024 3:05:12 PM
IDAHO PUBLIC
UTILITIES COMMISSION

CERTIFICATE OF ATTORNEY

ASSERTION THAT INFORMATION CONTAINED IN AN IDAHO PUBLIC UTILITIES
COMMISSION FILING IS PROTECTED FROM PUBLIC INSPECTION

Idaho Power Company’s Application for Approval of a Power Purchase
Agreement with PVS 2, LLC

Case No. IPC-E-24-01

The undersigned attorney, in accordance with Commission Rules of Procedure 67,
believes that the Attachment No. 1 to Idaho Power Company’s Application, dated January
3, 2024, may contain information that Idaho Power Company and a third party claims is
a confidential trade secret and/or business records of a private enterprise required by law
to be submitted to or inspected by a public agency as described in Idaho Code § 74-101,
et seq., and/or § 48-801, et seq. As such, it is protected from public disclosure and exempt
from public inspection, examination, or copying.

DATED this Wednesday, January 3, 2024,

Donovan Walker
Counsel for Idaho Power Company

APPLICATION - 1
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]

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 PVS 2, LLC.
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CASE NO. IPC-E-24-01

APPLICATION

Idaho Power Company (“Idaho Power” or “Company”), in accordance with
Commission Rule of Procedure1 52 and Idaho Code §§ 61-502 and 61-503, hereby
requests that the Idaho Public Utilities Commission (“Commission”) issue an order
approving the 20-year Power Purchase Agreement (“PPA”) between Idaho Power and
PVS 2, LLC (“PVS 2” or “Seller”) 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, as amended, that was approved
by the Commission in Order Nos. 35777 and 35958 issued in Case No. IPC-E-21-42.
Idaho Power’s Application is based on the following:

1 Hereinafter cited as RP.
APPLICATION - 2
I. BACKGROUND AND BRISBIE SPECIAL CONTRACT
1. Brisbie is developing a new data center facility at which it anticipates energy
requirements will exceed the threshold for service under Schedule 19, Large Power
Service, necessitating special contract arrangements with the Company.2 In addition to
having large load service requirements in excess of 20 megawatts (“MW”), Brisbie and
its parent company, Meta Platforms, Inc. (“Meta”), have a sustainability objective to
support 100 percent of its operations with new renewable resources, which will require
Idaho Power to add new renewable resources to its system.
2. As such, the Company and Brisbie entered into a Special Contract
Agreement dated December 22, 2021, and First Amendment thereto dated August 3,
2023, also referred to as the Brisbie Special Contract or Energy Services Agreement
(“Brisbie ESA”). To facilitate its sustainability objective, Brisbie’s ESA encompasses the
pricing associated with retail electric service from Idaho Power as well as cost and credit
components associated with new renewable resources to support Brisbie’s load, and
terms and conditions governing the structure of this new arrangement, including
provisions that will hold other Idaho Power customers harmless.
3. To accomplish its 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, which is not well aligned with the intermittent nature of

2 See I.P.U.C. No. 29, Tariff No. 101, Schedule 19 (requiring customers with an aggregate power
requirement of more than 20,000 kW at the same premises “make special contract arrangements with the
Company.”)
APPLICATION - 3
renewable resources (e.g., solar only generates electricity during daylight hours). To
reconcile this mismatch of energy service requirements and renewable generation but
still achieve Brisbie’s sustainability 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.
4. Under the regulatory framework contemplated by the Brisbie ESA, the
renewable resources are to be procured on the customer’s behalf by Idaho Power and
connected directly to the Company’s transmission system. Brisbie will pay for the costs
associated with the renewable resources required to support their load and will also be
credited for the value those resources bring to Idaho Power’s system. The Brisbie ESA
also requires for each Renewable Resource PPA that Brisbie will provide security
designed to secure any above-market costs associated with each Renewable Resource
PPA in the event of non-performance by Brisbie. Brisbie’s supporting renewable
resources have been factored into portfolio modeling for the Company’s 2023 Integrated
Resource Plan (“IRP”) (presumed to be solar resources for purposes of this analysis).
Inclusion of the renewables in the IRP modeling allows them to be treated as system
resources for modeling purposes and enables Idaho Power to quantify their value to the
Company and its broader customer base.
5. Pursuant to Article 7 of the Brisbie Special Contract, either Brisbie or Idaho
Power may solicit and present Renewable Resource Projects either from third-party
developers or as Idaho Power owned resources for negotiation and procurement to meet
Brisbie’s load under the ESA. Renewable Resource PPAs procured under the ESA shall
be substantially in the form of the aspirational renewable resource PPA provided as
Exhibit 6.2(a) to the ESA. The PVS 2 PPA is based upon this template as modified based
APPLICATION - 4
on Staff’s recommendations in prior cases.
6. The Brisbie ESA is consistent with and reflects the regulatory framework set
forth in the Clean Energy Your Way - Construction option, as approved by the
Commission in Order Nos. 35893 and 35950 in Case No. IPC-E-21-40, as well as the
Micron Energy Services Agreement (“Micron ESA”), which was approved by the
Commission in Order Nos. 35735 and 35898 in Case No. IPC-E-22-06.
II. PVS 2 PPA
7. On December 5, 2023, Idaho Power and PVS 2 entered into a PPA for the
sale and purchase of 125 MW of renewable solar electric generation for a term of twenty
years from the Commercial Operation Date, scheduled to be December 31, 2026. Under
the terms of the PPA, PVS 2 will build, own, operate, and maintain a 125 megawatt
alternating current (“AC”) solar photovoltaic generation facility (“Renewable Resource” or
“Facility”) and will supply the output to Idaho Power’s system. Brisbie is identified in the
PPA as a third-party beneficiary receiving Net Output and Green Tags generated by the
Renewable Resource. 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.
8. The PVS 2 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 recent non-PURPA power purchase
agreements approved by the Commission including the Black Mesa PPA stemming from
the Micron ESA that was approved in Order No. 35482 in Case No. IPC-E-22-06.
APPLICATION - 5
9. Most significantly, the PVS 2 PPA is substantially similar to the Pleasant
Valley PPA, as amended, that was also entered into pursuant to the Brisbie Special
Contract and approved in Order No. 35739 in Case No. IPC-E-22-29. The PVS 2 PPA
incorporates the provisions recommended by Staff in Case No. IPC-E-22-29, as
implemented by the First Amendment to the Pleasant Valley PPA in that case, and other
minor changes negotiated by the parties.
10. The PVS 2 PPA provides for a Scheduled Commercial Operation Date of
December 31, 2026, at Section 1.123, and sets forth a Guaranteed Commercial
Operation Date as 180 days after the Scheduled Operation Date under Section 1.54.
Under the PPA, Idaho Power will receive 100 percent of the Green Tags or Environmental
Attributes associated with the Facility, which will be claimed by Brisbie pursuant to the
Special Contract.
11. Section 3.1 provides that the PVS 2 PPA can be terminated by Idaho Power
if it has not received Commission approval of all the PPA's terms and conditions and
declared that all payments Idaho Power makes to Seller for purchases of energy will be
allowed as prudently incurred expenses for ratemaking purposes. This section further
provides that if Commission approval 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
approval is obtained. In the event Idaho Power has not obtained all regulatory approvals
deemed appropriate by the Company by the first anniversary of the filing of the PPA with
the Commission, then either party has the right to terminate the Agreement.
12. Section 7 of the PVS 2 PPA contains standard provisions for operation and
control of the project. These include such things as planned outages, forced outages, and
APPLICATION - 6
maintenance outages, as well as scheduling, forecasting, generator output limit control
(“GOLC”), and metering. For forecasting, the PPA provides the same allocated portion of
the total cost of Idaho Power's Solar Energy Production Forecast model that is used for
all solar projects that are under contract to provide energy to Idaho Power.
13. Section 7.12 of the PVS 2 PPA also contains a performance requirement in
the form of an Output Guarantee. Under the Output Guarantee, the Seller is obligated to
deliver 90 percent of the Estimated Net Output Amount of the Facility on a monthly basis.
Similar to the provisions included in recent PURPA agreements, Section 7.12.1.2 of the
PPA allows the Seller an adjustment of Estimated Monthly Net Output Amounts by the
25th day of the preceding month. If the project delivers less than the Output Guarantee
during any month, the Seller must pay the Output Shortfall for that month multiplied by
Idaho Power's Cost to Cover as liquidated damages in Section 7.12.2.2-3. If the delivered
Net Output is equal to or greater than the Output Guarantee, then the Seller is deemed
to have satisfied the Output Guarantee in Section 7.12.2.1.
14. Section 9 of the PPA contains provisions requiring the Seller to post and
maintain both Facility Development Security and Default Security. Facility Development
Security, in a form acceptable to Idaho Power equal to $90,000 per MW of Nameplate
Capacity Rating, must be in place within 30 days of a final order of the Commission
approving the PPA and 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 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
APPLICATION - 7
or for any other damages Idaho Power suffers if the Agreement is terminated because of
the Seller's Default.
III. MODIFIED PROCEDURE
15. Idaho Power believes that a hearing is not necessary to consider the 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, et seq.
Additionally, the PVS 2 PPA needs to be online in coordination with Brisbie’s load service
by the Scheduled Commercial Operation Date of December 31, 2026, and the developer
of the PVS 2 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 for day-for-day extension of
the December 31, 2026, Scheduled Commercial Operation Date if Commission approval
of the PPA is not obtained by July 3, 2024. Consequently, Idaho Power respectfully
requests the Commission consider a procedural schedule that would allow for a final
Order prior to July 3, 2024.
IV. COMMUNICATIONS AND SERVICE OF PLEADINGS
16. 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
Idaho Power Company Idaho Power Company
1221 West Idaho Street (83702) 1221 West Idaho Street (83702)
P.O. Box 70 P.O. Box 70
Boise, Idaho 83707 Boise, Idaho 83707
[e-mail] [e-mail]
[e-mail] [e-mail]
[e-mail]

APPLICATION - 8
V. CONCLUSION
17. Approval of the PVS 2 PPA is in the public interest. Idaho Power and Brisbie
have worked together to establish a framework that will take a meaningful step 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 PVS 2 PPA will be paid for by Brisbie, which ensures
other customers are not harmed by the arrangement. The rates are just, reasonable,
consistent with past cost-of-service determinations, and in the public interest.
18. THEREFORE, Idaho Power respectfully requests that the Commission
issue an Order prior to July 3, 2024 approving the 20-year PPA between Idaho Power
and PVS 2, which was negotiated with the expectation of assigning 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 3rd day of January 2024.

DONOVAN E. WALKER
Attorney for Idaho Power Company

BEFORE THE

IDAHO PUBLIC UTILITIES COMMISSION

CASE NO. IPC-E-24-01

IDAHO POWER COMPANY

ATTACHMENT 1

ATTACHMENT 1
IS CONFIDENTIAL AND WILL BE PROVIDED TO THOSE PARTIES THAT EXECUTE
THE PROTECTIVE AGREEMENT IN THIS MATTER