20110713Comments.pdf

KRISTINE A. SASSER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BARNO. 6618
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Lnii JUL 13 PM l: 51
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorneys for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF PACIFICORP DBA ROCKY MOUNTAIN
POWER FOR APPROVAL OF A REVISED
POWER PURCHASE AGREEMENT
BETWEEN PACIFICORP AND LOWER
VALLEY ENERGY, INC.
)
) CASE NO. PAC-E-1l-15
)
)
) COMMENTS OF THE
) COMMISSION STAFF
)
COMES NOW the Staff of the Idaho Public Utilities Commission, by and though its
Attorney of record, Kristine A. Sasser, Deputy Attorney General, submits the followìng comments
in response to the Notice of Application and Notice of Modified Procedure issued on June 23, 2011,
Order No. 32269.
BACKGROUND
On May 19,2011, PacifiCorp dba Rocky Mountain Power fied a request with the
Commission to amend the Power Purchase Agreement (PPA, Agreement) between PacifiCorp and
Lower Valley Energy, Inc. (Lower Valley) dated May 6, 2011. On June 17,2011, PacifiCorp fied
a supplement to its original request. The paries seek to amend the Agreement originally approved
by the Commission on July 16,2009. Order No. 30864.
Lower Valley owns, operates and maintains three run of the river hydroelectric generating
facilties in Lincoln County, Wyoming - two are located on Swìft Creek and one is located on the
existing culinar water system for the town of Afton. The Swift Creek facilties were completed in
STAFF COMMENTS 1 JULY 13,2011
2009 and have maximum capacities of 940 kW (the "Upper Facilty") and 535 kW (the "Lower
Facilty"). The third facilty - the "Culinar Facilty" - is the subject ofPacifiCorp's request for an
amendment. The project wìll be a "qualifying facility" (QF) under the applicable provisions of the
federal PURP A.
The Culinar Facilty was completed in December 2010, and has a maximum capacity of
225 kW. PacifiCorp represents that Lower Valley purchases firm point-to-point transmission from
Bonnevile Power Administration (BP A) in amounts suffcient to deliver output from all three
facilities via a single scheduled delivery to PacifiCorp at Goshen, Idaho.
PacifiCorp requests Commission approval of amendments to the Agreement to: (1) add a
provision for the purchase of net output from the new Culinar Facilty; (2) extend the term of the
Agreement from May 1,2012 to September 1,2014; (3) provide that the Culinar Facilty receive
the published avoided cost rates of Order No. 32234 i; and (4) provide that the "Upper Facility" and
"Lower Facilty" receive the published avoided cost rates of Order No. 32234 commencing on May
1, 2012, the expiration date of the existing Agreement.
Various requirements have been placed on Lower Valley in order for PacifiCorp to accept
energy deliveries from the Culinar Facilty. PacifiCorp states that it wil monitor Lower Valley's
compliance with these requirements. ¡d. at 5. Lower Valley has selected seven days after
Commission approval of the Agreement as its Commercial Operation Date for the Culinar Facilty.
STAFF ANALYSIS
The primar purpose of PacifiCorp's request to amend the Agreement is to accommodate the
addition of a third generation facility, the "Culinary Facilty," under a single power sales agreement.
Although each facilty is a separate QF pursuant to PURP A, Lower Valley intends to operate its
Upper Facilty, Lower Facility and Culinary Facilty as a single generating facilty under a single
power purchase agreement. PacifiCorp and Lower Valley represent that purchasing and sellng
power for all three facilities under a single PP A is the most effcient means of effectuating the sale
and delivery of net output from these facilties for two reasons: (l) the use of one Agreement
reduces costs in generating monthly statements and processing monthly payments for both
PacifiCorp and Lower Valley and (2) because Lower Valley delivers net output from the three
i Order No. 32234 revised PacifiCorp's published avoided cost rates pursuant to a change in cost of capital triggered by
the result ofPacifiCorp's most recent general rate case, PAC-E-lO-07.
STAFF COMMENTS 2 JULY 13,2011
facilities via a single point-to-point transmission reservation, the three projects arrive at
PacifiCorp's system via a single schedule that is amenable to treatment by PacifiCorp as a single
resource. Supplement at 4.
Because all of the terms contained in the Amended Agreement are identical to those in the
original Agreement, Staff believes that the avoided cost rates in the Amended Agreement are the
only thing that merits scrutiny. Rates for the existing Upper and Lower Facilties remain unchanged
from those contained in the original Agreement for the remaining term of the original four-year
Agreement. However, the proposed Amendment extends the term of the original Agreement by 28
months, therefore, rates for the Upper and Lower Facilties for the extended term wìll be in
accordance with Order No. 32234, PacifiCorp's most recently approved avoided cost rates. The
Culinary Facility is also eligible for PacifiCorp's current published avoided cost rates from Order
No. 32234. Staff believes that all of the rates in the Amended Agreement are proper given the
difference in time between the online dates of the three generation facilties. The new Culinar
Facilty wil be entitled to new rates, while the Upper and Lower Facilties wil stil be bound by the
old rates until the expiration date of the original Agreement.
The Commission recently limited the published avoided cost rate eligibilty of wind and
solar QFs to facilties of 100 kW or less in Order No. 32176. As ru-of-river hydroelectric
facilties, none of the Facilties in this Amended Agreement are subject to the 100 kW eligibilty
cap.
STAFF RECOMMENDATION
Staff recommends that the Commission approve the second amendment to the power
purchase agreement between PacifiCorp and Lower Valley Energy as submitted.
Respectfully submitted this ¡3:i day of July 2011.
~.. (1. &o42A
. stine A. Sasser
Deputy Attorney General
Technical Staff: Rick Sterling
i:umisc:commentspace i i. i Sksrps comments
STAFF COMMENTS 3 JULY 13,2011
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 13TH DAY OF JULY 2011,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. PAC-E-11-15, BY MAILING A COpy THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
TED WESTON
ID REGULATORY AFFAIRS MGR
ROCKY MOUNTAIN POWER
201 S MAIN ST STE 2300
SALT LAKE CITY UT 84111
E-MAIL: ted.weston~pacificorp.com
DANIEL E SOLANDER
REGULATORY COUNSEL
ROCKY MOUNTAIN POWER
201 S MAIN ST STE 2300
SALT LAKE CITY UT 84111
E-MAIL: daniei.solander~pacificorp.com
DATA REQUEST RESPONSE CENTER
E-MAIL ONLY:
datareguest~pacificorp.com
SECRE~~
CERTIFICATE OF SERVICE