20150318notice_of_hearing_order_no_33253.pdf

Office of the Secretary
Service Date
March 18,2015
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY’S PETITION TO MODIFY )CASE NO.IPC-E-15-Ol
TERMS AND CONDITIONS OF PURPA )
PURCHASE AGREEMENTS )
_______________________________________________________________________________
)
IN THE MATTER OF AVISTA )
CORPORATION’S PETITION TO MODIFY )CASE NO.AVU-E-15-O1
TERMS AND CONDITIONS OF PURPA )
PURCHASE AGREEMENTS )
______________________________________________________________________________________
)
IN THE MATTER OF ROCKY MOUNTAIN )
POWER COMPANY’S PETITION TO )CASE NO.PAC-E-15-03
MODIFY TERMS AND CONDITIONS OF )
PURPA PURCHASE AGREEMENTS )NOTICE OF SCHEDULING
)
)NOTICE OF
)TECHNICAL HEARING
)
______________________________
)ORDER NO.33253
On January 30,2015,Idaho Power Company filed a Petition to reduce the length of
the contracts under which electric utilities must purchase energy generated by qualifying
facilities (QFs)pursuant to the Public Utility Regulatory Policies Act (PURPA).The
Commission issued a Notice of Petition setting a February 20,2015 deadline for petitions to
intervene.Order No.33222.The Commission also granted interim relief,temporarily reducing
Idaho Power’s PURPA contract lengths from 20 years to five years pending further order.Id.
On February 27,2015,Avista Corporation petitioned for the same temporary and
permanent relief granted Idaho Power.Rocky Mountain Power Company filed a petition seeking
similar relief on March 2,2015.On March 13,2015,the Commission issued Order No.33250
consolidating the Avista and Rocky Mountain Petitions with the Idaho Power case.In that
Order,the Commission set a new deadline of March 27,2015,for petitions to intervene in the
consolidated matter.Id.
BACKGROUND
The Utilities in this consolidated case seek to modify the length of their contracts
entered under PURPA.That Act requires electric utilities to purchase electric energy from QFs
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ORDER NO.33253
at rates approved by the applicable state regulatory agency —in Idaho,this Commission.16
U.S.C.§824a-3;Idaho Power v.Idaho PUC,155 Idaho 780,789,316 P.3d 1278,1287 (2013).
The purchase or “avoided cost”rate shall not exceed the “incremental cost”to the utility,defined
as the cost of energy which,“but for the purchase from [the QF],such utility would generate or
purchase from another source.”16 U.S.C.§824a-3(d);18 C.F.R.§292.101(6)(defining
“avoided cost”).
This Commission has established two methods for calculating avoided cost,
depending on the size of the QF project:(1)the surrogate avoided resource (SAR)methodology
(used to calculate “published rates”),and (2)the Integrated Resource Plan (IRP)methodology.
See Order No.32697 at 7-8.The SAR methodology applies to wind and solar QFs with a design
capacity of up to 100 kilowatts (kW),or up to 10 average megawatts (aMW)for QFs of all other
resource types.Id.In other words,the “eligibility cap”for published rates for wind and solar
QFs is 100 kW and the cap for all other QF projects is 10 aMW.The IRP methodology applies
to any QF with a design capacity above the eligibility cap for published rates.Id.The purpose
of utilizing a different methodology for larger projects is to more precisely value the energy by
recognizing the different generation characteristics of each large project.Order Nos.32697 at 2;
32176.
PURPA,and regulations implementing the Act,are silent as to contract length;
consequently,the issue is in the Commission’s discretion.See A/ton Energy v.Idaho Power,107
Idaho 781,785-86,693 P.2d 427,43 1-32 (1984);Idaho Power,155 Idaho at 782,316 P.3d at
1280.On February 5,2015,the Commission granted Idaho Power interim relief by reducing the
length for PURPA contracts from 20 years to five years,pending further order.Order No.33222
at 4,6.
THE PREHEARING CONFERENCE
Consistent with Order No.33222,an informal prehearing conference was held on
March 10,2015.The prehearing conference was attended by all the parties granted intervention
to date except for Amalgamated Sugar.At the prehearing conference,the parties discussed the
pending Petition and Cross-Petitions to Clarify Order No.33222,and developed a schedule for
processing this consolidated proceeding.
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ORDER NO.33253
A.The Petitions to aarjfy
Various parties in the Idaho Power case filed a total of four Petitions or Cross-
Petitions to Clarify Commission Order No.33222.These Petitions can be divided into two sets.
Each set is discussed in greater detail below.
1.Petition and Cross-Petition to aarfy by Intermountain Energy Partners and
Renewable Energy Coalition
Idaho Power stated on pages 1-2 of its Petition that its request to reduce PURPA
contract length is “limited to transactions with proposed QF projects that exceed the published
rate eligibility cap.”However,in its “Prayer for Relief’on page 36,the Company characterized
its requested relief as an Order “directing that the maximum required term for any Idaho Power
PURPA [contract)be reduced from 20 years to two years.”(Emphasis added.)Order No.
33222,granting interim relief,did not specify the type of PURPA contracts (e.g.,SAR or IRP)to
which the five-year interim relief applied.
On February 18,2015,Intermountain Energy Partners (IEP)petitioned for
clarification of Order No.33222 under Rule 325.That rule allows any person to file a petition
“to clarify any order,whether interlocutory or final.”IDAPA 3 1.01.01.325.In its Petition,JEP
addresses the ambiguity of granting interim relief to gy Idaho Power PURPA contract,where
Idaho Power’s request for relief was purportedly aimed at reducing the contract length for large
QF projects that exceed the published rate eligibility cap.See IEP Petition at 2.IEP suggested
that the Commission clarify its Order by adding the following language:
IT IS HEREBY ORDERED that...the maximum contractual term for Idaho
Power’s new PURPA contracts shall be five years,provided however this
Order shall not apply to proposed OF projects that do not exceed the
published rate eligibility cap.
IEP Petition at 1 (proposed language underlined).
The Cross-Petition for Clarification by Renewable Energy Coalition (REC)concurs
with IEP’s Petition.’See REC Cross-Petition.REC’s Cross-Petition also observed that,in a
discovery response dated February 24,2015,Idaho Power conceded that its requested interim
relief “is limited to transactions with proposed QF projects that exceed the published rate
eligibility cap.”Resp.No.1 to Simplot,citing Idaho Power Petition at 1-2.At the prehearing
The Commission has also received a Petition to Intervene and Joinder in Petitions to Clarify by AGPower DCD,
LLC and AGPower Jerome,LLC,which agrees with IEP’s and REC’s Petitions.
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conference,all parties agreed that the Commission should clarify its Order to say that the five-
year interim relief should not apply to QF contracts that are eligible for published avoided cost
rates (i.e.,SAR-based PURPA contracts).
Commission Findings:After reviewing IEP’s and REC’s Petitions,Idaho Power’s
initial Petition and interrogatory response,and our prior Order No.33222 we grant the IEP and
REC Petitions.We find it just and reasonable that the temporary five-year term limit not apply
to new PURPA contracts eligible for published rates.We thus clarify Order Nos.33222 and
33250 such that the interim relief granted to Idaho Power,Avista and Rocky Mountain applies to
new PURPA contracts in excess of the published rate eligibility cap.Idaho Code §6 1-624.
2.Cross-Petition for Ciaqfication by Qearwater Paper and Simplot
On February 25,2015,Clearwater Paper and Simplot also filed a Cross-Petition for
Clarification that differed from the prior Petitions discussed above.Clearwater and Simplot
proposed that the five-year term limit in Order No.33222 should apply to only “new intermittent
solar and wind projects exceeding 100 kW.”Clearwater Cross-Petition at 3-4.In their Cross
Petition,Clearwater and Simplot argue that this limitation should apply because Idaho Power’s
initial Petition highlights the dramatic increase in “predominantly wind,and now,solar,QF
projects coming on-line and under contract.”Id.at 2-3.They maintain that “there is no record
suggesting a need to reduce the maximum contract length for any type of resource other than
wind and solar.”Id.at 5.
Their Cross-Petition and proposed language were discussed at the March 10
prehearing conference.The parties reached no consensus.However,the parties agreed to
recommend that the Commission set a March 19,2015 deadline for responses to the Cross-
Petition,and a March 26,2015 deadline for Clearwater’s and Simplot’s reply.
Commission Findings:We adopt the proposed schedule for responses and reply,as
agreed by the parties.The schedule will allow parties to fully address the Cross-Petition and
provide a record upon which the Commission can decide this issue.
NOTICE OF INTERVENTION
YOU ARE HEREBY NOTIFIED that AgPower DCD,LLC and AgPower Jerome,
LLC (collectively “AgPower”)filed a Petition to Intervene out-of-time in the Idaho Power case
on March 6,2015.The Commission has received no written objections to this Petition to date.
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ORDER NO.33253 4
Consequently,we grant late intervention to AgPower conditioned upon AgPower’s acceptance of
the schedule below and that they not unduly broaden the issues.Rule 73,IDAPA 31.01.01.073.
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YOU ARE FURTHER NOTIFIED that,based on discussion and agreement between
the parties,the Commission adopts the following procedural schedule:
April 23,2015 Staff/Intervenors file direct testimony
May 14,2015 Staff/Intervenors file rebuttal testimony
June 11,2015 Petitioners file rebuttal testimony
YOU ARE FURTHER NOTIFIED that the parties shall serve discovery,testimony,
and exhibits among themselves by electronic mail pursuant to Rule 63,IDAPA 31.01.01.063.
The parties have also agreed to expedite discovery between April 23 and May 14,2015.The
parties shall service the Commission Secretary with one printed copy of all discovery requests
and responses.
NOTICE OF TECHNICAL HEARING
YOU ARE FURTHER NOTIFIED that the Commission will conduct a technical
hearing in this matter,on MONDAY,JUNE 29,2015,COMMENCING AT 9:30 A.M.IN
THE COMMISSION’S HEARING ROOM,472 WEST WASHINGTON,BOISE,IDAHO
and continuing as necessary through Wednesday,July 1,2015.Parties shall present their
witnesses,prepared testimony and exhibits at the technical hearing.Rule 241 .04.a,IDAPA
31.Ol.01,241.04.a.Exhibit numbers are assigned to each party in the Notice of Parties issued by
the Commission.
YOU ARE FURTHER NOTIFIED that the dates,times,and locations of the
customer hearings will be detailed in a subsequent Order.
YOU ARE FURTHER NOTIFIED that all hearings in this matter will be held in
facilities meeting the accessibility requirements of the Americans with Disabilities Act (ADA).
Persons needing the help of a sign language interpreter or other assistance in order to participate
in or to understand testimony and argument at a public hearing may ask the Commission to
provide a sign language interpreter or other assistance at the hearing.The request for assistance
must be received at least five (5)working days before the hearing by contacting the Commission
Secretary at:
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ORDER NO.33253 5
IDAHO PUBLIC UTILITIES COMMISSION
P0 BOX 83720
BOISE,IDAHO 83 720-0074
[phone] (Telephone)
[phone] (FAX)
E-Mail:[e-mail]
YOU ARE FURTHER NOTIFIED that all testimony and exhibits in Case Nos.IPC
E-15-01,AVU-E-15-0l,and PAC-E-15-03 must comport with the requirements of Commission
Rules 61,231,and 267.IDAPA 31.01.01.061,.231,.267.Consistent with Rule 61.01.a,iii.,
parties shall file an original (unbound and unstapled)and nine copies of all testimony and
exhibits with the Commission Secretary on the dates such documents are due.One of the nine
copies shall be marked as “reserved”for the court reporter and shall be unbound,unpunched and
on plain single-sided paper.
YOU ARE FURTHER NOTIFIED that the record in this matter is available for
public inspection during regular business hours at the Commission offices.The record is
available on the Commission’s web site at www,puc.idaho.gov.Click on the “File Room”tab at
the top of the page,scroll down to “Open Electric Cases,”and then click on the case numbers as
shown on the front of this document.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission’s jurisdiction under Title 61 of the Idaho Code and the Public Utility
Regulatory Policies Act of 1978 (PURPA).The Commission has authority under PURPA and
the implementing regulations of the Federal Energy Regulatory Commission (FERC)to set
avoided costs,to order electric utilities to enter into fixed-term obligations for the purchase of
energy from qualified facilities and to implement FERC rules.The Commission may enter any
final Order consistent with its authority under Title 61 and PURPA.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission’s Rules of Procedure,IDAPA 3 1.01.01.000,etseq.
ORDER
IT IS HEREBY ORDERED that Intermountain Energy Partners’Petition for
Clarification and Renewable Energy Coalition’s Cross-Petition for Clarification are GRANTED.
We clarify that the five-year interim relief granted to Idaho Power in Order No.33222,and
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ORDER NO.33253 6
granted to Avista and Rocky Mountain in Order No.33250,applies only to the Utilities’new
PURPA contracts that exceed the published rate eligibility cap.Idaho Code §61-624.
IT IS FURTHER ORDERED that responses to Clearwater Paper and Simplot’s
Cross-Petition for Clarification shall be due March 19,2015,and any reply shall be due March
26,2015.
IT IS FURTHER ORDERED that the Commission adopts the schedule for prefiling
direct and rebuttal testimony as set forth in the body of this Order.Parties shall conform to the
schedule set out above.Parties shall also comply with the discovery and filing procedures set
out above.
IT IS FURTHER ORDERED that a technical hearing will commence in this matter
on Monday,June 29,2015,at 9:30 a.m.in the Commission’s Hearing Room,and continue as
necessary through Wednesday,July 1,2015.
IT IS FURTHER ORDERED that AgPower DCD,LLC and AgPower Jerome,LLC’s
Petition to Intervene is granted.
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ORDER NO.33253 7
DONE by Order of the Idaho Public Utilities Commission at Boise.Idaho this I
day of March 2015.
ATTEST:
,COSTONERKRIFINERAPER
Commission Secretary
O:IPC-E-I 5-0 1 AVU-E-I 5-01 PAC-E-I 5-O3djh2
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ORDER NO.33253 8