20151020notice_of_application_order_no_33399.pdf

Office of the Secretary
Service Date
October 20,2015
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF PACIFICORP DBA )CASE NO.PAC-E-15-12
ROCKY MOUNTAIN POWER’S )
APPLICATION TO APPROVE CAPACITY )NOTICE OF APPLICATION
DEFICIENCY FOR AVOIDED COST )
CALCULATIONS )NOTICE OF
)MODIFIED PROCEDURE
)
_____________________________
)ORDER NO.33399
On October 13,2015,PacifiCorp dba Rocky Mountain Power filed an Application
asking the Commission to approve its updated capacity deficiency period for use in its avoided
cost calculations under the Public Utility Regulatory Policies Act (PURPA).The Company
asked that the Application be processed under Modified Procedure.
BACKGROUND
Under PURPA,electric utilities must purchase electric energy from qualifying
facilities (QFs)at rates approved by the applicable state regulatory agency —in Idaho,this
Commission.16 U.S.C.§824a-3;Idaho Power Co.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 purchasing utility of power which,but for the purchase of power from the QF,such
utility would either generate itself or purchase from another source.”Order No.32697 at 7,citing
Rosebud Enterprises v.Idaho PUC,128 Idaho 624,917 P.2d 781 (1996);18 C.F.R.§
292.l0l(b)(6)(defining “avoided cost”).
The Commission has established two methods of calculating avoided cost,depending
on the size of the QF project:(1)the surrogate avoided resource (SAR)methodology,and (2)
the Integrated Resource Plan (IRP)methodology.See Order No.32697 at 7-8.At issue in this
case is the SAR methodology,which the Commission uses to establish “published”avoided cost
rates.Id.Published rates are available for wind and solar QFs with a design capacity of up to
100 kilowatts (kW),and for QFs of all other resource types with a design capacity of up to 10
average megawatts (aMW).Id.
In calculating avoided cost,the Commission found it “reasonable,appropriate and in
the public interest to compensate QFs separately based on a calculation of not only the energy
they produce,but the capacity that they can provide to the purchasing utility.”Id.at 16.As to
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ORDER NO.33399
the capacity calculation,the Commission found it appropriate “to identify each utility’s capacity
deficiency based on load and resource balances found in each utility’s IRP.”Id.The
Commission elaborated:
In calculating a QF’s ability to contribute to a utility’s need for capacity.we
find it reasonable for the utilities to only begin payments for capacity at such
time that the utility becomes capacity deficient.If a utility is capacity surplus,
then capacity is not being avoided by the purchase of QF power.By including
a capacity payment only when the utility becomes capacity deficient,the
utilities are paying rates that are a more accurate reflection of a true avoided
cost for the QF power.
Id.at2l.
The Commission directed that “when a utility submits its [IRPI to the Commission,a
case shall be initiated to determine the capacity deficiency to be utilized in the SAR
Methodology.”Id.at 23.The Commission also stated “utilities must update fuel price forecasts
and load forecasts annually —between IRP filings We find it reasonable that all other
variables and assumptions utilized within the IRP Methodology remain fixed between IRP filings
(every two years).”Id.at 22.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that Rocky Mountain’s Application states it filed
its 2015 IRP (Case No.PAC-E-15-04)with the Commission on March 31,2015.The
Company’s 2015 IRP includes the results of its capacity balance which is “calculated for summer
peak loads only.”Application at 3.Also,the 2015 IRP “shows that the Company first becomes
capacity deficient in 2020.”Id.According to the 2015 IRP,“[a]vailable system capacity is
increased in the summer of 2021 with the expiration of a legacy exchange contract,and the
system falls short again in 2023.”Id.
YOU ARE FURTHER NOTIFIED that Rocky Mountain identifies three factors
affecting the capacity deficit period reflected in its 2015 IRP:(1)additional power purchase
agreements signed with QFs since preparation of the 2015 IRP;(2)termination of power
purchase agreements that were included in the 2015 IRP;and (3)changes to the Company’s load
forecast.Id.at 4.After accounting for these factors,Rocky Mountain states that its “updated
capacity deficit first occurs in the summer of 2025.”Id.
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ORDER NO.33399
YOU ARE FURTHER NOTIFIED that Rocky Mountain’s Application includes
Table 2,which shows ‘updated system capacity loads and resources.’Id.Table 2 reflects the
inclusion of 564 MW of nameplate capacity from 23 additional QF contracts,as well as the
removal of two QF contracts,thus eliminating 82 MW of nameplate capacity and roughly 12
MW of system capacity contribution.Id.at 4-5.The Company asks the Commission to approve
a capacity deficiency period,for calculating SAR based avoided cost rates,of summer 2025.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission’s Rules
of Procedure,IDAPA 31.01.01.201 through .204.The Commission notes that Modified
Procedure and written comments have proven to be an effective means for obtaining public input
and participation
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission within
twenty-one (21)days from the date of this Order.The comment must contain a statement of
reasons supporting the comment.Persons desiring a hearing must specifically request a hearing
in their written comments.Written comments concerning this Application shall be mailed to the
Commission and Rocky N ountain at the addresses reflected below:
Commission Secretary Ted Weston
Idaho Public Utilities Commission Yvonne R.Hogle
P0 Box 83720 Rocky Mountain Power
Boise,ID 83720-0074 1407 West North Temple,Suite 330
Salt Lake City,UT 84116
Street Address for Express Mail:E-mail:[e-mail]
vvonne.hogle’2i,pacificorp.com
472 W.Washington Street
Boise,ID 83702-5918 Brian Dickman
PacifiCorp
825 NE Multnomah,Suite 2000
Portland,OR 97232
E-mail:brian.di ckman(ipacificorp.corn
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission’s home page located at www.puc.idaho.gov.Click the ‘Case Comment or Question
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ORDER NO.33399 3
Form”under the “Consumers”tab,and complete the comment form using the case number as it
appears on the front of this document.These comments must also be sent to Rocky Mountain at
the e-mail addresses listed above.
YOU ARE FURTHER NOTIFIED that the Company shall file reply comments,if
necessary,no later than seven (7)days after the deadline for written comments.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set,the Commission will consider this matter on its merits and
enter its Order without a formal hearing.If written comments are received within the time limit
set,the Commission will consider them and,in its discretion,may set the same for formal
hearing.
YOU ARE FURTHER NOTIFIED that the Application has been filed with the
Commission and is available for public inspection during regular business hours at the
Commission offices.The Application is also available on the Commission’s web site at
Click on the “File Room”tab at the top of the page,scroll down to “Open
Electric Cases,”then click on the case number 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 31.01.01.000,et seq.
ORDER
IT IS HEREBY ORDERED that Rocky Mountain Power’s Application shall be
processed by Modified Procedure,IDAPA 31.01.01.201 -.204.Persons interested in submitting
written comments in this matter must do so no later than 21 days from the date of this Order.
IT IS FURTHER ORDERED that reply comments by Rocky Mountain Power,if any,
shall be due seven days after the deadline for written comments.
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DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of October 2015.
iELLADPRESIDE
MARSHA SMITI-I,COMMISSIONER
KRI INE RAPER,CO MISSIONER
ATTEST:
ewe1
mmission Secretary
O:PAC-E-15-i 2djh
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