20170907notice_of_application_order_no_33869.pdf

Office of the Secretary
Service Date
September 7,2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )CASE NO.PAC-E-17-09
OF PACIFICORP DBA ROCKY )
MOUNTAIN POWER COMPANY TO )NOTICE OF APPLICATION
APPROVE ITS CAPACITY DEFICIENCY )
PERIOD FOR AVOIDED COST )NOTICE OF
CALCULATIONS )MODIFIED PROCEDURE
)
_____________________________
)ORDER NO.33869
On August 18,2017,PacifiCorp dba Rocky Mountain Power Company 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),using the
Surrogate Avoided Resource (SAR)methodology.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.lOl(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
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33869
they produce,but the capacity that they can provide to the purchasing utility.”Id.at 16.As to
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 [IRP]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 2017 IRP (Case No.PAC-E-17-03)with the Commission on April 4,2017.The Company’s
2017 IRP includes the results of its capacity balance,which is “calculated for summer peak loads
only.”Application at 3.Also,the 2017 IRP “shows that the Company first becomes capacity
deficient in 2028.”Id.
YOU ARE FURTHER NOTIFIED that Rocky Mountain identifies two factors
affecting the capacity deficit period reflected in its 2017 IRP:(1)power purchase agreements
with QFs signed since preparation of the 2017 IRP;and (2)termination of a power purchase
agreement originally included in the 2017 IRP.Id.at 4.After accounting for these factors,
Rocky Mountain states that its “capacity deficit still first occurs in the summer of 2028.”Id.
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 460 MW of nameplate capacity from nine additional QF contracts,as well as the
removal of one QF contract,thus eliminating five MW of nameplate capacity.Id.at 4-5.The
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33869 2
Company asks the Commission to approve a capacity deficiency period,for calculating SAR
based avoided cost rates,of summer 2028,
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 Commissions 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 service 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 Mountain at the addresses reflected below:
Commission Secretary Ted Weston
Idaho Public Utilities Commission Yvonne R.Hogle
P0 Box 83720 Rocky Mountain Power
Boise,ID 83 720-0074 1407 West North Temple,Ste.330
Salt Lake City,UT 84116
Street Address for Express Mail:E-mail:[e-mail]
[e-mail]
472 W.Washington Street
Boise,ID 83702-5918 Ron Scheirer
PacifiCorp
825 NE Multnomah,Ste.600
Portland,OR 97232
E-mail:[e-mail]
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
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.
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33869 3
YOU ARE FURTHER I\OT1FIED that the Company may file reply comments by no
later than 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
www.puc.idaho.gov.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 3 1.01.01.000,etseq.
ORDER
IT IS HEREBY ORDERED that the 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 service date of this Order.
IT IS FURTHER ORDERED that reply comments by Rocky Mountain Power,if any,
shall be due seven (7)days after the deadline for written comments.
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33869 4
DONE by Order of the Idaho Public Utilities Commission at Boise.Idaho this
day of September 2017.
ATTEST:
Diane M.Hanian
Commission Secretary
O:PAC-E-1 7-O9djh
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33869
4A*
KRISTINE RAPER,COMMISSIONER
-
7’
-/‘?7/
L
‘RIC ANDERSON,COMMISSIONER
5