20180103Decision Memo.pdf

DECISION MEMORANDI]M
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:CAMILLE CHRISTEN
DEPUTY ATTORNEV GENERAL
DATE: DBCEMBER 28,2017
SUBJECT:THE APPLICATION OF ROCKY MOI.JNTAIN POWER FOR
APPROVAL OF A POWER PURCHASE AGREEMENT BETWEEN
PACIFICORT AND THE CITY OF PRESTON,IDAHO;
CASE NO. PAC.E.I7.I4
On Desember27,2017, Rocky Mountain Power applied to the Commission for an
Order approving or rcjecting its Power Purchase Agreement (PPA) with the City of Preston,
Idaho. Rocky Mountain Power explains the PPA is a renewal contract with an existing 400
kilowatt hydroelectric "quali$ing facility" (QF) under the Public Utility Regulatory Policies Act
(PURPA). Application at 3. The PPA would replace an existing agreement first approved by the
Commission in 1981. /d. The existing agreement expires on December 31, 2A17. Id. at 4. The
parties understand that it may not be possible for the Commission to review and approve the new
PPA prior to the expiration of the existing agreement, and so the Company requests "that it be
permined to continue to purchase the output from the [QF] under the cunent terms and
conditions until the new [PPAJ is reviewed and approved or rejected by the Commission." Id.
The Company and the QF "have agreed that the price paid after December 31, 2017 would then
be trued-up to the price that would have been paid under the new IPPAJ, in order to hold [the
Company's] customers harmless from the extension." Id.
The proposed PPA, signed by the parties on November 30, 2017, is a replacement
contract with a 20-year term and new terms and conditions. /d. at l, 3. The Company asserts the
PPA complies with Commission Order Nos. 32697,32737, and 32802. ld. at3.
In sum, Rocky Mountain Power asks that (l) the Application be processed under
Modified Procedure; (2) the Company be allowed to continue to purchase the output of the QF
1DECISION MEMORANDUM
pumuant to the terms of the existing agreement until the Commission has reviewed and either
approved or rejected the new PPA, after which the price paid will be trucd up to the price that
would have been paid under the new PPA; (3) the Commission approve or rcject the new PPA
with the City of Preston without change or modification; and (4) the Commission "declare that
the avoided cost prices set forth in the new PPA are just and reasonable, in the public interest,
and that the Company's incurrence of such costs are legitimate expenses, all of which tlre
Commission will allow Rocky Mountain Power to recover in rates in ldaho in the event other
jurisdictions deny recovery of their proportionate share of said expenses." Id at 5.
STAFF RECOMMENDATION
Regarding the Company's requests (l), (3), and (4) above, Staffrecommends that the
application be processed by Modified Procedure, with a 2l-day comment period and a l4-day
reply period. Regarding the Company's request (2), limited Staff was available at the time of
this memo with whom to discuss this request.
COMMISSION DECISION
Does the Commission wish to issue the Notice of Application and Notice of Modified
Procedure with a 2l-day comment period, followed by a l4-day period for reply comments by
the Company? Does the Commission wish to hear further from Staff on the Company's request
that it be allowed to continue to purchase the output of the QF under the terms and conditions of
the existing agreement, with prices to be trued up after the Commission has approved or rejected
the new PPA? Does the Commission wish to address that request in is Notice of Application
and Notice of Modifred Procedure?
lr^,ril, eJAt-Ov
Camille Christen
Deputy Attorney General
I \Irf.r\ELECTRIClPAC.&lr.l.nlihffilACEI?la-Bl DE Mc6 (DtE c{.pp} ds
)DECISION MEMORANDUM