20200608Application.pdf

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1407 W. North Temple, Suite 330
Salt Lake City, Utah 84116
June 8,2020
VIA ELECTRONIC FILING
Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
1131 W. ChindenBlvd
Building 8 Suite 20lA
Boise,lD 83714
Re: CASE NO. PAC-E-20-09
IN THE MATTER OF THE APPLICATION FOR APPROVAL OF THE POWER
PURCHASE AGREEMENT BETWEEN PACIFICORP AI\D COMMERCIAL
ENERGY MANAGEMENT, INC.
Dear Ms. Hanian:
Please find enclosed for filing Rocky Mountain Power's Application in the above-referenced
matter
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
J R.
Vice-President of Regulation
Enclosures
Adam Lowney (158#10456)
McDowell Rackner Gibson PC
419 SW llthAvenue, Suite 400
Portland, OR 97205
Telephone: [phone]
Fax: [phone]
Email: [e-mail]
BEF'ORE THE IDAHO PI]BLIC UTILITIES COMMISSION
rN THE MATTER OF THE APPLTCATION ) CASE NO. PAC-E-20-09
FORAPPROVAL OF TIIE POWER )
PURCHASE AGREEMENT BETWEEN ) APPLICATION OF
PACIFICORPAND COMMERCIAL ) ROCKY MOI'NTAIN POWER
ENERGY MANAGEMENT, INC. )
)
Comes now, Rocky Mountain Power, a division of PacifiCorp, ("CompffiY"), and hereby
respectfully requests, pursuant to RP 52 and the applicable provisions of the Public Utility
Regulatory Policies Act of 1978 ("PURPA"), that the Idaho Public Utilities Commission,
("Commission"), issue an order approving or rejecting the amendment to extend for nine months
the Power Purchase Agreement ("Amendment") between PacifiCorp and the Commercial Energy
Management, Inc., ("Seller") dated March 19, 2020. In support of this Application, Rocky
Mountain Power states as follows:
L INTRODUCTION
L Rocky Mountain Power provides electric service to retail customers in the states of
Idaho, Wyoming, and Utah. Rocky Mountain Power is a public utility in the state of Idaho and is
subject to the Commission's jurisdiction with respect to its prices and terms of electric service to
retail customers pursuant to Idaho Code 6l-129. Rocky Mountain Power provides retail electric
service to approximately 84,000 customers in the state of ldaho.
Page I
2. Seller owns, operates, and maintains a small hydro-electric power plant located in
Bannock County, Idaho with a nameplate capacity rating of 900 kilowatts (the "Facility"). Seller
operates the Facility as a Qualiffing Facility ("QF") under the applicable provisions of PURPA.
3. Sections 201 and 210 of PURPA, and pertinent regulations of the Federal Energy
Regulatory Commission ("FERC") require that regulated electric utilities purchase electricity
produced by co-generators or small power producers that obtain QF status. The rate a QF receives
for the sale of its electricity is generally referred to as the avoided cost and must reflect the
incremental cost to an elecfic utility of electric energy or capacity or both, which, but for the
purchase from the QF, such utility would generate itself or purchase from another source. The
Commission has authority under PURPA, Sections 201 and 210 and FERC regulations, 18 C.F.R.S
292,to set avoided costs, order electric utilities to enter into fixed-term obligations for the purchase
of electricity from QFs, and implement FERC rules.
4. On December 18, 2012, the Commission issued Order No. 32697, which
established parameters for published and negotiated avoided cost rate calculations. The
Commission fuither established and defined numerous contact terms and conditions for standard
purchase power agreements ("PPA") entered into between regulated utilities and QFs. On January
2,2013, the Commission issued an Errata to Order No .32697, which corrected published avoided
cost rates to include energy payments not discounted by transmission and line loss. Subsequently
the Commission issued reconsideration Orders Nos. 32737 and 32802 on February 5, 2013 and
May 5, 2013, respectively, which further clarified certain terms and conditions of PPAs. The energy
service agreement ("ESA") contains published rates for projects of l0 average megawatts
("aMW") or less pursuant to Commission Order No. 34350. The Facility is an existing QF that is
seeking a replacement agreement. The replacement ESA contains capacity payments for the entire
Page2
term of the Amendment, with no suffrciency period. See Order No. 32697 at 2l-22, Order No.
32737 at 5, and Order No. 32871. Pursuant to the Commission's direction in its Reconsideration
Order No. 32737, the rates were calculated by Commission Staff for a QF in the "non-seasonal
hydro" category based on the surrogate avoided resource avoided cost methodology.
II. THE AMENDMENT TO THE POWER PURCHASE AGREEMENT
5. The Seller's current PURPA contract is dated November 21, 1991. The current
PURPA contract was entered into prior to PacifiCorp's separation of its energy supply and
transmission functions as required by federal law and regulations. For this reason, the contract
includes provisions that address both energy sales and interconnection requirements. The current
contract was scheduled to expire on May 31,2020, and the Seller expressed a desire to continue
to make sales from the Facility to PacifiCorp consistent with the requirements of PURPA as
implemented in the State of Idaho. The Seller has demonstrated to PacifiCorp that the Facility
remains a QF as defined by PURPA and as implemented in the State of Idaho. The Seller and
PacifiCorp are in the process of securing a new stand-alone interconnection agreement that, once
executed and all distribution system upgrades are constructed and in-service, will replace the
interconnection provisions in the current PURPA contract. During the period that the necessary
distribution system upgrades are being completed, PacifiCorp and the Seller have agreed to a
limited extension to the term of the current PURPA contract, with updated pricing for energy sales
during the extended term. The extension of the term is from June l, 2020, through
February 28,2021, and total nameplate capacity of the facility remains unchanged at 900 kW.
6. The Seller has demonstrated to the Company's reasonable satisfaction that: (1) the
Facility's net energy will equal the energy delivery schedules for the extended term of this
Amendment; and (2) the liketihood that the Facility, under average design conditions, will generate
Page 3
at no more than 2.5 aMW in any calendar month. The Facility's estimated net output over the
extended term is 397 megawatt-hours.
7. The Amendment submitted herewith, as Attachment l, complies with the
Commission's orders.
8. Except as otherwise indicated, the Company will pay the Seller the price set forth
in Exhibit A to the Amendment.
9. Paragraph 2.1 of the Amendment provides that the contract will not become
effective until the Commission has approved it and determined that the prices paid for energy and
capaclty are just and reasonable, in the public interest, and that costs incurred by the Company for
purchasing energy and capacity are legitimate expenses, all of which the Commission will allow
the Company to recover in Idaho rates in the event other jurisdictions deny recovery of their
proportionate share of said expenses.
10. Due to no fault of the Seller the Company was late filing this Application and
respectfully requests if the Commission approves the Amendment the updated pricing for energy
sales be applicable retroactively to June 1,2020 as specified in the terms of the extension.
III. COMMUNICATIONS
11. Communications regarding this filing should be addressed to:
Ted Weston
Idaho Regulatory Affairs Manager
Rocky Mountain Power
1407 West North Temple, Suite 330
Salt Lake Ciry, Utah 84116
Telephone: [phone]
Email: ted.weston(@pacifi com. com
IdahoDockets@pacifi com.com
Page 4
Jacob A. McDermott
Senior Counsel
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake City, Utah 84116
Telephone: [phone]
Email: Jacob.mcdermott(dpacifi com.com
Adam Lowney (ISB#I 0456)
McDowell Rackner Gibson PC
419 SW llthAvenue, Suite 400
Portland, OR 97205
Telephone: [phone]
Fax: [phone]
Email: [e-mail]
In addition, Rocky Mountain Power requests that all data requests regarding this
Application be sent in Microsoft Word to the following:
By email (preferred) : datareque st(a)pacifi corp. com
By regular mail:Data Request Response Center
PacifiCorp
825 Multnomah, Suite 2000
Portland, Oregon 97232
Informal questions may be directed to Ted Weston, Idaho Regulatory Affairs Manager at
(80r) 220-2e63.
IV. MODIFIED PROCEDT'RE
12. The Company believes that a hearing is not necessary to consider the issues
presented herein and respectfully requests that this Application be processed under Modified
Procedure, i.e., by written submissions rather than by hearing, pursuant to RP 201.
V. REOUEST FOR RELIEF
WHEREFORE, Rocky Mountain Power respectfully requests that the Commission:
(l) Issue an order authorizing that this matter be processed by Modified Procedure;
Page 5
(2) Approve or reject the Amendment to the power purchase agreement between the
Commercial Energy Management, Inc. and the Company without change or condition; and
(3) Declare that the avoided cost prices set forth in the Amendment are just and
reasonable, in the public interest, and that the Company's incurrence of such costs are legitimate
expenses, all of which the Commission will allow Rocky Mountain Power to recover in rates in
Idaho in the event other jurisdictions deny recovery of their proportionate share of said expenses.
DAIED this 8m day of June 2020.
Respectfully submitted,
ROCKY MOIINTAIN POWER
Adam Lowney (ISB#10456)
McDowell Rackner Gibson PC
419 SW llthAvenue, Suite 400
Portland, OR 97205
Telephone: [phone]
Fax: [phone]
Email: [e-mail]
Attorneyfor Roclqt Mountain Power
Page 6
Attachment 1
AMEI\DMENT
to that certain
POWER PURCHASE AGREEMENT
Between
Commercial Energy Management, Inc.
And
PacifiCorp
This AMENDMENT (the "Amendment"), dated March 19,2020, amends that certain
POWER PURCHASE AGREEMENT between PacifiCorp, an Oregon corporation
("PacifiCorp"), and Commercial Energy Management, fnc., an Idaho corporation ("Seller"),
dated Novemb er 2l , l99l (the "PPA"). Capitalized terms used but not defined in this Amendment
shall have the meaning set forth in the PPA.
BACKGROUND
A. PacifiCorp and Seller entered into the PPA prior to PacifiCorp's separation of its energy
supply and transmission functions as required by federal law and regulations. For this
reason, the PPA includes provisions that address both energy sales and interconnection
requirements.
B. The PPA is scheduled to expire by its terms on May 31,2020, and Seller has expressed a
desire to continue to make sales from the Facility to PacifiCorp consistent with the
requirements of the federal Public Utility Regulatory Policies Act ("PURPA"), as
implemented in the State of Idaho.
C. Seller has demonstrated to PacifiCorp that the Facility remains a "Qualifying Facility" as
defined by PURPA and as implemented in the State of Idaho.
D. Seller and PacifiCorp are in the process of securing a new stand-alone interconnection
agreement that, once executed and all distribution system upgrades are constructed and
in-service, will replace the interconnection provisions in the PPA.
E. During the period that the necessary distribution system upgrades are being completed,
PacifiCorp and Seller have agreed to a limited extension to the term of the PPA, with
updated pricing for energy sales during the extended term of the PPA as described below
AGREEMENT
PacifiCorp and Seller agree as follows.
The last sentence of Section 2.1 of the PPA is amended and restated to read as follows:
"Unless terminated earlier pursuont to the terms of this Agreement, this Agreement
shall expire upon the earlier of (i) the effective date of a new power purchase
I
2
3
agreement between PacifiCorp and Seller pertaining to the Facilit!; or (tt) March
1,2021."
Notwithstanding any provision in the PPA to the contrary, for the period beginning
June l, 2020 through the end of the term of the Agreement, PacifiCorp shall pay Seller
as provided in Exhibit A to this Amendment for the energy output of the Facility
delivered to the Point of Delivery as adjusted for Losses.
Notwithstanding any provision in the PPA to the contrary, PacifiCorp shall not be
responsible to purchase the output of the Facility during periods that the Facility is
curtailed due to construction and completion of the distribution system upgrades called
for in the final, new stand-alone interconnection agreement between Seller and
Pacifi Corp' s transmission function.
This Amendment shall be effective once signed and delivered by both PacifiCorp and
Seller and approved by the Idaho Public Utilities Commission.
All other terms and provisions of the PPA shall remain unchanged. Each party hereby
ratifies and confirms that except as expressly amended hereby, all of the terms,
conditions, covenants, representations, walranties and all other provisions of the
Agreement remain in full force and effect.
This Amendment shall be governed by and construed in accordance with the laws of
the State of Idaho (without reference to its choice of law doctrine).
This Amendment may be executed in multiple counterparts, each of which when so
executed and delivered shallbe deemed to be an original and all of which taken
together shall constitute but one and the same instrument. Delivery of an executed
counterpart of this Amendment by electronic transmission (in .pdf form) shall be
equally as effective as delivery of a manually executed counterpart.
[s ignature p age follow d
4.
5
6.
7
IN WINESS WHEREOF, the parties below have caused this Amendmelrt to be executed in their
respective narnes.
PacifiCorp
By
Name:
Title:
Commerdal Energr Management, Inc.
By
Name: MaherF. Wissa
Title: President
EXHIBIT A
Enerey Rate
Energy Purchase Price : Energy Annual Rate * Monthly Peak Multiplier
Table 1: Enerry Annual Rates
Year
Energy Annual Rate
$l[rwh
2020 $s5.66
2021 $56.3s
Table 2: Monthly On-Peah/0ff-Peak Multipliers
Month On-Peak
Hours
Off-Peak
Hours
January 103%94o/o
February 105%97%
March 95%80%
April 95%76%
Mav 92o/o 630/o
June 94%65%
July t2t%92%
Auzust l2lo/o l060/o
Septernber l09o/o 99%
October tt5%105%
November tt0%96%
December 129%120%
Where:
"Off-Peak Hours" means all hours that are not On-Peak Hours.
"On-Peak Hours" means all hours ending 07:00:00 through 22:00:00 MPT,
Monday through Saturday, excluding NERC designated holidays.