20201013Staff Stipulation.pdf

ldaho Public Utilities Co#mfl#ithD Brad Governor
Po Box 83720, Bobe, lD 8374n 0074 ti j; *i:T i 3 Pll l?r 5 Paul l(lcllrndcr, CommllaloncrKrlrtnc Repcr, Commbdoncr
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HAND-DELIVERED
Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd.
Building 8 Suite 20lA
Boise, D 83714
Re CASE NO. PAC.E.2O.lO
IN TIIE MATTER OF TITE APPLICATION FOR APPROVAL OR REJECTION
OF A POWER PURCHASE AGREEMENT BETWEEN PACIFICORP AND
FALL RIVER ELECTRIC COOPERATIVE, INC.
Attention: Ms. Noriyuki
Please find enclosed for filing a stipulation between the parties resolving all issues in the above-
referenced matter addressing capacity payments.
DATED at Boise, Idaho, thi, B{Aday of Octob er 2020.
Dayn Hardie
Deputy Attorney General
Enclosure
11331 W. Chinden Blvd., Building 8 Suite 201-A, Boise !D
83714 Telephone: [phone] Facsimile: [phone]
Cc: Parties of Record
DAYN HARDIE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83120-0074
[phone]
IDAHO BAR NO. 9917
Street Address for Express Mail:
II33I W CHINDEN BLVD, BLDG 8, SUITE 2OI-A
BOISE, D 837 T4
Attorney for the Commission Staff
BEFORE TIIE IDAHO PUBLIC UTILITIES COM]VIISSION
IN THE MATTER OF THE
APPLICATION FOR APPROVAL OR
REJECTION OF A POWER
PURCHASE AGREEMENT
BETWEEN PACIFICORP AND FALL
RIVER ELECTRIC COOPERATIVE,
INC.
CASE NO. PAC.E.2O.1O
STIPULATION
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This stipulation ("Stipulation") is entered into by and among Rocky Mountain Power, a
division of PacifiCorp ("Comp&try"), Staff of the Idaho Public Utilities Commission ("Staff'), and
Fall River Electric Cooperative, Inc. ("Fall River"). The Stipulation refers to the Company, Staff,
and Seller individually as "Party," and collectively, as the "Parties."
I. INTRODUCTION
The terms and conditions of this Stipulation are set forth below. The Parties agree this
Stipulation represents a fair, just, and reasonable compromise of all issues raised in this
proceeding, and that this Stipulation is in the public interest. The Parties, therefore, recommend
that the Idaho Public Utilities Commission ("Commission") approve the Stipulation and the terms
and conditions herein. ,See IDAPA 31.0L0I.272 and274.
CASE NO. PAC-E-a}-IO
STIPULATION - Page 1
II. BACKGROUND
1. On June 9,2020, the Company submitted an Application for an order approving or
rejecting a Power Purchase Agreement ("Agreement") with Fall River for energy generated by the
Felt Hydro Facility ("Facility"), a small hydro facility in Teton County, Idaho. The Facility is a
qualifying facility under the Public Utility Regulatory Policies Acr of 1978.
2. On July 2,2020, the Commission issued a Notice of Application and Notice of
Modified Procedure establishing an August 17 ,2020 comment deadline and an August 24,2O2O
reply comment deadline. See Order No. 34717.
3. On July 3I, 2020, Staff sent its Second Production Request to the Company. Staff
received responses to requests 8-11 on August 10,2020 and requests 12-14 on August ll,2O2O.
Based on these responses, Staff determined it would need additional time to sort out its position
on capacity payments described in the Agreement.
4. On August 17 ,2020, Staff filed initial comments and asked the Commission to amend
the comment deadline to allow additional time to analyze the data and finalize its position on
capacity payments through supplemental comments.
5. At the August 18,2020 Decision Meeting, Staff asked the Commission to vacate the
comment deadlines established in Order No. 34717 and establish new comment deadlines to allow
for public comments on October l,2o2o and reply comments on october 15,2020.
6. On August 25, 2020, the Commission issued a Notice of Amended Comment
Deadlines to allow for public comments on October 1,2020 and reply comments on October 15,
2020. See Order No. 34760.
7 . On September 22,2020, an email was distributed to the Commission Secretary and
Parties providing notice that settlement discussions had begun and the Parties would work toward
CASE NO. PAC-8,-20-IO
STIPULATION - Page 2
resolving issues raised in Staffs August I7,2020 comments under IDAPA 31.U.01.272.The
email described the Parties' intentions to reach settlement on the issue of rate bifurcation for
capacity and energy payments received by Fall River for generation from the Facility. Based upon
these settlement discussions, and as a compromise of the Parties' positions in this proceeding, and
for other good and valuable consideration, the Parties have reached a comprehensive settlement
agreement.
8. At the Commission's September 25, 2020 Decision Meeting, Staff asked the
Commission to vacate the comment deadlines established by Order No. 34760 and issue an order
establishing a new comment deadline to allow additional time for the Parties to finalize the
Stipulation and submit comments in support of the Stipulation. On October 6, 2020, the
Commission issued Order No. 34806 establishing an October 22,2020 comment deadline in this
case.
III. TERMS OF THE STIPULATION
Substantive Terms of the Stipulation
9. The Parties request that the Commission issue an order to amend the Agreement
submitted with the Company's Application to resolve the following issues: (1) limit capacity
payments for generation of electricity from the Facility to amounts that it has historically generated
at Powerhouse #2, while withholding capacity payments for any incremental generation until
January I,2028;t (2) determine the contract rate used to compare against 85%o of the Non-Firm
Market Price for payment of non-conforming energy; (3) apply the proper discount to the firm
market price used by Company to convert it to a Non-Firm Market Price for determination of
appropriate rates for non-conforming energy; and (4) correct Exhibit K of the Agreement,
I See Order No. 33917 which describes the Company's next capacity deficiency date for SAR-
based avoided costs calculations.
CASE NO. PAC-E-a}-IO
STIPULATION - Page 3
changing the term "Mid-C-Ss" to "PV-85" to reflect the use of the Palo Verde Hub for determining
the firm market price.
10. The Parties propose that upon the Commission's final order declaring the avoided
cost rates, as described herein, as just and reasonable and in the public interest, the Company and
Fall River will enter into an amended agreement that includes the terms set forth in this Stipulation
("Amended Agreement") which the Company will submit to Staff for verification through a
compliance filing by November 13, 2020.
11. The Parties agree that from April 1,2021, the date sales are to commence under the
Amended Agreement, through December 3I,2027 the Company will pay Fall River for the
avoided cost of capacity and the avoided cost of energy for energy generated by the Facility in
each hour up to the capacity payment limit of 5,100 kilowatt-hours ("kwh") and the Company will
pay Fall River the avoided cost of energy only for energy delivered hourly in excess of 5,100
kWhs.
12. The Parties agree the Company will pay Fall River for the avoided cost of capacity
and the avoided cost of energy for all generation from the Facility beginning January 1,2028
through the end of the Z}-year term of the Amended Agreement.2
13. The Parties agree that the energy and capacity rates in the Amended Agreement
will be calculated based on the published rates approved by the Commission in Order No. 34350,
effective June 1, 2Ol9 to May 3 I,2O2O.
14. For purposes of determining which rate to pay for Non-Conforming Energy (if any)
delivered in each month subject to the 90lllD firmness requirements, the Parties agree to determine
2 Qualifying Facilities in Idaho with published rate contracts cunently start receiving capacity
payments for the entire year during the year when the capacity deficiency date occurs.
CASE NO. PAC-8,-20-IO
STIPULATION - Page 4
whether to use 85Vo of the Non-Firm Market Price or the Conforming Energy Purchase Price by
calculating a Weighted-Average Conforming Energy Purchase Price for the Conforming Energy
Purchase Price. The Parties further agree that the "Weighted-Average Conforming Energy
Purchase Price" will be calculated by taking the revenue that would have been earned by the
Facility in a given month as if all energy was Conforming Energy divided by the total energy
generated by the Facility for that month. (See Attachment A, for examples of the calculation of the
"Weighted-Average Conforming Energy Purchase Price").
15. The Parties agree that for the special case when the 85Vo of the Non-Firm Market
Price is lower than the Weighted-Average Conforming Energy Purchase Price and Fall River's
generation for a given month exceeds the IIOVo threshold for purposes of the 9}lll0 firmness
requirements, the rate that will be applied for all generation from the Facility during the month
will use a weighted-average rate between the Weighted-Average Conforming Energy Purchase
Price and 85Vo of the Non-Firm Market Price weighted by the amount of generation below and
above the lloTo upper threshold, respectively. (See Attachment A, Scenario 5, for example of
payment calculations).
16. The Parties agree the monthly firm market Palo Verde market price will be
discounted by 82.4Vo to arrive at the Non-Firm Market Price for purposes of 901110 firmness
requirements.
17. The Parties agree that Exhibit K of the Agreement referring to the use of Mid-C-85
as the source of the market price for purposes of the 901lrc firmness requirements will be changed
to PV-85 to correctly reflect the use of the Palo Verde Hub in the Amended Agreement.
CASE NO. PAC-E-Z0-IO
STIPULATION - Page 5
18. All of the agreements contained in this Stipulation are conditioned on and subject
to compliance with all other contract terms contained within the original Agreement and carried
over to the Amended Agreement.
General Terms and Conditions
19. The Commission's Rules of Procedure 248-IDAPA 31.01.01.24&-authorizes the
Commission to approve a settlement so long as the settlement is just and reasonable in result IDAPA
31.01.01 .276. Whlle the Parties are not able to agree that each specific component of this Stipulation
is just and reasonable in isolation, all of the Parties agree that this Stipulation as a whole is just and
reasonable in result and in the public interest.
20. All negotiations related to this Stipulation are confidential, and no Party shall be bound
by any position asserted in negotiations. Except as expressly provided in this Stipulation, neither the
execution of this Stipulation nor the order adopting it shall be deemed to constitute an admission or
acknowledgment by any Party of the validity or invalidity of any principle or practice of regulatory
accounting or ratemaking; nor shall they be construed to constitute the basis of an estoppel or waiver
by any Party; nor shall they be introduced or used as evidence for any other purpose in a future
proceeding by any Party except in a proceeding to enforce this Stipulation.
21. If the Commission rejects any part or all of this Stipulation, or imposes any
additional material conditions on approval of this Stipulation, each Party reserves the right, upon
written notice to the Commission and to the other Parties to this proceeding, within 15 days of the
date of such action by the Commission, to withdraw from this Stipulation. In such case, no Party
will be bound or prejudiced by the terms of this Stipulation, and each Party will be entitled to seek
reconsideration of the Commission's order, file testimony as it chooses, cross-examine witnesses,
and do all other things necessary to present a case as it deems appropriate. The Parties agree that
if a Party exercises its right to withdraw under this paragraph as a result of such Commission
CASE NO. PAC-E-2O-10
STIPULATION - Page 6
action, the original application and Agreement will remain pending as submitted by PacifiCorp for
further comment and Commission consideration as was the case prior to execution of this
Stipulation.
22.The Parties agree that no part of this Stipulation or the formulae and methodologies used
in developing the same or a Commission order approving the same shall in any manner be argued or
considered as precedential in any future case except with regard to issues expressly called-out and
resolved by this Stipulation. This Stipulation does not resolve and does not provide any inferences
regarding, and the Parties are free to take any position with respect to any issues not specifically called-
out and settled herein. Nothing in this Stipulation shall be construed to modify or supersede existing
settlement agreements entered by or among parties to this Stipulation.
23. The Parties agree that if any person challenges the approval of this Stipulation or
requests rehearing or reconsideration of any order of the Commission approving this Stipulation, each
Stipulating Party will use its best efforts to support the terms and conditions of this Stipulation. In the
event any person seeks judicial review of a Commission order approving this Stipulation, no
Stipulating Party shall take a position in that judicial review proceeding in opposition to the Stipulation.
24. The Parties agree that a hearing is not necessary and respectfully request that this
Stipulation be processed under Modified Procedure, i.e., by written submissions rather than by
hearing, pursuant to the timeline already established by the Commission in Order No. 34806.
IDAPA 3l.Ol.OI.20l et. seq. The Company, and Staff will, and Fall River may, file testimony or
comments to explain and offer further support for this Stipulation.
CASE NO. PAC-E-20-10
STIPULATION - Page 7
Respecfully subruitted this L$6b ofOctober 2020.
RockyMountain Power
By
Frll Rlver Blectrlc Cooperetive
A^--
Idaho Public Utilltles Commlssion Stalf
CASE NO. PAC-E-20-10
STIPULATION - Page 8
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 13th DAY OF OCTOBER 2020,
SERVED THE FOREGOING STIPULATION, IN CASE NO. PAC-E-20-10, BY E-MAILING
A COPY THEREOF, TO THE FOLLOWING:
TED WESTON
ROCKY MOUNTAIN POWER
I4O7 WEST NORTH TEMPLE STE 330
SALT LAKE CMY UT 84116
E-MAIL: [e-mail]
idahodockets @ pacificorp.com
ADAM LOWNEY
MoDOWELL RACKNER GIBSON
4I9 SW 1lTH AVE SUITE 4OO
PORTLAND OR 97205
E-MAIL: [e-mail]
GREGORY M ADAMS
PETER J RICHARDSON
RICHARDSON ADAMS PLLC
515 N 27TH STREET
BOISE TD 83702
E-MAIL: sree @richardsonadams.com
peter @ richardsonadams.com
JACOB A McDERMOTT
ROCKY MOUNTAIN POWER
1407 WN TEMPLE STE 320
SALT LAKE CITY UT 84I 16
E-MAIL: Jacob.mcdermott @pacificorp.com
DATA REQUEST RESPONSE CENTER
E.MAIL ONLY:
datarequest @ pacificorp.com
CERTIFICATE OF SERVICE