20210405Final_Order_No_34966.pdf

ORDER NO. 34966 1

Office of the Secretary
Service Date
April 5, 2021
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On October 8, 2020, Rocky Mountain Power, a division of PacifiCorp (the “Company”)
applied to increase the wind and solar integration rates for new power purchase agreements
(“PPAs”) between the Company and wind and solar qualifying facilities (“QFs”).
On November 23, 2020, the Commission issued a Notice of Application and Notice of
Intervention Deadline. Order No. 34840. No one intervened.
On January 12, 2021, the Commission issued Notice of Modified Procedure and set
comment and reply comment deadlines for interested persons and parties and the Company. Order
No. 34888 at 1-2. Staff filed the only comments, and the Company filed a reply.
Having reviewed the record, the Commission enters this Order approving the
Company’s Application on the conditions described below. The Company’s wind integration rate
for wind-powered QFs and the solar integration rate for solar-powered QFs shall increase as shown
on Attachment A that is attached to this Order.
APPLICATION
In its Application, the Company stated that it filed Case No. PAC-E-07-07 in 2007,
requesting approval of a utility-specific wind integration adjustment to published avoided cost
rates. Id. at 2. The Commission approved a stipulation by the parties and decided a utility-specific
wind integration cost adjustment was appropriate. Id. citing Order No. 30497 at 12. Further, the
Company stated the Commission ordered the Company to file any changes to the wind integration
charge reflected in future Integrated Resource Plans (“IRP”). Id. citing Order No. 30497 at 13.
On August 28, 2017, after filing the 2017 IRP, the Company filed to update the wind integration
rate and to implement a solar integration rate based on the 2017 IRP Flexible Reserve Study
(“FRS”). Id.
The Company stated it filed the Application consistent with Order No. 30497 to
increase the integration rates for wind and solar-powered QFs that would apply against published
IN THE MATTER OF THE APPLICATION
OF ROCKY MOUNTAIN POWER FOR
AUTHORIZATION TO UPDATE THE WIND
AND SOLAR INTEGRATION RATE FOR
SMALL POWER GENERATION
QUALIFYING FACILITIES
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CASE NO. PAC-E-20-14

ORDER NO. 34966

ORDER NO. 34966 2

avoided cost rates unless the QF delivers firm hourly energy to the Company under a PPA. Id. at
1. The Company proposed to increase the wind integration rate from $0.57 to $1.11 per MWh for
wind-powered QFs and the solar integration rate from $0.60 to $0.85 per MWh for solar-powered
QFs. Id.
On October 25, 2020, the Company filed its 2019 IRP. See Case No. PAC-E-19-16.
Id. at 3. In support of the Application, the Company submitted Attachment No. 1, Appendix F -
FRS from Volume II of the 2019 IRP. Attachment No. 1 explains the method used and the results
derived from PacifiCorp's analysis of wind and solar integration costs. Id.
COMMENTS
Staff Comments
Staff believed the Company’s method for calculating wind and solar integration rates
is reasonable and the results can be applied to future QF PPAs. Staff Comments at 3. Staff stated
the 2019 FRS estimates regulation-reserve requirements based on 2017 actual operational data the
Company uses for hourly forecasts to satisfy the North American Energy Regulatory
Commission’s reliability standards. Id. The 2019 FRS also determines proposed integration rates
by comparing the Company’s operating reserve requirements over 20 years to the Company’s
flexible resource supply. Id.
Staff stated the 2019 FRS differs from the 2017 FRS because:
• Regulation reserve requirements are co-optimized in quantile regression.
• Actual hourly load schedules are used instead of proxy schedules.
• Actual solar schedules are used instead of proxy schedules.
• Energy Imbalance Market information is based on actual operational experience.
• Integration costs are based on a future 2030 study period and escalated relative to 2030
values instead of using a 2017 study period and escalating cost at inflation into the
future.
• Inter-hour balancing integration costs were excluded due to minimal impact in the 2017
FRS.
• Incremental impact of changes in forecasted load on reserve requirement were
accounted for in the 2019 FRS.
Staff Comments at 4. Although most of the identified changes are minor, Staff believes they
improve the accuracy of the 2019 FRS. Id.

ORDER NO. 34966 3

Staff explained the Company’s method for calculating solar and wind integration rates
was generally reasonable. For example, to ensure integration rates are commensurate with the
need for reserves as the Company’s system undergoes significant change, moving to a method that
incorporates a 2030 study period is more likely to produce accurate integration rates. Id. at 5.
Staff said all but three of the Company’s underlying assumptions for the integration
rates are reasonable and would produce acceptable results. Id. Staff noted that: (1) the Company
used the wrong number of hours per year to calculate the wind integration rate – a corrected
number would increase the wind integration rate by about 1% (raising the rate to $1.12 per MWh);
(2) the Company used the same escalators for wind and solar (Staff recommended use of separate
escalators in future studies) and; (3) the Company used different levels of time between base cases
(although, ultimately, Staff did not find this to be a major concern).
Staff believed the 2019 FRS’s integration rates were reasonable because they were
based on refinements to a method used to determine previously approved integration rates. Id. In
addition, the Company used technical review committees and the IRP process to vet the methods
and results. Id.
The Company proposed a $1.11 per MWh wind integration rate and a $0.85 per MWh
solar integration rate be used in the Surrogate Avoided Resource (“SAR”) model for levelized and
non-levelized published avoided cost rates for the duration of a QF’s contract. Id. at 7.
Currently, the SAR model allows one constant number for wind and solar integration
rates, even though the Company’s 2019 FRS produces different integration rates for different
years. Id. at 8. Staff proposed non-levelized integration rates based directly on the Company’s
FRS results and calculating levelized integration rates for different online years for different
contract lengths as illustrated in Attachment A to Staff’s Comments.1 Id. Staff believed this would
lead to more accurate integration rates.
The Company proposed to apply the integration rates only to published avoided cost
rates because IRP avoided cost rates automatically reflect integration rates under the Company’s
IRP Method. Staff believed this is reasonable. However, because the Company proposes to apply
integration rates as an adjustment to published rates only, Staff believes the rates should be

1 The integration rates in Attachment A would be applied after Monthly Weighting Factors and Heavy Load Hour and
Light Load Hour Adjustments are applied to be consistent with how integration rates are currently applied in the SAR
model.

ORDER NO. 34966 4

calculated using the same Overall Weighted Cost of Capital Percentage authorized in the SAR
model. Id.
The Company proposed to apply integration rates to wind and solar QFs unless the QF
developer agrees in a PPA to schedule and deliver, via a transmission provider, the output to the
Company on a firm hourly basis. Id. at 9. Staff recommended that when situations warranting a
waiver of integration rates occur, the Company should still include other provisions such as MAG
and forecasting fees to fully replace 90/110 requirements. Id.
Company Reply Comments
In its reply, the Company stated it appreciated Staff’s review of the Application and
support of the improvements to the method used to calculate integration costs. Reply Comments
at 2. The Company stated it expects to continue to refine integration cost calculations in future
IRPs. Id. The Company noted it corrected the formula error identified by Staff and submitted
corrected integration rates in Attachment A to the reply. Id.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter under Idaho Code §§ 61-502 and 61-
503. The Commission is statutorily authorized to investigate rates, charges, rules, regulations,
practices, and contracts of public utilities and to determine whether they are just, reasonable,
preferential, discriminatory, or in violation of any provision of law, and to fix the same by order.
Idaho Code §§ 61-502 and 61-503. In addition, the Commission has authority under PURPA and
Federal Energy Regulatory Commission (“FERC”) regulations to set avoided costs, to order
electric utilities to enter 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.
Based on our review of the record, the Commission finds that it is fair, just and
reasonable to authorize the Company to increase its wind and solar integration rates. To accurately
reflect integration rates over the life of the contract it is appropriate to change the constant single
rate for integration costs inside the SAR model to annual rates over the life of contracts.
Attachment A provides these detailed integration rates and the Commission finds they are fair, just
and reasonable. The new wind and solar integration rates shall apply to purchases of power from
wind and solar-powered QFs for published avoided cost rates beginning from the issuance of this
Order.

ORDER NO. 34966 5

The Commission also finds it reasonable to approve the format and the method used to
derive the rates as illustrated in Attachment A and require the Company to submit any changes to
integration rates in this format in future filings.
O R D E R
IT IS HEREBY ORDERED that the Company’s Application, requesting authorization
to increase the wind integration rate for the Company’s purchases of electric power from wind-
powered QFs and increase the solar integration rate for the Company’s purchases of electric power
from solar-powered QFs, as shown on Attachment A to this Order are approved. These rates apply
against published avoided cost rates under PURPA, unless the QF developer agrees in the power
purchase agreement to schedule and deliver, via a transmission provider, the QF output to the
Company on a firm hourly basis.
IT IS FURTHER ORDERED that the format and the method used to derive the wind
and solar integration rates as illustrated in Attachment A to this Order are approved. The Company
shall file these rates in this format in future filings.
IT IS FURTHER ORDERED that consistent with Order No. 33937 the Company is to
continue to file any future updates to its integration rates after the Commission has acknowledged
its IRP supporting the updates.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order about any matter
decided in this Order. Within seven (7) days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration. See Idaho Code § 61- 626.

ORDER NO. 34966 6

DONE by order of the Idaho Public Utilities Commission at Boise, Idaho this 5th day
of April 2021.

PAUL KJELLANDER, PRESIDENT

KRISTINE RAPER, COMMISSIONER

ERIC ANDERSON, COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\PAC-E-20-14\orders\PACE2014_final_jh.docx
Attachment A
Case No. PAC-E-20-14
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Attachment A
Case No. PAC-E-20-14
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