20211220Final_Order_No_35262.pdf

ORDER NO. 35262 1

Office of the Secretary
Service Date
December 20, 2021

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On December 3, 2020, Rocky Mountain Power (“Company”) applied to the
Commission seeking approval or rejection of an amendment to extend for one-year an existing
Energy Sales Agreement (“ESA”) the Company has with Amy Family Holdings, LLC (“Seller”)
to allow the parties to secure a stand-alone interconnection agreement replacing the
interconnection provision in the existing ESA. The Company’s Application includes an
Amendment to the Power Purchase Agreement (“PPA”) between Seller and the Company
(“Attachment 1”). The Company reasoned that if the ESA was not extended or renewed it would
expire on December 31, 2021.
After the Company filed its Application to extend the ESA’s term by one-year, the
Seller significantly progressed on the new interconnection provisions to the point the Company
became confident the Seller could complete the required interconnection before the energy sales
agreement expired, thus negating the need for the one-year extension. On March 10, 2021, the
Company filed an Unopposed Motion for Stay with the goal of allowing the Seller to complete the
new interconnection provisions.
On March 25, 2021, the Commission granted the Company’s motion with the condition
that if the Seller had not completed its interconnection requirements by October 15, 2021, the
Company must seek continuance. Order No. 34971.
On September 23, 2021, the Company filed an Unopposed Motion to Lift Stay
requesting the Commission consider its Application and issue a final order by December 31, 2021
citing that the transmission upgrades necessary for the long-term power purchase agreement with
Seller cannot be completed until May 2022. The Company states “the existing contract must be
extended so the Seller can maintain its current interconnection rights until the transmission
upgrades are complete.”
IN THE MATTER OF ROCKY MOUNTAIN
POWER’S APPLICATION FOR APPROVAL
OR REJECTION OF AN ENERGY SALES
AGREEMENT WITH AMY FAMILY
HOLDINGS, LLC
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CASE NO. PAC-E-20-18

ORDER NO. 35262
ORDER NO. 35262 2

On October 22, 2021, the Commission issued notice of the Company’s Application and
established public comment and Company reply deadlines. Order No. 35208. Staff filed the only
comments. The Company did not reply.
On November 17, 2021, the Company filed an Errata to its Application. The Errata
corrected the nameplate capacity of the Facility, the contracted capacity of the Facility, and
estimated net output over the extended term. The updated Facility nameplate capacity is 650
kilowatts (“kW”), the updated contract capacity is 600 kW, and the updated estimated net output
is 1,904 megawatt-hours (“MWh”).
Having reviewed the record in this case, we now issue this Order granting the
Company’s authority to extend its existing ESA with the Seller for one-year.
THE APPLICATION
The ESA was entered on January 3, 1985 prior to the Company separating its energy
supply and transmission functions as required by federal law. The ESA contains provisions
addressing both energy supply and interconnection requirements.
The Seller and the Company are in the process of securing a stand-alone
interconnection agreement to replace the interconnection provision in the ESA. Before a new
agreement can be entered, the stand-alone interconnection agreement requires all distribution
system upgrades to be constructed and in place.
The necessary upgrades for a new agreement will not be completed before the ESA
expires on December 31, 2021. The Seller expressed a desire to continue selling electricity
generated by the Facility to the Company consistent with the requirements of the Public Utilities
Regulatory Policies Act of 1978 as implemented by Idaho.
While the distribution system upgrades are being completed the Seller and the
Company have agreed to a limited one-year extension of the existing contract with updated pricing
for energy sales during the extended term—January 1, 2022 through December 31, 2022
(“Extended Term”). See Exhibit A to Attachment 1. During the Extended Term, the total nameplate
capacity of the Facility—450 kW— remains unchanged.1 The Facility’s estimated net output
during the Extended Term is 2,087 MWhs.2

1 The Company updated this in the November 17, 2021 Errata filed in this case. The Errata explained that the installed
nameplate capacity of the Facility was incorrectly listed in the Application and should be 650 kW.
2 See id.
ORDER NO. 35262 3

STAFF’S COMMENTS
Staff recommended the Commission approve the proposed Amendment for a one-year
extension between the Company and the Seller, if the contracting parties update the Amendment
to:
1. Correct the nameplate capacity to reflect the installed nameplate capacity of
650 kW;
2. Use of two sets of avoided cost rates. One set of rates that uses avoided costs
of capacity and energy as contained in the Amendment and approved in Order
No. 34683 for up to 600 kilowatt-hours (“kWhs”) each hour. A second set that
uses avoided cost of energy rates approved in Order No. 34683 for any hourly
generation greater than 600 kWhs until the Company’s first capacity deficiency
date; and
3. Modify Table No. 1 in Exhibit A to reflect the adjusted rates available:3
Table No. 1: Updated Table 1 Energy Annual Rates

Year
Energy Annual Rate for
hourly generation of 600
kWhs or less ($/MWh)
Energy Annual Rate for
hourly greater than 600
kWhs ($/MWh)
2022 $51.58 $23.90

Staff discussed the history of the Facility. The original 1985 PPA reflected a nameplate
capacity of 450 kW. In 1987, a MOU was entered acknowledging the nameplate capacity to 600
KW—the PPA has reflected this since. The actual installed nameplate capacity is 650 kW, which
Staff believed should be accurately stated in the Amendment.
Because the original PPA operated as a 600 kW Facility, Staff did not believe the
Facility should be eligible for avoided cost of energy and capacity payments for its entire 650 kW
installed nameplate capacity. Staff cited Order No. 32697 that describes the eligibility for
immediate capacity payments in a renewal contract. Since the Facility is currently being paid
capacity payments under the expiring contract, Staff believed the Seller should be paid for the
avoided cost of energy and capacity for hourly generation up to 600 kWhs, but not for any hourly
generation exceeding 600 kWhs. Until the Company’s next capacity deficiency date, Staff argued
the Facility should only be paid for the avoided cost of energy for any hourly generation above

3 Energy Annual Rates will be further adjusted by monthly on-peak/off-peak multipliers to derive hourly avoided cost
rates for each month.
ORDER NO. 35262 4

600 kWhs, because the Company has not been relying on that much generation capacity for
planning purposes. Staff believed the applicable avoided costs rates authorized in Order No. 34683
should be applied to the one-year extension.
Staff also recommended the parties use two sets of avoided cost rates for their renewal
contract. These rates should include avoided costs of capacity and energy for hourly generation up
to 600 kWhs and avoided cost of energy only for any hourly generation exceeding 600 kWhs until
the Company’s next capacity deficiency date.
Staff also recommended that the parties include the 90/110 provision in their renewal
contract when it is filed but did not believe it was necessary in the extension.
COMMISSION DECISION AND FINDINGS
The Commission has jurisdiction over this matter under Title 61 of the Idaho Code.
The Commission is empowered 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. The Commission also has authority under PURPA and Federal Energy
Regulatory Commission (“FERC”) regulations to set avoided cost rates, to order electric utilities
to enter fixed-term obligations for the purchase of energy from QFs, and to implement FERC rules.
The Commission may enter any final order consistent with its authority under Title 61 and PURPA.
The Commission has reviewed the record, including the Application, Errata, and Staff’s
comments. Based on our review, we find it fair, just, and reasonable to approve the Company’s
one-year extension with the Seller to allow the Seller to complete the requirements for a standalone
interconnection agreement necessary for a long-term renewal contract.
The Commission further finds it reasonable to direct the contracting parties to update
their ESA Amendment to include the correct nameplate capacity of 650 kW. This should be filed
with the Commission once corrected. The actual installed nameplate capacity should also be used
in any renewal contract if the generator is not modified prior to its execution.
The Commission finds it reasonable and in the public interest to require the Company
and the Seller to apply two sets of avoided cost rates to the Facility’s generation. The Amendment
shall include energy plus capacity payments for hourly generation up to 600 kWhs and energy only
payments for any hourly generation above 600 kWhs, until the Company’s next capacity deficit
ORDER NO. 35262 5

year. Avoided cost rates approved in Order No. 34683 shall be applied to the hourly generation as
described above.
Finally, we direct the contracting parties to employ the bifurcated avoided cost rate
structure described above to any long-term renewal contract for the Facility. Given the recent
update to the correct Facility’s nameplate capacity, we find separate rates for hourly generation
below or exceeding 600 kWhs until the Company’s first capacity deficit year are reasonable in any
renewal contract. We also note that the 90/110 provision has become standard in these types of
contracts.
O R D E R
IT IS HEREBY ORDERED that the Amendment extending the Company’s ESA with
the Seller for up to one-year is approved, effective January 1, 2022, subject to the following
conditions:
1. The Amendment reflects the actual installed nameplate capacity of the
generator as 650 kW; and
2. The contracting parties agree to include bifurcated rates during the one-year
extension—avoided cost of energy and capacity for any hourly generation up
to 600 kWhs and avoided cost of energy only for any hourly generation
exceeding 600 kWhs until the Company’s next capacity deficit year. The
Company should use the applicable avoided cost rates approved in Order No.
34683.
IT IS FURTHER ORDERED that the contracting parties should include the bifurcated
avoided cost rate structure (described above) until the Company’s next capacity deficit year.
IT IS FURTHER ORDERED that all payments made by the Company to the Seller
under the one-year ESA extension, as modified herein, are allowed as prudently incurred expenses
for ratemaking purposes.
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.
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ORDER NO. 35262 6

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 20th
day of December 2021.

PAUL KJELLANDER, PRESIDENT

KRISTINE RAPER, COMMISSIONER

ERIC ANDERSON, COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\PAC-E-20-18\Orders\PACE2018_final_dh.docx