20211122Comments.pdf

tr r.Hr''li,.r
Street Address for Express Mail:
I 133 I W CHINDEN BVLD, BLDG 8, SUITE 20 I -A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
DAYN HARDIE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-007 4
[phone]
IDAHO BAR NO. 9917
IN THE MATTER OF ROCKY MOUNTAIN
POWER'S APPLICATION FOR APPROVAL
OR REJECTION OF AN ENERGY SALES
AGREEMENT WITH AMY FAMILY
HOLDINGS, LLC
i'l i: '": L: i '/ ['{]
"li: lll'iY 2A Pi{ t*: h0
CASE NO. PAC.E-20-18
COMMENTS OF THE
COMMISSION STAFF
)
)
)
)
)
)
STAFF OF the Idaho Public Utilities Commission, by and through its Attomey of record,
Dayn Hardie, Deputy Attomey General, submits the following comments.
BACKGROUND
On December 3, 2020, PacifiCorp dba Rocky Mountain Power ("Company") applied to the
Commission seeking approval or rejection of an Amendment to extend an existing Power Purchase
Agreement ("PPA") the Company has with Amy Family Holdings, LLC ("Seller") for up to one-
year to allow the parties to secure a stand-alone interconnection agreement. The extension will
expire upon the earlier of (i) the effective date of a renewal power purchase agreement between the
Company and the Seller; or (ii) December 31,2022. The Company reasoned that if the PPA was
not extended or renewed, it would expire on December 31, 2021.
After the Company filed its Application to extend the PPA's term, the Seller significantly
progressed on the new interconnection provisions to the point where the Company became
confident the Seller could complete the interconnection requirements before the PPA expired, thus
1STAFF COMMENTS NOVEMBER22,2O2I
negating the need for the extension. On March 10,2021, the Company filed an unopposed motion
to stay the Application.
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 September23,202l,the Company filed an unopposed motion to lift stay, requesting the
Commission consider its Application and issue a final order by December 31, 2021, because the
transmission upgrades necessary for a renewal power purchase agreement will not be completed
until May 2022. The Company states that the existing PPA must be extended so the Seller can
maintain its current interconnection rights until the transmission upgrades are complete.
STAFF ANALYSN
Staff recommends approval of the proposed Amendment between the Company and the
Seller, if the parties update the Amendment to:
1. Include provisions that correct the nameplate capacity to reflect the installed
nameplate capacity of 650 kilowatts ("kW");
2. Include provisions that describe the use of two sets of avoided cost rates. One set of
rates uses avoided cost ofcapacity and avoided cost ofenergy as contained in the
Amendment and approved in Order No. 34683 for up to 600 kilowatt-hours
("kWhs") each hour. The second set of rates uses avoided cost of energy only, as
approved in Order No. 34683 and effective November 18,2020, when the
Amendment was signed by both parties, for production greater than 600 kWhs until
the Company's first capacity deficiency date; and
3. Modiff Table No. I in Exhibit A as follows:
Table No. 1: Undated Table I Enerw Annual Ratest
I Energy Annual Rates will be further adjusted by monthly on-peak/off-peak multipliers to derive hourly avoided cost
rates for each month.
2
Year
Energy Annual Rate for
hourly generation of 600
kWhs or less ($/MWh)
Enerry Annual Rate for
hourly greater than 600
kWhs ($/IvIWh)
2022 51.58 23.90
STAFF COMMENTS NOVEMBERZ2,2O2I
Staffls review has focused on the nameplate capacity, the eligibility of capacity payments,
the avoided cost rates, and the 90/l l0 Rule.
Nameplate Capacitv
Staff recommends that the parties update the proposed Amendment to include provisions
that correct the nameplate capacity, by reflecting the actual installed nameplate capacity of 650 kW.
The original 1985 PPA listed the nameplate capacity as 450 kW. In 1987, the parties entered a
Memorandum of Understanding ("MOU") that increased the listed nameplate capacity to 600 kW.
See Order No. 21018. However, the actual installed nameplate capacity is 650 kW. Through
discovery, Staff learned that both the new transmission interconnection agreement and the renewal
contract will accurately reflect the nameplate capacity of 650 kW.
Capacity Payment Eligibilitv
Staff believes the Facility should receive immediate capacity payments for the up to 600
kWhs hourly because the 600 kW is the nameplate capacity last recognized by the Commission in
Order No. 21018.
In Order No. 32697, the Commission stated that, "If a QF project is being paid for capacity
at the end of the contract term, and the parties are seeking renewal/extension of the contract, the
renewal/extension includes immediate payment of capacity." The Facility is being paid for capacity
at the end of the contract term; thus, Staff believes the Facility should be granted capacity payments
up to 600 kWhs hourly for the full term of the Amendment contract.
Although the Amendment is only effective for one-year or less, Staff believes the Facility
should receive capacity payments during the period the Amendment is operable because the
Interconnection Agreement was executed on September 15,2021, and the completion of the
transmission upgrades necessary for a long-term contract depends on the workload of the
Company's engineering staff, not the Seller. See Production Response No. 3.
However, because the Commission has approved the nameplate capacity of 600 kW for the
Facility, not 650 kW actually installed, Staff believes the Facility is only eligible for capacity
payments up to 600 kWhs hourly because this is the amount of maximum capacity the Company
could rely upon to avoid resource acquisition in the future. Thus, production greater than 600 kWhs
hourly should receive avoided cost of energy only.
JSTAFF COMMENTS NOVEMBER2Z,2O2I
Avoided Cost Rates
Staff reviewed the avoided cost rates proposed in the Amendment and verified that the
proposed rates reflect the rate authorized in Order No. 34683, which were in effect when the
Amendment was signed by both parties. However, Staff believes that these rates, which include
avoided cost of capacity and energy, should only apply to generation up to 600 kWhs hourly. For
generation exceeding 600 kWhs hourly avoided cost of energy as approved in Order No. 34683
should be used until the Company's first capacity deficiency date. The "Energy Annual Rate for
hourly" exceeding 600 kWhs is contained in the "Updated Table I Energy Annual Rates" shown
above.
Staff also recommends that the parties use two sets of avoided cost rates for the new renewal
contract that the parties will submit to the Commission after the transmission upgrades are
complete. The two sets of avoided cost rates should include the 600-kW capacity payment cap in
place until the capacity deficiency date, that are authorized at the time when the parties sign the
contract.
The 90/110 Rule
Although the proposed Amendment does not include the 90/l l0 Rule related provisions,
Staff believes the 90lll0 provision is not necessary for the limited term of the Amendment because
the Commission recently approved a contract extension that did not include the provision. See
Order No. 35123. However, Staff believes that the parties should include the 90/l l0 provisions in
the renewal contract when it is submitted for Commission approval.
STAFF RECOMMENDATION
Staff recommends approval of the proposed Amendment between the Company and the
Seller, if the parties update the Amendment to:
1. Include the nameplate capacity for the installed nameplate capacity of 650 kilowatts
("kw");
2. Describe the use of two sets of avoided cost rates by capping capacity payments for
any throughput up to 600 kWhs in any hour as described above;
3. Replace Table I in Exhibit A with the Updated Table I Energy Annual Rates; and
4. File the updated Amendment with the Commission.
4STAFF COMMENTS NOVEMBER22,2O2I
Staffalso recommends that, if the parties update the Amendment, the Commission declare
that the avoided cost rates in the updated Amendment are just and reasonable, in the public interest,
and that the Company's incurrence of such costs are legitimate expenses.
?BRespectfu lly zubmitted this day ofNovember202l.
Deputy Attorney Gmeral
Technical Staff: Yao Yin
i:umise/commeatdpaoe20. I Sdryy oomments
5STAIry COMMENTS NOVEMBER2Z,2O2I
CERTIIIICATE OT SERVICE
I IIEREBY CERTIFY THAT I HAVE THIS 22d DAY OF NOVEMBER
2021, SERVED TTIE FOREGOING COMMENTS OF TIIE COMMISSION
STAFtr', IN CASE NO, PAC-E-20-18, BY BIvIAILING A COPY TIIEREOF, TO
TT{E FOLLOMNG:
TED WESTON
ROCKYMO{JNTAIN POWER
I4O7 WEST NORTII TEMPLE STE 330
SALT LAKE CTTY UT MI 16
E-MAIL: [e-mail]
idatrodockets @nacifi corp. com
DATA REQUEST RESPONSE CENTER
E.MAIL OITLY:
datarequest@pacifi corp. com
EMILY WEGENER
ROCKY MOI.'NTAIN POWER
1,007 WN TEMPLE STE 320
SALT LAKE CITY UT 84I 16
E-}vIAIL: emily. weeener@facifi corp.com
CERTIFICATE OF SERVICE