20210512Reply Comments.pdf

Y ROCKY MOUNTAIN
POWER
A OVTS|ON Of PACTFTCORP
May 12,2021
1407 W. North Temple, Suite 330
Salt Lake City, Utah 84116r".,iJ Ii\,/EL'l
ltll iiiiT i2 AH ll: I I
: Ii ..- *i,.'l,ri5ii0ll
VIA ELECTRONIC DELIVERY
Jan Noriyuki
Commission Secretary
Idatro Public Utilities Commission
11331 W. ChindenBlvd
Building 8 Suite 20lA
Boise,lD 83714
Re: CASE NO. PAC-E-21-05
IN TIIE MATTER OF THE APPLICATION OF PACIX'ICORP FOR APPROVAL
OR REJECTION OF TIIE PURCHASE POWER AGREEMENT WITH
COMMERCIAL ENERGY MANAGEMENT, INC.
Dear Ms. Noriyuki:
Please find enclosed for filing Rocky Mountain Power's Reply Comments in the above-
referenced matter.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
R.
Vice-President of Regulation
Enclosures
c.*D
Emily Wegener
Rocky Mountain Power
1407 WestNorth Temple, Suite 320
Salt Lake City, Utah 84116
Telephone: [phone]
FAX: [phone]
Email: emily.weqener@pacifi com.com
Attorneyfor RoclE Mountain Power
BEF'ORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION O[' ) CASE NO. PAC-E-21-05
PACTFICORP FORAPPROVAL OR )
REIECTION OF THE PURCHASE POWER ) REPLY COMMENTS OF
AGREEMENT WITH COMMERCIAL ) ROCIff MOUNTAIN POWER
ENERGY MANAGEMENT, INC.
Pursuant to Rule 202.01(d) of the Rules of Procedure of the Idatro Public Utilities
Commission ("Commission"), Rocky Mountain Power a division of PacifiCorp (the "Company")
hereby submits reply comments in the above-referenced case.
On March 3,2021, the Company submitted its Application for Approval or Rejection of
the Purchase Power Agreement with Commercial Energy Management, Inc. ("CEM"). The
Agreement at issue is a Power Purchase Agreement ("PPA") executed February 26, 2021
("Agreement"), under which CEM agrees to use its existing facility, a qualifring facility under the
Public Utility Regulatory Policies Act of 1978, to provide power to the Company.
Commission Staff filed comments on April 28, 2021 ("Staff Comments") and made
recommendations for two modifications to the Agreement. First, the definition of Expected Net
Output, if needed in the Agreement, should be modified to reflect that the forecast is not updated
after contracting and should use the correct amount of 2,310 MWh/year. Second, Commission
Staff recommended that the Agreement be modified to state that the Energy Delivery Schedule
specified in theAgreement would provide'osix months of scheduled energy estimates at all times"
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instead of the three months stated in the Agreement. The Company is willing to make these
modifications and has already reached out to CEM with a draft amendment to the Agreement.
CEM filed public comments onApril 27,2021, recommending that the Commission reject
the Agreement because it contains a provision referred to as the "90/l10" provision and because
of allegations that negotiations were delayed by the Company to o'game the system." CEM
recommends that the Commission reject the Agreement and "send the parties back for true
negotiations that can arrive at a power production agreement that is fair to both PacifiCorp/RMP
and CEM." This recommendation is unprecedented and without merit. The longstanding 90/110
rule has been approved by the Commission and is consistent with law and past practice, as further
detailed in StaffComments. There is no evidence that the Company engaged in any gamesmanship
to delay the execution of the Agreement.
The Commission should uphold the 90/ll0 provision. Under the 90/ll0 rule, energy
delivered by a qualiffing facility in excess of ll0 percent of the amount estimated is priced at 85
percent of the market or contract price, whichever is less. Similarly, if less than 90 percent of the
energy estimated is delivered, the price is also reduced to 85 percent of the market or contract
price, whichever is less. The 90/110 was first upheld by the Commission in 2004 in an Order
dismissing a complaint against Idaho Power.l This provision has been approved in many contracts
since that time and should be approved here.
There is no merit to CEM's argument that the Company gamed the system. The original
PPA between the Company and CEM was set to expire on May 31,2020. The Company first
requested a Voluntary Consent from CEM to determine transmission interconnection progress of
the facility in September20l9. The Company provided CEM with a draft PPAbefore the expiration
of the initial PPA on February 3,2020. At the request of CEM, the Company extended the original
I LI.S. Geothermal, Inc. v. Idaho Power Co., Case No. IPC-E-03-8, Order 29632 at20 (November22,2004).
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PPA so that CEM would have time to resolve necessary interconnection issues. The extension was
signed on March 20,2020. Four days after the extension was signed, on March 24,2020, the
Company executed the small generator interconnection agreement ("SGIA"), which resolved the
interconnection issues. After the SGIA was signed, nothing prevented CEM from working with
the Company to finalize the February 3,2020 PPA. After a period of silence, the Company made
a concerted effort to reengage CEM in negotiations in November 2020by providing CEM with a
draft PPA. Contrary to CEM's statement that PacifiCorp "ignored" CEM's objections, PacifiCorp
made every effort to negotiate the Agreement in a timely fashion.
Throughout its comments, CEM makes allegations that the Company delayed negotiations
for its own "advantage," but provides no proof of Company-caused delay or of Company benefit
from the delay. The cost of PPAs are passed directly to customers, there is no benefit to the
Company for delaying the negotiation of a PPA.
For these reasons, and with the modifications noted above, the Company respectfully
requests that the Commission approve or reject the Agreement as requested in the Company's
Application, subject to the execution of an amendment consistent with Staffs Comments.
Dated this l2th day of May, 2021.
Respectfrrlly submitted by,
ROCKY MOUNTAIN POWER
f,-4ru,**
./Emily We-gener
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake City, Utah 84116
Telephone: [phone]
Email: ernily. we gener(?rrac i ticorp.com
Attorneyfor Roclry Mountain Power
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