20210525Reply Comments.pdf

1407 W. North Temple, Suite 330 Salt Lake City, Utah 84116 May 25, 2021

VIA ELECTRONIC FILING Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission 11331 W. Chinden Blvd Building 8 Suite 201A Boise, ID 83714

Re: CASE NO. PAC-E-21-06
IN THE MATTER OF THE APPLICATION OF PACIFICORP FOR APPROVAL
OR REJECTION OF THE PURCHASE POWER AGREEMENT WITH CHESTER DIVERSION HYDRO PROJECT

Dear Ms. Noriyuki:
Please find attached Rocky Mountain Power’s Reply Comments in the above-referenced matter. Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at [phone].
Very truly yours,
Joelle R. Steward Vice-President of Regulation
Enclosures

RECEIVED
2021 May 25, PM 4:47
IDAHO PUBLIC
UTILITIES COMMISSION

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Emily Wegener (ISB #11614, admission pending) Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake City, Utah 84116 Telephone: [phone] FAX: [phone] Email: [e-mail]

Attorney for Rocky Mountain Power BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF PACIFICORP FOR APPROVAL OR REJECTION OF THE PURCHASE POWER AGREEMENT WITH CHESTER DIVERSION
) CASE NO. PAC-E-21-06 ) ) REPLY COMMENTS OF ) ROCKY MOUNTAIN POWER

Pursuant to Rule 202.01(d) of the Rules of Procedure of the Idaho Public Utilities
Commission (“Commission”), Rocky Mountain Power, a division of PacifiCorp (the “Company”)
hereby submits reply comments in the above-referenced case.
On March 10, 2021, the Company submitted its Application for Approval or Rejection of
the Purchase Power Agreement with Chester Diversion Project (“Chester”). The agreement at issue
is a Power Purchase Agreement (“PPA” or “Agreement”) executed February 26, 2021, under which
Chester agrees to use its existing facility, a qualifying facility under the Public Utility Regulatory
Policies Act of 1978, to provide power to the Company.
Commission Staff filed corrected comments on May 6, 2021 (“Staff Comments”),1 and
made recommendations for three modifications to the Agreement. First, Commission Staff
recommends that the estimated net output should increase from 5,481,400 kilowatt-hours (“kWh”)
to 6,580,300 kWh based on a mistake in the forecasted energy for June. Second, Commission Staff
recommended that the Agreement be modified to correct the “Maximum Delivery Rate” to
1 Commission Staff filed comments on May 4, 2021, and filed corrected comments on May 6, 2021.
RECEIVED
2021 May 25, PM 4:47
IDAHO PUBLIC
UTILITIES COMMISSION

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2.0 megawatts from 2.0 megawatt-hours, which was a typographical error in the PPA. The
Company is willing to make these modifications and understands that Chester is also amenable.
Commission Staff also recommends using the updated capacity deficiency date that was
issued on February 9, 2021, two days before Chester executed the PPA and two and a half weeks
before the Company executed it on February 26, 2021. Specifically, Commission Order No.
34918 updated the Company’s projected capacity deficiency from July 2028 to July 2029. The
Commission updated the capacity deficiency based on the Company’s application, which was
filed on October 6, 2020 and identified in the Company’s 2019 Integrated Resource Plan.
Commission Staff recommends that for 2028, one year of a twenty-year contract term, Chester’s
compensation be reduced to account for this update. The Company leaves this pricing decision to
the Commission and provides the following background as context for that decision.
While Chester initially reached out to the Company for a draft PPA in September of 2019,
the proposed project was not typical. Because of Chester’s location and interconnection issues,
Chester decided to proceed as an off-system resource. Chester requested a draft PPA for an off-
system resource on May 11, 2020, and the parties exchanged several drafts over the next months.
On January 5, 2021, Chester proposed a final change to the PPA that required Company
approval. After the Company reviewed the revised PPA the contract was sent to Chester on
February 11, 2021, which they signed and returned to the Company that day.
The Commission has previously acknowledged that “QFs are paid based on the costs that
the utility avoids” and that avoided cost rates must be “just and reasonable to electric consumers
of the utility”2 If customers are required to pay for a capacity contribution that Chester is not

2 In the Matter of Rocky Mountain Power Company’s Petition to Modify Terms and Conditions of PURPA Purchase Agreements, PAC-E-15-03, Order No. 33357, 2015 WL 5002133 at *19 (August 20, 2015).

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actually making, they are paying more than the utility’s avoided cost. That said, negotiations on
this PPA were complete at the time the updated capacity deficiency period was put in place.
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 correction of the errors noted by Commission Staff and any
amendment to capacity contribution payments required by the Commission’s decision.

Dated this 25th day of May 2021.

Respectfully submitted by, ROCKY MOUNTAIN POWER

_____________________________
Emily Wegener Rocky Mountain Power 1407 West North Temple, Suite 320
Salt Lake City, Utah 84116
Telephone: [phone] Email: [e-mail] Attorney for Rocky Mountain Power