20210329Application.pdf

Y ROCKY MOUNTAIN
POWER
March 29,2021
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Ma7 W. North Temple, Suite 330
Salt Lake City, Utah 84'116
YA ELECTRONIC DELIVERY
Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
ll33l W. ChindenBlvd
Building 8 Suite 20lA
Boise,lD 83714
Re: CASE NO. PAC-E-21-08
IN THE MATTER OF THE JOINT APPLICATION BETWEEN ROCKY
MOUNTAIN POWER AND P4 PRODUCTION, L.L.C. REQUESTING
APPROVAL OF AN AGREEMENT TO RETIRE RECS
Dear Ms. Noriyuki:
Please find for electronic filing Rocky Mountain Power's Application and Attachment A in the
above-referenced matter.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
Joelle R.
Vice-President of Regulation
cc: Randy Budge
"^-D
Adam Lowney (15B#10456)
McDowell Rackner Gibson PC
419 SW 1lft Avenue, Suite 400
Portland, OR 97205
Telephone: [phone]
Fax: [phone]
Email: [e-mail]
Emily Wegener (Idaho Bar application pending)
1407 WestNorth Temple, Suite 320
Salt Lake City, Utah 84116
Telephone No. (80 l) 220-4526
Mobile No. [phone]
Email: [e-mail]
Attorneys for Roclcy Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN TIIE MATTER OF TIIE JOINT )
APPLICATION BETWEEN ROCKY )
MOUNTAIN POWER AND P4 PRODUCTION, )
L.L.C. REQUESTING APPROVAL OF AI\t )
AGREEMENT TO RETIRE RECS )
CASE NO. PAC.E.21-08
APPLICATION
PacifiCorp, doing business as Rocky Mountain Power (the "Company") and P4
Production, L.L.C., ("P4"), an Idaho customer of the Company, pursuant to ldaho Code $ 6l-
328, hereby jointly request approval from the Idaho Public Utilities Commission
("Commission") of the P4 System REC Retirement Agreement dated March 24, 2021
("Agreement") between PacifiCorp and P4 (together the "Parties"). The Agreement states that
the Company will retire, rather than sell, P4's allocated share of renewable energy certificates
("RECs") generated from the Company's system resources. In support of this Application, the
Parties states as follows:
I. BACKGROUNI)
1. The Company is a public utility in Idaho pursuant to Idaho Code $ 6l-129 and
is subject to the jurisdiction of the Commission. The Company provides retail electric service
APPLICATION OF
ROCKY MOUNTAIN POWER
Page I
to approximately 84,000 customers in portions of Fremont, Madison, Teton, Clark, Jefferson,
Lemhi, Oneida, Bannock, Franklin, Caribou, Butte, Bingham, Bear Lake and Bonneville
counties.
2. P4 and its predecessor in interest Monsanto have operated the Soda Springs
phosphate plant continuously since l95l to produce elemental phosphorus, the primary
building block for the active ingredient glyphosate in Roundup herbicide, the foremost weed-
control agent in the world.
3. P4's Soda Springs plant is the largest single user of electricity on PacifiCorp's
six-state system, with a load of approximately 200 megawatts ("MW') and 1.5 million
megawatt-hours ("MWH") of electricity per year-about 40 percent of PacifiCorp's energy
use in Idaho. P4 has been an interruptible special contract customer of PacifiCorp and its
predecessor (Utah Power &Light Company) since plant operations began in 1951.
4. P4 owns the Soda Springs plant and mines as a wholly owned subsidiary of
Monsanto. In October2018 Bayeracquired all assets of Monsanto. Monsanto is still doing
business as a member of the Bayer group of companies.
5. [n December 2019 Bayer announced a corporate goal to achieve 100 percent of
its global electricity purchase with renewable electricity by 2030. Converting the Soda Springs
plant to renewable electricity is a high priority. To achieve this goal, Bayer's initial strategy
beginning in 2021 includes retirement of its share of PacifiCorp's system RECs allocated to
Idaho together with possible purchase of additional RECs on the market.
6. Additionally, Bayer is seeking to implement renewable energy supply
agreements with PacifiCorp to acquire renewable energy from PacifiCorp and third-party
renewable energy developers. While no specific interim goals or timetables have been
APPLICATION OF
ROCKY MOUNTAIN POWER
Page2
established, it is Bayer's desire and intent to make significant progress each year starting in
2021.
7. To facilitate this goal and negotiate a renewable energy service agreement and
intemrptible energy service agreement, the Parties have engaged in ongoing discussions for
last two years. During these discussion RECs have been considered an option to help Bayer
achieve its renewable goals.
8. A large portion of Bayer's renewable energy goal can be achieved from the
Company's own fleet. Based on the 2020 Fuel Mix report, when hydro production is included
over 22 percent of the energy from the Company's fleet is generated by renewable resources.
That percentage will continue to increase and is expected to approach 50 percent by 2030.
9. On March 24,2021,the Parties entered into the Agreement, a copy of which is
attached as Attachment A to this Application, under which the Company agreed to retire, rather
than sell, P4's allocated share of RECs generated from system resources. Subject to
Commission approval, the Agreement will be effective starting calendar year 2021.
10. To retire system RECs, the Company will discontinue sale of ldaho-allocated
system RECs associated with P4's calendar-year load ("P4's System RECs"). The REC
revenue that P4 would otherwise have been allocated from the sale of system RECs generated
after 2020 will be discontinued. P4 will continue to receive REC revenue from the sale of any
RECs generated prior to 2021.
I l. If approved by the Commission, the Agreement will automatically renew from
year to year. However, either Party may elect to terminate the Agreement with written notice
of termination delivered no later than December I't in order to effect a termination on
December 3l't of that year, before REC sales are made for the following year.
APPLICATION OF
ROCKY MOUNTAIN POWER
Page 3
12. RECs from the Company's system resources of owned generation facilities and
purchase power agreements are allocated to states under the Commission-approved 2020
Protocol cost allocation method. System RECs are allocated to ldaho based on the System
Generation ("SG") factor.
13. P4's share of Idaho allocated RECs will be proportional to P4's SG factor
compared to Idaho's SG factor. P4 represented approximately 30 percent of Idaho's SG factor
in 2019. This percentage will be updated annually to align P4's proportion of RECs with
Idaho's allocation.
14. Treatment of Idaho's remaining share of RECs will be unchanged. The
Company will continue best efforts to monetize the RECs and pass any REC revenue onto
customers. This Agreement will not impact other customers because revenue from the sale of
P4's share of system RECs was previously passed back to P4 and not to other customers.
15. In the Company's next general rate case, planned to be filed in May 202l,the
Company will remove P4's allocation of REC revenues from the results of operation. This will
establish zero REC revenues as P4's base in rates and for the energy cost adjustment
mechanism ("ECAM").
16. Based on the terms of this Agreement, subject to Commission approval, the
Company has withheld Bayer's share of 2021 RECs from any auctions or sales. Beginning on
January 1,2021, Bayer will no longer receive a REC revenue credit for RECs generated after
December 31, 2020. If the Company was able to sell RECs generated prior to 2021 P4 will
receive credit for its share of those REC revenues through the ECAM.
17. P4 will pay the Company $15,000 annually to cover the Company's additional
administrative burden for administering this program, including the Company's support of any
APPLICATION OF
ROCKY MOUNTAIN POWER
Page 4
external audit. P4 will make this payment 30 days after receiving an invoice from the
Company, which will be billed in advance of each calendaryear. The payment shall be deemed
a prepayment for administration of the program for the following year. The Company may
revise the annual administrative charge by providing written notice to P4 by November I't prior
to the year in which the change will take effect.
18. Idaho Code $ 6l-328 governs a utility's sale of electric utility property, and
states that a utility cannot "merge, sell, lease, assign or transfer, directly or indirectly, in any
manner whatsoever, any such property or interest therein, or the operation, management or
control thereof, or any certificate of convenience and necessity or franchise covering the same,
except when authorizedto do so by order of the [Commission]."
19. The statute further states that prior to any sale the utility must file an application
with the Commission. Before approving the application the Commission shall find: "(a) That
the transaction is consistent with the public interest; (b) That the cost of and rates for supplying
service will not be increased by reason of such transaction; and (c) That the applicant for such
acquisition or transfer has the bona fide intent and financial ability to operate and maintain said
property in the public service."
20. The Parties represent that this Agreement meets the applicable requirements of
Idaho Code $ 6l-328. The transaction is consistent with the public interest by helping P4
achieve its renewable goals while not increasing costs or rates of other customers. The
Agreement does not impact the Company's operations or ability to continue to provide safe,
reliable, and affordable electric service to its customers.
II. REOUEST FOR APPROVAL
21. The Parties hereby jointly petition the Commission to approve the Agreement
APPLICATION OF
ROCKY MOUNTAIN POWER
Page 5
which will help P4 achieve its renewable energy goals without detrimental impact to other
customers
III. COMMUNICATION
22. Communications regarding this Application should be addressed to:
If to Rocky Mountain Power:
Ted Weston
Emily Wegener
1407 W. North Temple, Suite 330
salt Lake city, utah 84116
Telephone : [phone]
Email : ted.weston@pacifi corp.com
emi ly.we gener@pacifi com.com
If to Bayer:
Randy Budge
Racine Olson, PLLC
201 East Center
Pocatello,lD 83204
Email: [e-mail]
In addition, the Company respectfully requests that all data requests regarding this
matter be addressed to one or more of the following:
By e-mail (preferred)
By regular mail
APPLICATION OF
ROCKY MOUNTAIN POWER
datarequest@pac i fi corp.com
Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, OR 97232
IV. MODIFIED PROCEDURE
23. The Parties believe that a hearing is not necessary to consider the issues
presented herein, and respectfully request that this Application be processed under Modified
Procedure pursuant to rules 201-ZI0 of the Rules of Procedure of the Idaho Public Utilities
Commission. If, however, the Commission determines that a technical hearing is required, the
Page 6
Parties stand ready to prepare and present testimony in such hearing.
V. CONCLUSION
WffiREFORE, the Parties respectfully request that the Commission issue a final order
authorizing that this maffer be processed under Modified Procedure and approving the
Agreement as filed.
DATED this 29ft day of March,z}2l.
Respectfu lly submitted,
By
Adam Lowney r04s6)
McDowell Rackner Gibson PC
419 SW 1lm Avenue, Suite 400
Portland, OR 97205
Telephone: [phone]
Fax: [phone]
Email: [e-mail]
Emily L. Wegener
(Idaho Bar admission pending)
1407 WestNorth Temple, Suite 320
Salt Lake Ciry, Utah 84116
Telephone No. [phone]
Mobile No. [phone]
Email: Emi ly.wegener@.pacifi com.com
Attorneys for Rocley Mountoin Power
APPLICATION OF
ROCKY MOUNTAIN POWER
PageT
Attachment A
PacifiCorp - H(ECI/flON COPY
P4 System REC Retirement
Agreement
A. WHEREAS, P4 Production L.L.C, a Delaware corporation ('P4"), is an ldaho
cusf,omer of PacifiCorp. P4 is a Bayer Corporation subsidiary.
B. WHEREAS, this P4 SystemREC RetirementAgreemrent (Agreement) shallreflect
ths intent of the parties to support P4's goal to account for and retire certain
PacifiCorp system Renewable Energy Credits (RECs).
C. WHEREAS, this Agreement is particular to PacffiCorp's multi-state system RECs
allocated to Idaho and associated with P4 load.
D. WHEREAS, P4 will be provided provisional aad final reports to aid the hacking of
REC generation and retirement.
E. WHEREAS, P4 will not be able to select particular resource types for allocated
system REC retireinent purposes associated with this Agreement.
l. P4 System REC Sales and Revenue Discontinurnce
a. Subject to subsection 1.e. below, this Agreement shall be effective starting
calendar year 2021.
b. ln order to retire system RECs for P4, PacifiCorp will discontinue sale of Idaho-
allocated system RECs associated with P4's calendar year load ("P4 Systelu
RECs").
The REC revenue that P4 would otherwise have been allocated from the sale of
System RECs generated after 2020 will be discontinued.
c. P4 will continue to receive REC revenue from the sale of RECs ge,nerated prior to
242r.
d. This Agreeme,nt will automatically renew from year to year. However, if either
P4 or PacifiCorp elect to terminate then written notice of termination shall be
P4 REC Agreerneut
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PacifiCorp - EXECUTION COPY
delivered no later than December I in order to effect a termination on December
31.
e. All ofthe provisions herein are subject to regulatory changes, orders or approvals.
It is PacifiCorp's intent to seek ldaho Public Utilities Commission approval of
this Agreement and all of thCI terms of this instnrment are subject to and
conditioned upon approval by that body.
2, REC Allocation Methodologr
s. PacifiCorp System RECs: RECs from PacifiCorp's system of resources (owned
generation facilities and purchase power agreements) are allocated to states undor
state regulatory cost allocation protocols. (PacifiCorp resources that are situs
assigned or fully captured in the rate base of certain states or tlrat are qpecifically
assigned to particular customers by agreement are excluded from PacifiCorp's
System REC allocation.)
b. PacifiCorp $ystem RECs are allocated to Idaho based on the SystemGeneration
(SG) factor. The SG factor will be updated by PacifrCorp annually.
c. P4's share of RECs allocatedto Idaho will beproponional to P4's Idaho load for
the Reporting Year (e.g., approximately 30% of the ID load for 2020)
3. Annual REC Position Report ('Position Report")
a. Generation Yean The calendar year in which quali$ing enerry is
generated with which RECs are associated. (In other contexts this is the
REC vintage year)
b. Retirement Year: The Retirment Year is the year following the
Generation Year and the period within which actual load and RECs for the
Generation Year are aken into &ccount, RECs are retired and the
Retirement Report is issued.
c. See Exhibit A for an example of the of Generation and Retirement Years
and associated tasks.
P4 REC Agreement
2 of?
PacifiCorp - DGCUTION COPY
d. Position Report: In October, PacifiCorp will provide a report to P4 of
P4's REC position for the Generation Year.
i. The Position Report will provide a sum of P4 System RECs by
technolory tpe (fuel mix) (i.e. wind, solar, hydro),ii. The Position Report will not include details like generation month or
identification ofthe specific resourres tbat ge,nerated the RECs.
iii. The Position Report will reflect actual generation through May and
forecast generation for the period of June-December.
iv. The Position Report will reflect an estimation of P4 RECs associated
with load for the Generation Year.
v. The estimation of P4's RECs in the Position Report will be based on
P4's load and the SG factor from the previous year.
vi. PacifiCorp will undertake commercially reasonable efforts to ensure
that the forecast and the report are reasonable and that actual
informationis accurate; howevero the REC Position Report is
provisional, and P4's reliance thereupon is at P4's sole risk and
PacifiCorp makes no r€,prcsentation or warranty as to its content.
4. Generadon Year RBC Retirement Report ("Retirement Report')
a. By mid-October of the Retirement Yem, PacifiCorp will retire and report P4's
final share of system RECs from the prior Generation Year in accordance with the
REC Allocation Methodology under Section 2 above updated to reflect actual
load and corresponding SG factor for the Generation Year.
b. PacifiCorp will provide as part ofthe Retirement Report a WREGIS Report to
zupport the REC retiremmt on P4's behalf for audit and verification purposes.
The WREGIS report includes specffic generating resources, volumes, REC
vintage (year and monlh it was generatsd) and retirement date.
c. REC retirements carnot be effected before all REC's are generated and
ransferred and total system allocation occurs.
d. The actual quantity of Generation Year RECs retired in the subsequent
Retirement Year will vary from the estimation in the Position Re,port. Actual
REC volumes retired in the Retirement Year will be based on actual generation
and final SG factor calculated for the Generation Year.
P4 REC Agreement
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PacifiCorp - E)(ECt.l.ilON C0PY
e, Pacificorp will make commercially reasonabls offorts to enswe that the REC
retirement report is accurate; however, P4's reliance on the REC Retirement
Report is at P4's sole risk and PacifiCorp makes no representation or waranty as
to its content.
5. RECRFP
a. If P4 chooses to participate in PacifiCorp's Reverse Request for Proposal GfP)
for sale of system RECs and completes a REC purchase tansaction thereunder,
the REC retirernent terrrs associated with the RFP transaction shall be negotiated
indepcndent of the P4 system share of REC retirements under this Agreement.
b. P4 shall not be provided information in either the Position Report or the
Retirement Report that, in PacifiCorp's reasonable judgment, would provide P4 a
competitive advantage in the REC RFP.
6. Audit Support
If P4 chooses to pay for and conduct an independent audit of the Retiremeat Report then
PacifiCorp will, upon request, supply or, at PacifiCorp's election, make available
additioaal historical generation and historical allocation iaformation to the auditor to aid
validation. It in PacifiCorp's judgement, material provided to an auditor may provide P4
a competitive advantage in any REC RFP or otherwise compromise the confidentialrty or
sensitivity of other customer information then PacifiCorp may require that the auditor
execute a confidentiality agreemmt before PacifiCorp will zupply or provide access to
materials in support of an audit. Such a confidentiality agreement may require that the
auditor hold detailed supporting material confidential from P4 but shall allow for the
auditor to otherrrise verifr the validity of PacffiCorp reports delivered to P4 hereunder.
7. Administrative
a. PacifiCorp will continue to report P4 System RECs retired to regulatory
authorities and shall eccount for those RECs as may otherwise be required by Iaw.
b. To cover PacffiCorp's administrative burden for administering this program and
supporting any extenral audit, P4 shall pay PaciflCorp $15,000 within 30 days of
P4 REC Agreeinent
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PacifiCorp - HGCUTION COPY
execution of this Agreeinent and recciving the invoice from PacifiCorp.
Thereafter, P4 shall pay in advance to any cal€odar year to PacifiCorp the annual
amount of $15,000 within 30 days after recciving the iuvoice. This payment shall
be deemed a pr€payment for administration of the program for the following year.
PacifiCorp may revise thc annual administrative charge md shall inform P4 of
any change for future years inthe ftober Position Report.
P4 shall also pay to PacifiCorp any WREGIS fee associated with retireme,nt of
RECs in accordance with the most recently pttblished schedule of fees. (e.g.,
https://www.wecc. orslAd ministrative/WREGIS%20Fee%20Matrix. odf)
c. In the event ttrat this Agreement is not approved by the Commission, is approved
with conditions or othennise in a form that either party finds macceptable, or is
othemrise terminated then P4's System RECs that were not retired shall be
returned to the pool of system RECs managd by PacifiCorp and PacifiCorp will
resume allocation of associatd REC rcvenue to P4.
8. Legal
a. Waiver of Jurv Trial. To the fullest exteirt pemrittd by law, each of the Parties
hereto waives any right it may have to a trial by jury in respect of any litigation
directly or indircdy arising out of, under or in connection with this Agree,ment
Eaeh Party further waives any right to consolidate any action in which a jury tial
has been waived with any other action in which a jury tial cannot be or has not
beeir waived.
b. Governins [,aw: Jruisdictiou V€nue. All provisions of this Agresment and the
rigfots and obligations of the Parties shall in all cases be govemed by and constnred
in accordance with the laws of the state of Idalro applicable to contracts executed
in and to be wholly performed in Idaho by Pereons domiciled in the state of ldaho.
Any dispute relating to this Agreerne,nt shnlt be brought before the Federal oourts
located within the state ofldaho, or state courts of the state of ldalro, and each Party
consents to the exclusive jurisdiction of such forum (and of the ap,pellate courts
therefrom) in any such suit, action or proceediug. Furthermore, each Party waives,
to the exteirt permitted by law, any objection which it may now or hereafter have
to the laying of the venue of any zuch suit action or proceeding in any such fonrm
or that any zuch suig action or proceeding which is brought in any such forum has
beem brought in any inconve,nient forum. If for any reason service ofprccess cannot
be found in the state of Idaho, prccoss in any zuch zuit, action or proceeding may
be serrred on a Prty anywhere in fte worl( whether urithin or without the
jurisdiction of any strch forum.
P4 REC Agreeinent
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PacifiCorp - E)(ECUTION COPY
c. Limitation on Damae€s. Under no circumstmces, shall either party be liable for
any special, indirect, incideirtal, cooscxpe,ntial, punitive, or exemplary damages.
d. Execution This instument may be exoouted in counterparts exchmged by digtal
tansmission
P4 REcAgreem€nt
6 of7
For
Its:
Ia C€O
Date:s/or /r--t/,
ForP4
RogerY[. Gibson
Its: Pnesident P4 Production, L.L.C.,
A subcidiary of Bayer Corporation
Date:
PacifiCorp - EXECUTION C0Pf
c. Limitatior sr Damacgs. Urder no circumstanceq $all cithcr perty bc liablc for
any spocial, irdircct, incidcntal, conseqncotial, punitive or excmplary damages.
d. Execution. This insuumant mry bc exocuted in counterparts cxchurgcd by digital
hansrnission.
P4 RBC Agrcemcnt
6 af7
ForPrcifiCorp For
C
Gibsdt
Its Pr,esideot, P4 Producliom, L.L.C.,
A BapCoryoation
3 lb 2ot1
PacifiCorp - E)(ECUTION COPY
EXf,IBIT A
TO
P4 REC AGREEMTNT
REC Generafior tnd ReportingEvents Exemple
P4 REC Agreement
7 of?
Action
Year
2021
(GeirerationYear for
2021)
2022
(Retirement Year for
2021)
(Generation Year for
2022)
2023
(Retireinent Year for
2A22)
(GenerationYear for
zan)
Actions . Oct 2021 Anowl
REC Position
Report provided
by RMPc 2021RECs
g€o€rated and
preliminarily
recorded
. 2A2l RECs tnre
up to actual and
SG factoro Retire202l
RECso Retireme,nt
Report October
2022c Oct2022
Annual REC
Position Report
provided by
RMPt 2022RECs
generated and
preliminarily
recorded
o 2022RECstue
up to actual and
SG factoro Reare2022
RECsr Retirement
Report October
2W2. ad2023
AnnualREC
Position Report
provided by
RMPo 2023RECs
generatod and
preliminerily
recorded