20210526Comments.pdf

JOHN R.HAMMOND,JR.
DEPUTY ATTORNEY GENERAL :25IDAHOPUBLICUTILITIESCOMMISSION
PO BOX 83720
BOISE,IDAHO 83720-0074
[phone]
IDAHO BAR NO.5470
Street Address for Express Mail:
11331 W CHINDEN BLVD,BLDG 8,SUITE 201-A
BOISE,ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN )POWER'S APPLICATION FOR APPROVAL )CASE NO.PAC-E-21-11
OR REJECTION OF THE AMENDED )POWER PURCHASE AGREEMENT )COMMENTS OF THE
BETWEEN PACIFICORP AND )COMMISSION STAFF
GEORGETOWN IRRIGATION )
The Staff of the Idaho Public Utilities Commission ("Staff')submits the following
comments.
BACKGROUND
On April 8,2021,Rocky Mountain Power,a division of PacifiCorp ("Company"),
requested the Idaho Public Utilities Commission ("Commission")approve or reject an
amendment to a power purchase agreement (the "Amended PPA"or the "Amendment")with
Georgetown Irrigation("Georgetown").Georgetown generates energy generated by a 330-
kilowatt hydroelectric facility ("Facility").The Facility is a qualifying facility ("QF")under the
Public Utility Regulatory Policies Act.
The Facility is in Bear Lake County,Idaho.The Facility has been delivering energy to
the Company under a power purchase agreement dated July 2,1984,which expired on March 31,
2021.The Company states that the Amended PPA extends the term of the Power Purchase
STAFF COMMENTS 1 MAY 26,2021
Agreement for one year,from April 1,2021 until March 31,2022 and contains energy only
payment for that period.
The Company requests the Commission declare all payments for purchases of energy
under the Amended PPA be allowed as prudentlyincurred expenses for ratemaking purposes.
STAFF ANALYSIS
Staff recommends approval of the Amended PPA contingent on the parties filing an
update to it that includes the correct execution date.Staff's review has focused on the 90/110
rule,capacity payments,the lapsed contract period,the avoided cost rates,and the contracting
date.
90/110 Rule
Staff believes it acceptable to not include the 90/110 rule in the Amended PPA for the
limited period during which it is effective.However,when the long-term renewal contract is
submitted for Commission approval,the parties need to include the 90/110 rule.In addition,the
renewal contract should be filed with sufficient time for the Staff to review and for the
Commission to deliberateprior to authorization so that the new contract can be authorized prior
to the expiration of the Amended PPA.
The original 1984 contract did not include the 90/110 rule,because it was signed before
the Commission adopted the rule in Order No.29632.1 However,the Amended PPA is limited
to a year serving as a short-term bridge to allow the Seller and the Company to secure the
required transmission interconnection agreement so that a new long-term renewal contract can be
negotiated.This case is similar to PAC-E-20-09,where Commission allowed the parties to
amend their contract without inclusion of the 90/110 requirements so that the QF could secure an
interconnection agreement and continue operation under a new long-term contract.
Capacity Payment
Owners of QFs only receive compensation for capacity when the utility is capacity
deficient,unless they are renewal/extension projects that have been paid for capacity at the end
of the original contracts (see Order No.32697)or have contributed to meeting the utility's
i Order No.29632 required QFs to providemonthly estimates to be entitled to a published rate contract.
STAFF COMMENTS 2 MAY 26,2021
capacity needs during the original contract terms (see e.g.,Case Nos.IPC-E-19-04,IPC-E-19-30,
and IPC-E-19-35).
Althoughthis Facility is paid for capacity at the end of the original 1984 contract and has
contributed to meeting the Company's need for capacity during its contract term,the parties
agree to only use avoided cost rates of energy with no capacity payments.Staff believes this
arrangement is reasonable and has the benefit of providing an incentive for the Seller to finalize
the transmission interconnection agreement in a timely manner.
Lapsed Contract Period
The Amended PPA was signed on March 30,2021.According to Paragraph 4 of the
Amended PPA,it will not be effective until the Commission has approved it.Therefore,there is
a lapsed contract period between April 1,2021,and the final effective date.
Because the rate paid to the Seller under the Amended PPA only includes avoided cost
rates of energy with no capacity payments,Staff recommends that the same rate structure be used
during the lapsed contract period.
Non-seasonal Hydro Avoided Cost Rates
Staff reviewed the non-seasonal hydro avoided cost rates contained in the Amended PPA
and believes the rates are correct.The Amended PPA was signed on March 30,2021,and the
parties used the rates authorized at that time.
Contracting Date
Page 5 of the Application states that the Seller provided a signed copy of the Amended
PPA on March 25,2021,and the Company executed the agreement on March 30,2021.Staff
verified that the Amended PPA was fully executed on March 30,2021,based on the Company's
signature.However,the opening paragraph of the Amended PPA is dated March 25,2021.Staff
believes the date should be corrected to March 30,2021,the execution date of the Amended
PPA,and should be corrected.
STAFF COMMENTS 3 MAY 26,2021
STAFF RECOMMENDATION
Staff recommends approval of the Amendment PPA contingent on the parties filing an
updated Amended PPA that includes the correct execution date.Staff also recommends that the
Commission declare that the avoided cost prices set forth in the Agreement be allowed as
prudently incurred expenses for ratemaking purposes.
Respectfully submitted this day of May 2021.
on R.Hammond,Jr.
eputy AttorneyGeneral
Technical Staff:Yao Yin
i:umisc/comments/pace2l.l ljhyy comments
STAFF COMMENTS 4 MAY 26,2021
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 26TH DAY OF MAY 2021,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF,IN
CASE NO.PAC-E-21-11,BY E-MAILING A COPY THEREOF,TO THE
FOLLOWING:
TED WESTON EMILY WEGENER
ROCKY MOUNTAIN POWER ROCKY MOUNTAIN POWER
1407 WEST NORTH TEMPLE STE 330 1407 WN TEMPLE STE 320
SALT LAKE CITY UT 84116 SALT LAKE CITY UT 84116
E-MAIL:[e-mail] E-MAIL:[e-mail]
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DATA REQUEST RESPONSE CENTER
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SECRETARY
CERTIFICATE OF SERVICE