20210720Comments.pdf

MATT HUNTER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE,IDAHO 83720-0074
[phone]
IDAHO BAR NO.10655
Street Address for Express Mail:
11331 W CHINDEN BLVD,BLDG 8,SUITE 201-A
BOISE,ID 83714
Attorneyfor the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN )POWER'S APPLICATION FOR APPROVAL )CASE NO.PAC-E-21-13ORREJECTIONOFTHEPOWER)PURCHASE AGREEMENT BETWEEN )PACIFICORP AND DRY CREEK LLC )COMMENTS OF THE
)COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission,by and through its Attorneyof
record,Matt Hunter,Deputy Attorney General,submits the followingcomments.
BACKGROUND
On May 11,2021,Rocky Mountain Power,a division of PacifiCorp ("Company"),
requested the Commission approve or reject a Power Purchase Agreement ("PPA")with Dry
Creek LLC for energy generated by a 3.4-megawatthydroelectric facility ("Facility").The
Facility is a qualifyingfacility under the Public Utility Regulatory Policies Act of 1978.
The Facility is in Butte County,Idaho.The Facility has been delivering energy to the
Company under a power purchase agreement dated May 2,1986,which expires April 30,2022.
The Company states that the PPA contains published,non-seasonal,non-levelized avoided cost
rates for a 20-year term.The PPA's effective date is May 1,2022.
STAFF COMMENTS 1 JULY 20,2021
STAFF ANALYSIS
Staff recommends approval of the PPA between the Company and Dry Creek LLC.
Staff's review has focused on the 90/110 Rule,capacity payment eligibility,avoided cost rates,
and the long-range forecasting.
90/110 Rule
Staff confirmed the PPA contains the 90/110 Rule as required by Commission Order
29632.The 90/110 Rule requires a QF to provide utilities with a monthlyestimate of the amount
of energy the QF expects to produce.If the QF delivers more than 110 percent of the estimated
amount,then the utility must buy the excess energy for the lesser of 85 percent of the market
price or the contract price.If the QF delivers less than 90 percent of the estimated amount,then
the utility must buy total energy delivered for the lesser of 85 percent of the market price or the
contract price.See Order No.29632 at 20.
The PPA uses a 10-day advanced notice to revise future monthlyestimates.If the
Company develops a web-based or other electronic noticing or scheduling system for the Seller
to provide estimates,the timeframe will be revised to a 5-day advanced notice.Staff believes
any timeframe between a month in advance and 5 days in advance is reasonable.The
Commission allowed a month-ahead timeframe in Order No.33103,which states:
The intent of a QF providing generationestimates has always been to assist theutilityinforecastingandoperationalplanningsothattheutilitycanprovidethe
most reliable service possible to its customers.We find that a provision allowingformonthlygenerationestimateupdatesisconsistentwiththatpurpose.
Later,the Commission also allowed a 5-day timeframe in several cases,recognizing that
monthlyestimates provided closer to the time of delivery can improve the accuracy of input used
for short-term operational planning.See,e.g.,Order Nos.34263 and 34870.
The Company uses the Palo Verde Hub to establish market prices for the purpose of the
90/110 Rule.Staff believes the Company's determination of market prices is fair and
reasonable.
STAFF COMMENTS 2 JULY 20,2021
Capacity Payment Eligibility
Staff is confident that the project has contributed to meeting the Company's need for
capacity during the term of the original 1985 contract and should receive full capacity payments
in the PPA for all generationfrom the Facility.
This QF was paid for capacity at the end of the original contract term.According to
Commission Order No.32697,a QF only receives compensation for capacity when the utility is
capacity deficient,unless it is a renewal/extensionproject that was paid for capacity at the end of
the original contract.In addition,during the QF's original contract term,the Company has added
significant resources to meet its capacity deficiencies,which also qualifies it for immediate
capacity payments as in Case Nos.IPC-E-19-04,IPC-E-19-30,and IPC-E-19-35.
Avoided Cost Rates
Staff reviewed the avoided cost rates proposed in the PPA and verified that the proposed
rates are correct.
Long-Range Forecasting
The Seller agrees to provide an annual update to the 12X24 generationprofile in Section
6.7.1.Althoughthe Commission does not require 12X24 generationprofiles for contracts that
use published rates,Staff does not oppose to this provision agreed upon by the parties.
STAFF RECOMMENDATION
Staff recommends approval of the PPA between the Company and Dry Creek LLC.Staff
also recommends that the Commission declare that the avoided cost prices set forth in the PPA
are justand reasonable,in the public interest,and that the Company's incurrence of such costs
are legitimate expenses.
STAFF COMMENTS 3 JULY 20,2021
Respectfully submitted this a day of July 2021.
Matt Hunter
Deputy AttorneyGeneral
Technical Staff:Yao Yin
STAFF COMMENTS 4 JULY 20,2021
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 20TH DAY OF JULY 2021,SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF INCASENO.PAC-E-21-13,BY E-MAILING A COPY THEREOF,TO THEFOLLOWING:
TED WESTON EMILY WEGENERROCKYMOUNTAINPOWERROCKYMOUNTAIN POWER1407WESTNORTHTEMPLESTE3301407WNTEMPLESTE320SALTLAKECITYUT84116SALTLAKECITYUT84116E-MAIL:[e-mail] E-MAIL:[e-mail]@pacificorp.com
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CERTIFICATEOF SERVICE