20210729Comments.pdf

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ERICK SHANER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO, 5214
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Street Address for Express Mail:
1I33I W CHINDEN BLVD, BLDG 8, SUITE 2OI-A
BOISE, TD 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN
POWER'S APPLICATION FOR APPROVAL
OR REJECTION OF THE POWER
PURCHASE AGREEMENT BETWEEN
PACIFICORP AND MINK CREEK HYDRO
LLC
CASE NO. PAC.E.2I-I4
COMMENTS OF THE
COMMISSION STAFF
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STAFF OF the Idaho Public Utilities Commission, by and through its attomey of record,
Erick Shaner, Deputy Attorney General, submits the following comments:
BACKGROUND
On June 11,2021, Rocky Mountain Power, a division of PacifiCorp ("Compotry"),
requested the Commission approve or reject a Power Purchase Agreement ("PPA") with Mink
Creek Hydro LLC ("Seller") for energy generated by a2.91-megawatt hydroelectric facility
("Facility"). The Facility is a qualifuing facility under the Public Utility Regulatory Policies Act
of 1978.
The Facility is in Franklin County, Idaho near Preston. The Facility has been delivering
energy to the Company under a power purchase agreement dated May 21, 1985, which expires
March 31,2022. The Company states that the PPA contains published, non-seasonal, non-
levelized avoided cost rates for a 2O-year term.
1STAFF COMMENTS JULY 29,2021
STAFF ANALYSIS
Staff s review has focused on the nameplate capacity rating, capacity payment eligibility,
avoided cost rates, the 90/l l0 Rule, and the long-range forecasting. Staff recommends that the
Commission approve the agreed upon PPA with two sets of rates, one with avoided cost of
capacity and avoided cost of energy for up to 2.70 Megawatt-hours ("MWh") each hour and the
second only with avoided cost of energy for production above that level until the Company's
first capacity deficiency date.
Nameplate Capacity Rating
The 1985 contract listed the nameplate capacity rating of the Facility at2.70 MW. The
as-built nameplate capacity rating was 2.95 MW. There has been no modification to the
generator since the original installation. See Response to Staff s Production Request No. 1.
In PacifiCorp's 2019 Integrated Resource Plan, the peak capacity contribution for the
Facility was 1.02 MW. The contribution was determined from the resource's generation in
MWh for the year and divided by the hours in the year to calculate the average MW. See
Response to Stafls Production Request No. 3. The actual capacity payment amount that the
Facility will receive depends on its actual generation, instead of its nameplate capacity rating.
Capacity Payment Elieibiliw
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 capacity payments in
the proposed PPA for generation for the first 2.70 MWh each hour from the Facility.
This QF was paid for capacity at the end of the original contract term, and according to
Commission Order No. 32697, a QF only receives compensation for capacity when the utility is
capacity deficient, unless it is a renewal/extension project 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 qualihes 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
The proposed PPA allows immediate capacity payments each hour up to 2.70 MWhs,
while generation amounts in excess of 2.70 MWhs would not receive capacity payments until
2STAFF COMMENTS JULY 29,2021
2029, the first deficit year. Staff looked at historical generation from the facility and did not see
an indication that the Facility would exceed the 2.70 MWh hourly cap as proposed. See
Response to Staff Production Request No. 2. Staff recommends approval of the PPA and
Exhibits as filed. These rates are fair and reasonable and are based on Commission approved
published rates.
90/110 Rule
The 90/110 Rule requires the seller of a qualifying facility to provide utilities with a
monthly estimate of the amount of energy the seller expects to produce. If the seller 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 seller 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 at20.
Staff confirmed the PPA contains the 90/110 Rule as required by Commission Order
No. 29632 and believes that the advanced notice provisions and market prices used for
determining prices outside of the 90/ll0 band are reasonable.
Advanced Notice
The PPA uses a l0-day advanced notice to revise future monthly estimates. 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 generation estimates has always been to assist
the utility in forecasting and operational planning so that the utility can
provide the most reliable service possible to its customers. We find that a
provision allowing for monthly generation estimate updates is consistent
with that purpose.
Later, the Commission also allowed a 5-day timeframe in several cases, recognizing that
monthly estimates provided closer to the time of delivery can improve the accuracy of input used
for short-term operational planning. See Order Nos. 34263 and 34870.
JSTAFF COMMENTS JULY 29,2021
Market Prices
The Company uses Palo Verde Hub to establish market prices for the purpose of the
90/l l0 Rule. Staff believes the Company's determination of market prices is fair and
reasonable.
Two Sets of Avoided Cost Rates
Prior to the first deficit year, the Company has proposed to use a Weighted-Average
Conforming Energy Purchase Price based on two sets of rates, one with immediate capacity
payments and one without, as the contract price when comparing to market price when energy
production is outside the 90/110 band. Staff recommends approval of this methodology.
Long-Range Forecastine
The Seller agrees to provide an annual update to the 12X24 generation profile described
in Section 6.7.1 of the PPA. Although the Commission does not require 12X24 generation
profiles for contracts that use published rates, Staffdoes not oppose this provision agreed upon
by the parties.
Interconnection Agreement
The Seller and the Company are in the process of securing a new stand-alone generation
interconnection agreement that will replace the interconnection provisions in the expiring PPA.
This generation interconnection agreement is required before the PPA becomes effective. Staff
recommends it be filed in this case when executed.
STAFF RECOMMENDATION
Staff recommends:
a. The Commission approve the agreed upon PPA and exhibits as filed;
b. The executed stand-alone generation interconnection agreement be filed with the
Commission; and
c. The Commission approve the PPA and find that the avoided cost prices set forth
in the PPA are prudently incurred expenses for ratemaking purposes.
4STAFF COMMENTS JULY 29,2021
Respectfully submitted this 21 tI
day of July 2021
Erick Shaner
Deputy Attorney General
Technical Staff: Yao Yin
i:umisc:commentVpace2l. l4esyy comments
5STAFF COMMENTS ruLY 29,2021
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 29th DAY OF ruLY 2021,
SERVED THE FOREGOING COMMENTS OF TIIE COMMISSION STAFF, IN
CASE NO. PAC.E-21.14, BY E.MAILING A COPY TTIEREOF, TO THE
FOLLOWING:
TED WESTON
ROCKY MOUNTAIN POWER
I4O7 WEST NORTH TEMPLE STE 330
SALT LAKE CITY UT 84116
E-MAIL : ted.weston@pacifi corp. com
idahodockets@pacifi com.com
DATA REQUEST RESPONSE CENTER
E.MAIL OIILY:
datarequest@paci fi com.com
EMILY WEGENER
ROCKY MOUNTAIN POWER
1407 WN TEMPLE STE 320
SALT LAKE CITY UT 84I 16
E-MAIL: emily.wegener@,pacificom.com
CERTIFICATE OF SERVICE