20220909Final_Order_No_35529.pdf

ORDER NO. 35529 1

Office of the Secretary
Service Date
September 9, 2022
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On April 13, 2022, PacifiCorp dba Rocky Mountain Power (“Company”) applied to
the Commission for an order approving or rejecting a Power Purchase Agreement (“PPA”)
between the Company and Georgetown Irrigation Company (“Seller”) (collectively the “Parties”)
for energy generated by a 480-kilowatt (“kW”) hydroelectric facility (“Facility”)—a qualifying
facility (“QF”) under the applicable provisions of the Public Utilities Regulatory Policies Act of
1978 (“PURPA”).1 The Company requested that its Application be processed by Modified
Procedure.
On May 12, 2022, the Commission issued a Notice of Application and Notice of
Modified Procedure, establishing a June 1, 2022 public comment deadline and a June 8, 2022
Company reply deadline. Order No. 35401. Staff filed comments to which no reply was made by
the Company or Seller. No other comments were received during the timeline set by the
Commission. Pursuant to the schedule set by Order No. 35401, the record closed on June 8, 2022.
On July 21, 2022, the Seller filed a Petition to Intervene and to allow its late comments.
On July 25, 2022, the Seller filed a Corrected Petition to Intervene (“Petition”).
Having reviewed the record, the Commission now issues this final Order approving the
PPA as discussed more fully below.
BACKGROUND
The Seller delivered energy from the Facility to the Company in accordance with a one-
year extension to a power purchase agreement dated July 2, 1984. The one-year extension was
approved by the Commission on August 2, 2021, and allowed the Seller to continue to deliver

1 The Parties’ 1984 agreement was for a Facility with a 330 kW nameplate capacity despite that the installed generator
had a 480 kW nameplate capacity rating, which has not been removed or modified since its installation. In Case. No.
PAC-E-21-11, which extended the Parties’ 1984 agreement for one-year to allow the Seller to complete
interconnection requirements, also used 330 kW as the nameplate rating of the Facility.
IN THE MATTER OF ROCKY MOUNTAIN
POWER’S APPLICATION FOR APPROVAL
OR REJECTION OF THE POWER
PURCHASE AGREEMENT BETWEEN
PACIFICORP AND GEORGETOWN
IRRIGATION
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CASE NO. PAC-E-22-06

ORDER NO. 35529
ORDER NO. 35529 2

energy to the Company through March 31, 2022. Order No. 35123. The reason for the one-year
extension was to allow the Seller to secure “a new stand-alone transmission interconnection
agreement acknowledging the completion of the distribution system upgrades replacing the
interconnection provisions in the [1984 power purchase agreement].” Application at 4.
THE APPLICATION
The Seller secured a new stand-alone transmission interconnection agreement on
September 1, 2021, and provided the necessary information and proof of insurance to support the
execution of the renewal PPA by March 24, 2022.
On March 28, 2022, the Company and Seller entered into the 20-year renewal PPA that
will remain in effect until March 31, 2042.
The Seller has demonstrated that: (1) the Facility’s net energy will equal the energy
delivery schedules for the term of the PPA; and (2) the Facility is unlikely to generate more than
0.48 average-megawatts in any calendar month. Id. at 4-5. It is estimated the Facility will generate
1,856 megawatt-hours during the first year of the PPA renewal. Id. at 5.
The Company requests approval of a bifurcated rate structure that would last until the
Company’s next capacity deficit date in 2029. The proposed rate structure would compensate the
Seller for energy and capacity up to 330 kW of output delivered and energy only for any output
delivered exceeding 330 kW until 2029. Starting in 2029, the Seller would receive both energy
and capacity payments for all output delivered.
The Company requests the Commission declare that the avoided cost prices set forth in
the PPA are just and reasonable, in the public interest, and that the Company’s incurrence of such
costs are legitimate expenses for recovery in rates in the state of Idaho. Id.
STAFF COMMENTS
Staff filed comments recommending Commission approval contingent on the following
changes:
1. Use of one set of avoided cost rates, which include capacity payments starting in
2029;
2. Update the provisions associated with the 90/110 Rule to reflect the use of one set
of rates;
3. Apply energy payments to the energy generated during the Lapse Period;
4. Update the definition of Contract Year;
ORDER NO. 35529 3

5. Improve Section 6.8 to reflect other potential modifications to the Facility, besides
project expansions or additions;
6. Improve Section 11.1.2 (g) to reflect other potential modifications to the Facility,
besides project expansions or additions; and
7. Update Section 21 of the PPA to ensure that any modification does not become
valid without Commission authorization.
Staff Comments at 7.
Capacity Payments
Staff recommended that capacity payments be denied until 2029—the Company’s next
capacity deficit date—along with corresponding changes to the 90/110 Rule and energy payment
PPA provisions to reflect one set of rates, because the Seller did not continuously generate energy
between April 1, 2022, and May 12, 2022. Staff also recommended the Commission only approve
payments for energy during the Lapse Period.
Staff noted that immediate capacity payments for renewal PPAs are conditioned on the
Seller continuously operating the Facility that is being renewed and the Seller being paid for
capacity at the end of that term. In this case, Staff noted that the Seller was not being paid for
capacity during the one-year renewal. See Order No. 35123. Staff suggested that the generation
interruptions would preclude the Company from immediate capacity payments because “the
energy could not be relied upon by the Company.” Staff Comments at 4. Staff believed the project
should be treated as a new PPA and only eligible for energy payments for any output delivered
until 2029 at which point the Facility’s entire output would be eligible for both energy and capacity
payments. Staff recommended that the 90/110 Rule be applied to a single set of avoided cost rates
to reflect its position that the Facility was not eligible for any immediate capacity payments.
However, Staff also recommended that “if the Commission determines that the Facility is eligible
for immediate capacity payments, Staff recommends the bifurcated rates as originally proposed”
and that the 90/110 Rule be applied as proposed too. Id.
Staff also recommended changing the definition of “Contract Year” in the PPA to
reflect the “Initial Delivery Date,” and substitute “April 1, 2022” with “Initial Delivery Date.”
Staff recommended that the avoided cost rates be modified to one set of rates, which includes
capacity payments starting in 2029 due to the interruption to Facility operation.

ORDER NO. 35529 4

Potential Project Modification—Section 6.8, Section 11.1.2(g), and Section 21
Staff also made several recommendations to the PPA’s future modification provisions.
Staff recommended that Section 6.8 address other potential modifications to the Facility besides
project expansions or additions, including changes to the QF category, primary energy sources, or
generator fuel. Staff proposed two options to address this—the first option would require an “as-
built” description and a provision that any modifications altering the project from the “as-built”
description will trigger an amendment to the contract and require Commission approval; and, the
second option would list all scenarios that necessitate a PPA amendment and require Commission
approval. Staff recommended that Section 11.1.2(g) be modified consistent with the option chosen
for Section 6.8.
Staff also recommended that Section 21 be modified to require Commission approval
of any modification to the PPA, specifically with the following language: “No modification of this
Agreement is effective unless it is in writing and executed by both Parties and subsequently
approved by the Commission.”
GEORGETOWN IRRIGATION’S PETITION AND COMMENTS
On July 21, 2022, Seller petitioned to intervene in this case to address Staff’s comments
on capacity payments. Seller argued that Staff’s recommendation was based on incomplete
information about the reasons for the lapse and that eliminating capacity payments “would have a
direct, substantial, and adverse financial impact.” Seller Petition at 2. The Seller contended that
the Company instructed it to discontinue delivering energy, as is their prerogative under the PPA
terms. Id. at 5. Seller represented that it would have continued delivering energy had the Company
not instructed it to stop. Seller argued that denying capacity payments for a lapse that was not its
choice is harsh and unwarranted, and that it relies on capacity payments for servicing debt and
planning future upgrades at the Facility.
Further, Seller contended that Order No. 35401 only provided the Company with a
reply period, and it did not reasonably believe it had the opportunity to reply. After being notified
that the Company would not, and did not, file reply comments to counter Staff’s position, Seller
was unsure on how to offer counterpoints to Staff on the record, because it did not believe it was
not a party to the proceeding under Rule 31, IDAPA 31.01.01.31 or an “Interested Person” under
Rule 59, IDAPA 31.01.01.59. Finally, Seller argued that allowing its comments “will eliminate
serious due process of law problems and will not prejudice the parties, burden the Commission or
ORDER NO. 35529 5

delay issuance of the final order.” Id. The Seller also explained that Covid-19 and the lack of its
board’s technological sophistication contributed to the delays of its Transmission Interconnection
Agreement. The Seller deferred to the Company and Staff on the remaining recommendations.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter under Idaho Code §§ 61-501, -502,
and -503. Idaho Code § 61-501 authorizes the Commission to “supervise and regulate every public
utility in the state and to do all things necessary to carry out the spirit and intent of the [Public
Utilities Law].” The Commission is empowered to investigate rates, charges, rules, regulations,
practices, and contracts of public utilities and to determine whether they are just, reasonable,
preferential, discriminatory, or in violation of any provision of law, and to fix the same by order.
Idaho Code §§ 61-502 and -503. In addition, the Commission has authority under PURPA and
Federal Energy Regulatory Commission (“FERC”) regulations to set avoided costs, to order
electric utilities to enter fixed-term obligations for the purchase of energy and capacity from QFs,
and to implement FERC rules. The Commission may enter any final order consistent with its
authority under Title 61 and PURPA.
Having reviewed the record, we now deny the Seller’s petition for intervention, accept
the Seller’s late comments for consideration, and approve the Company’s Application with
immediate capacity payments available for output delivered by the Seller as proposed in the
Application.
Seller’s Petition to Intervene
According to the Commission’s Rules of Procedure, a petition for intervention will be
granted if it “shows direct and substantial interest in any part of the subject matter of a proceeding
and does not unduly broaden the issues.” IDAPA 31.01.01.074. Late petitions must state a
substantial reason for the delay in filing. Id. The threshold for intervention traditionally has been
liberally construed by the Commission to allow a fair opportunity to all interested parties to
participate in a proceeding. Order No. 27019. However, the Commission has previously addressed
the status of an ESA’s2 counter-party (e.g. a Seller in an ESA or PPA) in Order No. 34909, and
determined that the ESA counter-party is a party to the case. Most recently this Commission
opined:

2 ESA and PPA are both used by regulated utilities in Idaho to describe PURPA agreements entered into between
utilities and a seller.
ORDER NO. 35529 6

If a utility applies for consideration of an ESA, the Commission routinely treats the
ESA’s counter-party as a party to the case because, by signing the ESA, that party
has at least impliedly asked the Commission to approve the ESA. See e.g., ESA p.
31, § 21.1 (noting the ESA will not take effect until approved by the Commission).
See also Rules 31 and 32 of the Commission’s Rules of Procedure, IDAPA
31.01.01.031 and .032 (listing “parties” to proceedings, including “applicants,”
which are persons “who see any right, license, award or authority” from the
Commission).
Order No. 34909 at 3.

In Order No. 34909, the Commission denied the seller’s request for intervenor status, but granted
its petition for reconsideration, and agreed to consider the arguments raised in the seller’s petition.
Following this reasoning, we find that a Seller is a party to the case as the PPA’s
counter-party. The Seller was entitled to present its arguments before the Commission under the
Commission’s Rules of Procedure as a party who would realize a “any right, license, award or
authority” with approval or rejection of the PPA, but relied on the Company to navigate the
application process. IDAPA 31.01.01.032. Indeed, it has been a common practice for PPA counter-
parties to rely on the PPA petitioner (utility) to handle the Commission proceedings, but this
practice should not be construed to preclude a seller from advocating for its best interest.
Late Comments
The Seller contends that Order No. 35401 did not provide it a reply period—only the
Company—and that fairness and due process require the Commission to consider its arguments
on the record. We reject this position as discussed above. Here, however, the Seller has
supplemented the record with its late comments by clarifying the reason for the lapse from its
perspective. The Commission is permitted latitude to deviate from its Rules of Procedure when it
determines such deviation necessary, unless prohibited by statute. IDAPA 31.01.01.013. We find
it would be unfair to ignore the Seller’s uncontested information discussing why the lapse occurred
because of the dramatic impact it would have on the capacity payments to Seller. Staff did not
have Seller’s perspective on the lapse when making its recommendations, and the Seller’s
description of the events ultimately aides our decision and supports a more just outcome. We
understand that often the utility and seller are aligned when a PPA or ESA is submitted for approval
or rejection; however, we note the general practice of relying on the utility to manage proceedings
is less effective when the parties’ interests diverge during the proceedings or the utility is
indifferent to an alternative position presented by Staff. Seller’s confusion on how to proceed was
ORDER NO. 35529 7

understandable in this case. Therefore, although we deny Seller’s Petition to Intervene, the
Commission will take the Seller’s comments under advisement as they effectively complete a
portion of the record that was missing context.
The PPA
Staff’s comments and resulting recommendations were based on an incomplete
understanding of the reasons for the brief Lapse Period that began on the date of the renewal PPA.
The Seller contends that Staff’s comments incorrectly portrayed the lapse as being its prerogative
or related to the delayed transmission interconnection agreement. The Seller explained that this
interruption was at the Company’s insistence, and for reasons other than its inability or refusal to
continuously deliver energy to the Company. The Seller correctly argues that denying capacity
payments for a lapse that was not its choice is harsh and unwarranted under the facts of this case.
We agree with the Seller that denying its immediate capacity payments under the circumstances
would have a direct, substantial, and adverse financial impact on Seller.
This matter presents a unique situation the Commission has not directly addressed
before—how to treat capacity payments in a contract renewal when there was a lapse due to
reasons independent of the Seller, and where the Seller was willing and able to deliver the energy
during the temporary short term lapse. While we appreciate Staff’s careful examination of the
terms of the renewal contract, we cannot ignore the facts—unavailable to Staff at the time of its
recommendation—that the Seller was willing and able to deliver energy during the short Lapse
Period. It would be unjust, and potentially introduce utility gamesmanship into contractual
dealings, to financially penalize the Seller in this case. We therefore find that capacity payments
should continue under the narrow circumstances at issue here.
The bifurcated rate structure follows past Commission decisions where the nameplate
capacity installed and the nameplate capacity included in an original agreement differ. The
Commission therefore finds it appropriate for the Company to pay the Seller capacity based on the
bifurcated rate structure as proposed in Exhibit K of the PPA for the term of the PPA and the Lapse
Period. Additionally, the Commission finds it appropriate for the Parties to apply the 90/110 Rule
to the bifurcated rate structure that will be operative until the Company’s next capacity deficit date
in 2029.

ORDER NO. 35529 8

Modifications
We understand that the Company and the Seller did not lodge any disagreements with
Staff’s recommendations to address Facility modifications or PPA amendments in principle but
would like to address those recommendations in this Order. The Commission finds that Section
6.8 should be updated to reflect potential modifications to the Facility as discussed in Staff’s
comments and Section 11.1.2(g) should be modified to reflect the updates to Section 6.8.
Additionally, Section 21 should be modified so that Commission approval of any modification to
the PPA is required.
The Commission also finds that changing the definition of “Contract Year” in the PPA
to reflect the “Initial Delivery Date,” and substituting “April 1, 2022” with “Initial Delivery Date”
is appropriate.
We direct the Parties to update their PPA as discussed above and file the updated PPA
with the Commission within 15 days of the service date upon this Order. We find the Company’s
payments for purchases of energy and capacity under the PPA to be prudently incurred expenses
for ratemaking purposes.
O R D E R
IT IS HEREBY ORDERED that the Seller’s Petition to Intervene is denied.
IT IS FURTHER ORDERED that the Commission accepts the Seller’s late filed
comments.
IT IS FURTHER ORDERED that the Parties’ PPA is approved, provided the Parties
update the PPA as described above in the “Modifications” Section of this Order. The Parties are
directed to provide the Commission with an updated PPA as a compliance filing within 15 days of
this Order being issued.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order regarding any matter
decided in this Order. Within seven (7) days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration. Idaho Code § 61-626.
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ORDER NO. 35529 9

DONE by order of the Idaho Public Utilities Commission at Boise, Idaho this 9th day
of September 2022.

ERIC ANDERSON, PRESIDENT

JOHN CHATBURN, COMMISSIONER

JOHN R. HAMMOND, JR., COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\PAC-E-22-06\orders\PACE2206_final_dh.docx