20220803Reply Comments.pdf

Y ROCKY MOUNTAIN
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;._..i:rtii:il'1 -. j!-rrj [-J 1407 W. North Temple, Suite 330
Salt Lake City, Utah &4116
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August 3,2022
VA ELECTRONIC DELIVERY
Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
I l3l W. Chinden Blvd
Building 8 Suite 20lA
Boise,ID 83714
Re:CASE NO. PAC-8.22.08
IN TIIE MATTER OF TITE APPLICATION FOR APPROVAL OR REJECTION
OF THE POWER PI]RCHASE AGREEMENT BETWEEN PACIFICORP AND
AMY FAMILY HOLDINGS, LLC.
Dear Ms. Noriyuki:
Please find for filing Rocky Mountain Power's Reply Comments in the above-referenced matter.
lnformal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at
[phone].
Very truly yours,
R. Steward
Senior Vice-President of Regulation and Customer Solutions
Enclosures
Emily L. Wegener (ISB# 11614)
Rocky Mountain Power
1407 W. North Temple, Suite 320
Salt Lake city, uT 841l6
Telephone No.: (80 I ) 220-4526
Email : emily.wegener@f'acifi corp.com
Attorneyfor RoclE Mountain Power
BEFORE THE IDAHO PUBLIC UTILITTES COMI\ISSION
IN TIIE MATTER OF THE APPLICATION
FOR APPROVAL OR REJECTION OF
THE POWER PURCIIASE AGREEMENT
BETWEEN PACIFICORP AIID AMY
FAMILY HOLDINGS, LLC
CASE NO. PAC-E.22.08
ROCKY MOUNTAIN POWER'S REPLY COMMENTS
In accordance with the Idaho Public Utilities Commission ("Commission") Notice of
Amended Comment Deadline, PacifiCorp d/b/a Rocky Mountain Power (the "Compffiy"), by and
through its counsel, provides these Reply Comments to the comments received by the Commission
from the Staffof the Commission ("Staff') on July 29,2022.
INTRODUCTION
The Company filed its application in this matter with the Commission on May 18,2022
("Application"), requesting the Commission approve or reject the power purchase agreement
between the Company and Amy Family Holdings, LLC ("Agreement"). Staff first recommends
several date modifications because, since the Application was filed, the Commission approved an
amendment to the previous contract, which governs the relationship between the parties through
December 31,2022.t The Company agrees and accordingly accepts Staffrecommendations l-4.
I ln the Malter of the Applicationfor Approval or Rejection of the Amended Power Purchase Agreement between
PocifiCorp and Amy Family Holdings, LLC, Case No. PAC-E-20-18, Commission Order 35262 (December 20,
2021); Order No.35469 (July 21,2022).
I
Staff also recommends changes to Section 2l of the Agreement and the addition of more detailed
provisions to address any future modifications to the generation facility. The Company
recommends a different modification to Section 2l and believes potential future modifications are
sufficiently addressed under the current contract language.
REPLY TO STAFF'S COMMENTS
Staff recommends that the last sentence of Section 2l of the Agreement be modified to
state "No modification of the Agreement is effective unless it is in writing and executed by both
Parties and subsequentl), approved by the Commission." The Company agrees that Commission
approval is appropriate for any material modification of the Agreement. However, the Company
believes that Stafls proposed language may require the Company to file for approval for any
changes to the Agreement, however slight, for instance modifications to the notice provisions or
routine reporting requirements. To address Staffs concerns, the Company proposes adding a
sentence to the end of Section 2l that states "Material changes to the Agreement shall not go into
effect until after approval by the Commission."
Staff also expresses concern that an unapproved increase in facility capacity and output
"would result in overpayments to the QF by allowing it to receive compensation for potential
increases in output due to facility upgrades prior to the Company's need for additional capacity."
To mitigate that concern, Staff recommends that the Commission require the Company to include
provisions that require the seller to notify the Company of any modifications to the facility and
requires the Company to price any modifications separately from the original agreement and
submit the contract for approval by the Commission. The proposed provisions would require a
contract amendment even if the existing contract terms are fair or benefit customers.
2
The Company agrees with Staff that modifications to an approved facility, particularly
those that change the output of the facility, could be problematic. As a result of these concerns,
enumerated seller defaults include: "Any modification of the Facility that (i) results in the Facility
increasing its Nameplate Capacity Rating beyond that stated in Exhibit B, or (ii) is reasonably
likely to result in the Expected Net Output to increase." Agreement I l.l .2(g). If Amy Holdings,
LLC were to violate this provision and the violation had the potential to result in overpayment, the
Company would provide fifteen days' notice of its intent to terminate the contract if the default is
not cured. See Agreement I 1.3. The Company would then be able to negotiate with Amy Holdings
for the treatment of the additional capacity based on the appropriate avoided cost rates at the time
of the modification. This is the same result Staffseeks to achieve with its proposed provisions, and
the proposed provisions are therefore unnecessary.
CONCLUSION
The Commission should issue an order conditionally approving the Agreement subject to
the date changes as noted in Staffcomments and the addition of a sentence to Section 2l stating:
"Material changes to the Agreement shall not go into effect until after approval by the
Commission."
Respectfully submiued this 3'd day of August,2022.
Emily W
Attorneyfor Roclry Mountain Power
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