20220819Final_Order_No_35506.pdf

ORDER NO. 35506 1

Office of the Secretary
Service Date
August 19, 2022
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF ROCKY MOUNTAIN
POWER’S APPLICATION FOR APPROVAL
OR REJECTION OF THE POWER
PURCHASE AGREEMENT WITH AMY
FAMILY HOLDINGS, LLC.
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CASE NO. PAC-E-22-08

ORDER NO. 35506

On May 18, 2022, PacifiCorp d/b/a Rocky Mountain Power (“Company”) applied to the
Idaho Public Utilities Commission (“Commission”) for an order approving or rejecting a Power
Purchase Agreement (“PPA”) between the Company and Amy Family Holdings, LLC. (“Seller”)
(collectively, the “Parties”) for energy generated by the Bell Mountain Hydro Project
(“Facility”)—a qualifying facility (“QF”)—and a declaration that the avoided cost prices are just
and reasonable. The Company requested that its Application be processed by Modified Procedure.
On June 16, 2022, the Commission issued a Notice of Application and Notice of Modified
Procedure setting public comment and Company reply deadlines.
At the Commission’s July 12, 2022 Decision Meeting, Commission Staff (“Staff”)
recommended vacating the public comment and reply comment deadlines, and establishing a new
14-day public comment and 21-day Company reply comment deadline, to allow the Company to
submit the amended agreement required under Case No. PAC-E-20-18. On July 15, 2022, the
Commission vacated the comment deadlines and issued amended comment deadlines. The
Commission also approved the amended agreement required under Case No. PAC-E-20-18.
On July 29, 2022, Staff filed comments recommending several changes to the Parties’
Amended PPA. On August 3, 2022, the Company filed reply comments. The Company agreed
with Staff’s recommended changes but proposed different language intended to reach the same
result. Company’s Reply at 3.
No public comments were submitted.
The Commission now issues this Order approving the PPA.
THE APPLICATION
The parties’ original agreement was signed on January 3, 1985. Before its expiration, the
Commission granted a one-year extension of the 1985 agreement to allow the Seller to complete
interconnection requirements prior to the contract expiration date of December 31, 2021. Order
ORDER NO. 35506 2

No. 35262. The Company represents that the Seller has completed the necessary upgrades, and
that the 650-kilowatt nameplate capacity facility remains a QF that will generate no more than
0.65 average megawatt (“aMW”) in any calendar month, with an estimated yearly output of net
1,718 megawatt-hours. Application at 3.
Under the proposed PPA, the Seller would sell net delivered output to the Company at the
rates described in Exhibit K “Schedule 38 and Pricing Summary Table” and as described in Section
5.1 “Contract Price; Costs.” PPA at 19-20; Exhibit K. The PPA provides that it is conditioned upon
Commission approval and a determination that the prices paid for power delivered are just and
reasonable, in the public interest, and that the costs are legitimate expenses. PPA at 10, § 2.1.
STAFF COMMENTS
Staff reviewed the Company’s Application and Exhibits A-L and recommended approval,
if the following amendments were made to the Amended PPA: (1) replace “January 1, 2022”- with
“January 1, 2023” in Exhibit K; (2) replace “January 1, 2022” with “January 1, 2023” in the
definition of Contract Year on Page 2 of the PPA; (3) replace “January 1, 2022” with “January 1,
2023” in the definition of Scheduled Initial Delivery Date on Page 8 of the PPA; (4) replace “July
1, 2022” with “July 1, 2023” in Section 11.2.4 (Remedy for Seller’s Failure to Achieve Timely
Initial Delivery Date) on Page 30 of the PPA; (5) update Section 21 of the PPA to ensure that any
modification does not become valid without Commission authorization; and, (6) include detailed
provisions to adequately address potential modifications to the Facility.
With respect to Staff recommendation No. 5, Staff proposed replacing “[n]o modification
of this Agreement is effective unless it is in writing and executed by both Parties” in Section 21 of
the PPA with “No modification of this Agreement is effective unless it is in writing and executed
by both Parties and subsequently approved by the Commission.” Staff Comments at 4.
With respect to Staff recommendation No. 6, Staff noted that the Parties included language
that “[n]o modification of this Agreement is effective unless it is in writing and executed by both
Parties,” but thought that the Parties could consider including modification provisions addressing
nameplate capacity changes, generation output changes, QF categories (Small Power Production
Facilities vs. Cogeneration Facilities), changes to the primary energy sources (non-seasonal hydro,
seasonal-hydro, wind, solar, and others), and changes to the generator fuel (which could lead to
the options of Fueled rates versus Non-Fueled Rates). Staff Comments at 4-5. Staff noted that there
are generally two types of modifications—the first being modifications from the planned facility
ORDER NO. 35506 3

to the completed facility project, and the second being modifications that occur subsequent to the
as-built facility. For the first category of modifications, the Commission requires QFs to submit
“as built” descriptions of their facilities by the first operation date, and contracts are expected to
reflect an accurate facility description. For the second category, Staff acknowledged that the parties
could include all major modifications from the “as-built” description that would trigger the need
for submitting an amended contract for Commission approval. the parties can include an “as built”
description in a contract with a provision that major modifications from the “as built” description
will trigger the need for contract amendment and Commission approval. Because the PPA already
includes an as-built description, Staff recommended adding provisions that (1) require the Seller
to promptly notify the Company of modifications to the as-built description; (2) require the Seller
to describe any planned modifications, i.e., fuel change or capacity size; (3); language that
Commission-approved rates might not apply to the modified facility, and that any amendment
would need Commission approval; (4) language that the Company is not required to purchase the
output of the modified facility, even if the modified facility qualifies as a single “QF” under FERC
regulations, and that the Parties may enter into a new agreement to address energy from the
additional facility; (5) language that deviations from the proposed modifications would require
contract amendment and Commission approval; and (6) a provision that the Seller is in default for
failing to adhere to any of the above provisions. Staff Comments at 5-6.
COMPANY COMMENTS
On August 3, 2022, the Company filed its reply comments. The Company agreed to make
the suggested changes from Staff’s recommendations 1-4. Reply at 1. To address Staff’s concerns
about modifications (Staff recommendation 5), the Company proposed additional language in
Section 21 of the PPA to state that: “Material changes to the Agreement shall not go into effect
until after approval by the Commission.” Id. at 3.
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, the
Company feels that it has addressed these issues in the enumerated seller defaults. Because the
Seller’s default would trigger Company notification, the Company would then be able to negotiate
with the Seller on how to address a hypothetical increase in capacity. The Company believes that
its’ changes would effectuate the same result as Staff’s proposed language.

ORDER NO. 35506 4

COMMISSION DISCUSSION AND FINDINGS
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 the Public Utility
Regulatory Policies Act of 1978 (“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 qualifying facilities, and to implement FERC rules.
The Commission may enter any final order consistent with its authority under Title 61 and PURPA.
The Commission has reviewed the record, including the Company’s Application, Staff’s
comments, and the Company’s reply comments. With respect to Section 21 of the PPA, we remain
persuaded that the statement should be updated consistent with Staff’s recommendations to reflect
the significance of Commission approval. The Company could accomplish this by replacing “[n]o
modification of this Agreement is effective unless it is in writing and executed by both Parties” in
Section 21 of the PPA with “No modification of this Agreement is effective unless it is in writing
and executed by both Parties and subsequently approved by the Commission.”
We understand that the Company agrees with Staff’s recommendations in principle but
would like to address the concerns with a general statement about material changes and rely on the
PPA’s default provisions. For consistency and clarity, the Commission is persuaded that the PPA
should include the following from Staff’s recommendation No. 6:
1. Language that restricts the Seller from modifying the Facility from the as-
built description of the Facility included in Exhibit B, without promptly notifying
the Company of that intent.

2. Language that requires the Seller to provide notification of planned
modifications (such as fuel change or capacity size change) to the as-built
description.

3. Language that the Parties will need to amend the contract again to reflect
the actual modification and seek approval from the Commission if the actual
modification deviates from the proposed modification.

ORDER NO. 35506 5

With the aforementioned changes incorporated in an amended PPA to be submitted to the
Commission, and recognizing the substantial incorporation of Staff’s recommendations, we find
it to be fair, just, and reasonable to approve the Company’s PPA.
ORDER
IT IS HEREBY ORDERED that the Parties’ PPA is approved, provided the Parties update
the PPA as described above. The Parties are directed to provide the Commission with an updated
PPA as a compliance filing within fifteen (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.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 19th day of
August 2022.

__________________________________________
ERIC ANDERSON, PRESIDENT

JOHN CHATBURN, COMMISSIONER

JOHN R. HAMMOND JR., COMMISSIONER
ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\PAC-E-22-08 PPA Amy\orders\PACE2208_final_cs.docx