20051107Workshop Status Report.pdf

IDAHO POWER COMPANY
O, BOX 70
BOISE, IDAHO 83707
BARTON L. KLINE
Senior Attorney
An IDACORP Company
November 7 , 2005
:-.;j) ;:.:-,
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P. O. Box 83720
Boise, Idaho 83720-0074
Re:Case No. IPC-05-
Workshop Status Report
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Dear Ms. Jewell:
Please find enclosed for filing an original and seven (7) copies of the
Status Report regarding the above-entitled case.
I would appreciate it if you would return a stamped copy of this transmittal
letter for our files in the enclosed self-addressed stamped envelope.
(?J~
Barton L. Kline
BLK:jb
Enclosures
Telephone [phone] Fax [phone], E-mail BKlinerBJidahopower.com
BARTON L. KLINE, ISB # 1526
MONICA B. MOEN , ISB # 5734
Idaho Power Company
1221 West Idaho Street
O. Box 70
Boise, Idaho 83707
Telephone: [phone]FAX: [phone]
E-mail: BKline(g) idahopower.com
MMoen
(g)
idahopower.com
Attorneys for Idaho Power Company
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF
IDAHO POWER COMPANY FOR AN
ORDER TEMPORARILY SUSPENDING
IDAHO POWER'S PURPA OBLIGATION
TO ENTER INTO CONTRACTS TO
PURCHASE ENERGY GENERATED BY
WIND-POWERED SMALL POWER
PRODUCTION FACILITIES.
CASE NO. IPC-05-
PHASE II WORKSHOP STATUS
REPORT
BACKGROUND
On August 4, 2005 , the Idaho Public Utilities Commission ("Commission
entered interlocutory Order No. 29839 in which the Commission made initial
determinations on several issues relating to entitlement to published avoided cost rates
for wind-powered small power production facilities. In Order No. 29839 , the
Commission deferred a final determination on other issues raised in the case pending
the completion of a workshop process in which the parties would address needed
PHASE II WORKSHOP STATUS REPORT, Page
studies , identify issues and discovery parameters. The Commission s Order provided in
relevant part:
Idaho Power, in conjunction with the two utilities and in
consultation with other parties to this case , is directed to file a
proposed schedule for initial workshop to identify issues, required
studies , and discovery parameters , to be filed as a proposal for
further procedure and related time line. An initial report
proposing same shall be filed with the Commission within thirty
days. Subsequent status reports should be filed every sixty days
thereafter. (Order No. 29839 at p. 10.
PROCESS
Three workshops have been held to date. The initial workshop was held
on August 29,2005, and included representatives from the three electric utilities, the
Commission Staff and various other parties interested in the development of wind-
generating resources. The meeting agenda and list of participants is attached. At the
August 29 workshop, the participants exchanged proposed lists of issues to be
considered in future workshops. The issues lists were briefly discussed for purposes of
clarification with the understanding that the next workshop would provide a further
opportunity for a full discussion of the issues presented. Participants also agreed that
Idaho Power should pursue the retention of Susan Hayman , North County Resources
Inc., to provide facilitation of future workshops.
By letter dated September 6 , 2005 , in compliance with Commission Order
No. 29839 , Idaho Power advised the Commission of the August 29,2005 workshop and
the status of the proceedings.
Since August 29 2005, the parties have participated in two additional
workshops , the first on September 20, 2005 , and the second on October 10, 2005.
PHASE II WORKSHOP STATUS REPORT, Page 2
Workshops have included presentations by participants, a presentation by the
consultant Idaho Power has retained to perform the wind integration analysis discussed
in Order No. 29839, group discussions and assessment of areas of agreement and
disagreement. Susan Hayman, with North County Resources, Inc., a Boise-based
facilitation/medication firm, prepares agendas and facilities workshops. The designated
workshop coordinators representing the major interests at the table (the three utilities
Commission Staff , wind resource developers and the Northwest Energy Coalition and
other wind advocates) cooperate in designing workshops. Copies of all workshop
summaries are provided as attachments to this Status Report.
PARTICIPANTS
The following people have attended one or more workshops, receive
meeting materials and summaries, and are considered active workshop participants:
Name and Affiliation
Mark Ahlstrom, WindLogics
Randy Allphin, Idaho Power
Jeb Allred, Idaho Power
Bill Batt, Batt & Fisher
Dave Bergh, Elmore County Agribusiness
Karl Bokenkamp, Idaho Power
Dean Brockbank, PacifiCorp
James Carkulis , Exergy
Don Doskeland , Windland
Armand Eckert, Magic Wind
Bill Eddie, Advocates for the West
Gerald Fleischman, IDWR-Energy Division
Troy Gagliano, Renewable Northwest Project
Name and Affiliation
LeRoy Jarolimek, Wind Advantage
Clint Kalich, Avista
Bart Kline, Idaho Power
Bob Lafferty, Avista
Bob Lively, PacifiCorp
Randy Lobb, IPUC
David Meyer, Avista
Jim Miller, Idaho Power
Joe Miller, McDevitt & Miller
Ken Miller, NW Energy Coalition
Monica Moen , Idaho Power
Tom Noll, Idaho Power
Lisa Nordstrom, PacifiCorp
The section of the Summary of Workshop #3 entitled "Integration Study" has been the subject of
some disagreement related to the description of the design of the study. Idaho Power expects those
disagreements will be addressed further in a subsequent workshop.
PHASE II WORKSHOP STATUS REPORT, Page 3
Ric Gale , Idaho Power
James Gall , Avista
Mary Godwin , Advocates for the West
Bruce Griswold, PacifiCorp
Jared Grover, Cassia Wind
John Hanson
John Hammond, Jr., Batt & Fisher
Mike Heckler, Windland
J. Humphries, B.RE., Inc.
Glenn Ikemoto, Energy Vision
Brian Jackson , Renaissance Engineering &
Design
Rich Rayhill, Ridgeline Energy
Peter Richardson , Exergy
Gary Seifert, Idaho National Laboratory
John Steiner, Idaho Wind
Rick Sterling, IPUC
Richard Storro, Avista
Blair Strong, Paine Hamblen
John Wirt
Scott Woodbury, IPUC
Mike Youngblood, Idaho Power
PROGRESS
Since the inception of the workshops on August 29,2005 , participants
have achieved the following:
Established and accepted a set of operational principles that guide
the workshops.
Met with the consultant Idaho Power has retained to conduct the
wind integration analysis contemplated by Order No. 29839. At this meeting
participants discussed the parameters of the analysis and offered suggestions as to the
design and objectives of the study.
Identified the issues to be addressed in the workshops.
Agreed to explore potential settlement options.
TIMELINE
Participants are scheduled to meet again on November 18, 2005, to
among other things , further refine potential avenues of settlement. This Status Report
to the Commission has been reviewed by the parties to this proceeding and is being
submitted without objection.
PHASE II WORKSHOP STATUS REPORT, Page 4
DATED at Boise, Idaho , this 7th day of November, 2005.
BARTON L. KLINE
PHASE II WORKSHOP STATUS REPORT, Page 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 7th day of November, 2005, I served a
true and correct copy of SECOND WORKSHOP STATUS REPORT upon the following
named parties by the method indicated below , and addressed to the following:
Scott Woodbury
Deputy Attorney General
Idaho Public Utilities Commission
472 W. Washington Street
O. Box 83720
Boise, ID 83720-0074
swoodbu (g) puc.state.id.
Hand Delivered
S. Mail
Overnight Mail
FAX [phone]
E-mail
Peter J. Richardson
Richardson & O'Leary PLLC
515 N. 27th Street
O. Box 7218
Boise, ID 83707
peter(g) richardsonandolearv.com
Hand Delivered
~ U.S. Mail
Overnight Mail
FAX [phone]
E-mail
James T. Carkulis
Exergy Development Group of Idaho LLC
1424 Dodge Avenue
O. Box 5212
Helena, MT 59604
Hand Delivered
x U.S. Mail
Overnight Mail
FAX
Richard L. Storro
Director, Power Supply
A vista Corporation
1411 E. Mission Avenue
O. Box 3727, MSC-
Spokane , WA 99220-3727
dick.storro (g) avistacom.com
Hand Delivered
x U.S. Mail
Overnight Mail
FAX [phone]
E-mail
R. Blair Strong
Paine, Hamblen, Coffin , Brooke & Miller
717 West Sprague Avenue, Suite 1200
Spokane, WA 99201-3505
blair.stronq (g) painehamblen.com
Hand Delivered
x U.S. Mail
Overnight Mail
FAX [phone]
E-mail
CERTIFICATE OF SERVICE , Page
Dean J. Miller
McDevitt & Miller LLP
420 W. Bannock Street
O. Box 2564
Boise, ID 83701
joe (g) mcdevitt-miller.com
Hand Delivered
----2L- U.S. Mail
Overnight Mail
FAX [phone]
E-mail
Jared Grover
Cassia Wind LLC and
Cassia Gulch Wind Park LLC
3635 Kingswood Drive
Boise , ID 83704
Hand Delivered
x U.S. Mail
Overnight Mail
FAX
Armand Eckert
Magic Wind LLC
716-B East 4900 North
Buhl, ID 83316
Hand Delivered
x U.S. Mail
Overnight Mail
FAX
Glenn Ikemoto
Energy Vision LLC
672 Blair Avenue
Piedmont, CA 94611
qlenni
(g)
pacbell.net
Hand Delivered
x U.S. Mail
Overnight Mail
FAX [phone]
E-mail
Bob Lively
PacifiCorp
One Utah Center, 23rd Floor
201 S. Main Street
Salt Lake City, UT 84140
bob. lively (g) pacificorp.com
Hand Delivered
x U.S. Mail
Overnight Mail
FAX [phone]
E-mail
Lisa Nordstrom
PacifiCorp
825 N.E. Multnomah , Suite 1800
Portland , OR 97232
lisa.nordstrom (g) pacificom.com
Hand Delivered
x U.S. Mail
Overnight Mail
FAX [phone]
E-mail
William M. Eddie
Advocates For the West
1320 W. Franklin Street
O. Box 1612
Boise, ID 83701
billeddie(g) rmci.net
Hand Delivered
x U.S. Mail
Overnight Mail
FAX [phone]
E-mail
CERTIFICATE OF SERVICE, Page 2
Troy Gagliano
917 S.W. Oak Street, Suite 303
Portland, OR 97205
trov(g) rnp.orq
David Hawk, Director
Energy Natural Resources
R. Simplot Company
999 Main Street
O. Box 27
Boise, ID 83702
dhawk
(g)
simplot.com
R. Scott Pasley
Assistant General Counsel
R. Simplot Company
999 Main Street
O. Box 27
Boise, ID 83702
spaslev
(g)
simplot.com
William J. Batt
John R. Hammond , Jr.
Batt & Fisher, LLP
101 S. Capitol Blvd., Suite 500
O. Box 1308
Boise , ID 83701
wib
(g)
battfisher.com
jrh (g) battfisher.com
Michael Heckler
Director of Marketing & Development
Windland Incorporated
7669 W. Riverside Drive, Suite 102
Boise, ID 83714
mheckler (g) windland.com
CERTIFICATE OF SERVICE, Page 3
Hand Delivered
x U.S. Mail
Overnight Mail
FAX
Hand Delivered
x U.S. Mail
Overnight Mail
FAX [phone]
E-mail
Hand Delivered
--..1L. U.S. Mail
Overnight Mail
FAX [phone]
E-mail
Hand Delivered
x U.S. Mail
Overnight Mail
FAX [phone]
E-mail
Hand Delivered
x U.S. Mail
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FAX [phone]
E-mail
e;-
CASE NO. IPC-05-
SCHEDULING WORKSHOP
AUGUST 29, 2005 1 :30 PM
IDAHO POWER COMPANY AUDITORIUM
MEETING MINUTES
Introduction and Preliminary Matters Barton Kline, Senior Attorney for
Idaho Power Company, chaired the meeting and welcomed the meeting participants.
list of the participants is attached hereto as Attachment No.1. Mr. Kline distributed a
meeting sign-in sheet and established that Federal Energy Regulatory Commission
Standards of Conduct prohibit discussions at the meeting of transmission interconnection
matters.
Mr. Kline noted that this meeting is being conducted in accordance with the
direction given by the Idaho Public Utilities Commission (IPUC or the Commission) in
Order No. 29839 dated August 4, 2005, in which the parties to the above-referenced
matter are to identify issues, required studies, discovery parameters and proposals for
further procedure and related time lines with respect to the.above-referenced docket. Mr.
Kline reminded meeting participants that the issue of grand fathering Qualified Facilities
(QFs) for PURP A contracts with electrical utilities is beyond the scope of this group
meeting.
Mr. Kline requested that meeting participants consider whether future meetings
could benefit by the use of a professional meeting facilitator to ease the process
carrying out the IPUC's directives in Order No. 29839. Kline noted he would poll
participants at the end of the meeting regarding their preferences with respect to this
Issue.
Excban2e of Issues Lists: Mr. Kline expressed his belief that, in accordance
with the IPUC's Order, the parties have been directed to develop the list of issues in this
docket and to detennine, over the course of a series of workshops, which issues can be
resolved by the partie!'; and which issues must be forwarded to the Commission for
resolution. Idaho Power Company and Exergy distributed copies of their proposed issues
lists that are attached hereto as Attaclunent No.2 and Attaclunent No.3, respectively.
1. IPCo Issue No.1: What is Idaho Power s incremental cost for
ancillary services needed to integrate intermittent wind resources? Mr. Kline noted
that Idaho Power was moving forward with the selection of a third party consultant
assist the Company in determining the cost of integrating intermittent wind resources
onto its system. Joe Miller requested that this issue be amended to reflect that Idaho
Power may not incur any incremental costs and that the issue be amended acconlingly to
read
, "
Idaho Power s incremental cost if any
Il'L-I!:-U5-22 Scheduling workshop Meeting Minutes of August 29, 2005 - I
Mike Heckler of Wind land noted that there likely will not be a single cost of wind
integration; rather, any study should be expected to produce multiple levels of wind
integration costs with the cost of integration rising as the amount of wind generation
being integrated into the Idaho Power system rises. As a result, he suggested that IPCo
Issue No. I be amended accordingly. Mr. Heckler also questioned whether Idaho Power
needed to conduct a study since testimony offered by Troy Gagliano of Renewable
Northwest Project at the hearing in this matter showed that existing studies have already
established the costs of integrating wind resources at penetration levels of 10% or less
and that those studies could be used by Idaho Power to detennine the cost of integrating
up to 300 MW of wind power onto its system. He also suggested that in the future
should such an analysis be required, it should be conducted in conjunction with the
Company s Integrated Resource Planning (IRP) process.
Mr. Kline noted that markets exist in the West for ancillary services and the cost
to Idaho Power of providing ancillary services should be measured from two
perspectives, the cost of integrating wind facilities using its own generation and
transmission and the opportunity cost of selling excess ancillary services to other entities.
The snggestion waf; made that at the next workshop the grOllp discuss the types of
services encompassed by the tenn
, "
ancillary services.
2. IPCo Issue No.2: How should those costs be reflected in wind
. QF purchase prices?3. Should avoided costs for QF wind resources be determined
using a different methodology than the current SAR methodology? If so, what
methodology should be nsed? The group detennined that these two issues would be
discussed in more detail at the next workshop.
4. Should the availability of published rates be limited to ensure
that some portion of total wind resource acquisitions come from RFPs? Mr. Kline
explained that this issue raises the question whether the JPUC should consider more than
. one pricing methodology to set prices for wind QFs to assure that utility customers
receive the best price for wind resources- Rick Sterling, JPUC Staff, inquired whether the
Commission could legally cap the amount of energy received from QF resources in order
to pennit utilities to pursue wind resources via RFPs. Bruce Griswold of Pacificorp
suggested that published standard rates versus negotiated QF contracts could be used as a
benchmark for price differentials.
Mike Heckler of Windland reminded the group that the nature of the resource, for
example, intennittent versus finn, affects the cost of the resource to a utility and its
customers and that different technologies can have different avoided cost rates. He noted
that one benefit of the RFP process is the cost set via the RFP can assist in establishing
the avoided cost for a resource in a particular service area.
Peter Richardson representing Exergy, Inc. stated that the mode or nature of the
resource should not be an issue; instead, the issue should be the cost avoided by the
IPC-E-65-22 Scheduling Workshop Meeting Minutes of August 29, 2005 -
utiHty in purchasing energy generated by QFs. He emphasized that it is inappropriate to
single out individual energy resource types for differing avoided cost rates and suggested
that the group look at integration costs for all resource technologies.
The group concurred that Issue No.5 identified by Exergy should be discussed in
conjunction with Idaho Power s Issue No.4. Bart Kline suggested that all legal issues
identified by the group should be separately identified and addressed by legal
representatives working in the group.
5. What actions should the Commission take to prevent
developers of large QF projects from configuring those projects into multiple
smaller projects to qualify for the published rates? Bruce Griswold of Pacificorp
noted that existing PURP restrictions may already act as disincentives to the
reconfiguration of larger QF projects into smaller projects. He cited the need for separate
substations and contracts as cost disincentives that act to discourage the reconfiguration
of larger QF projects into separate smaller facilities. Bart Kline advised the group that
the IPUC has previously issued orders in the Earth Power Resources case holding that, if
a facility qualifies as a QF and meets the size requirements set by the Commission, the
project is entitled to the published rate. Peter Richardson stated that Exergy s perspective
is that reconfiguration of a project to obtain the maximum avoided cost rate is not
inappropriate or undesirable.
Bruce Griswold observed that both the RFP and the negotiated contract processes
allow l;uusiut:raliull of integration costs in determining thc cost of thc cncrgy obtaincd
from a resource; however, the same adjustments cannot be made if a project is eligible to
receive the tariff or avoided cost rates. Dean Brockbank of Pacificorp noted that, while
Commissions are limited in their ability to control or regulate whether a QF reconfigures
a project to become eligible for the published rates, the Commission detennines what the
published rate is and, in effect, can influence whether QFs are motivated to reconfigure
projects.
6. Discovery Parameters? Scott Woodbury, IPUC counsel, stated
that discovery provides the opportunity for the parties to obtain specific infonnation
regarding issues raised in this matter. He observed, however, that certain fonnalities
would have to be observed to protect proprietary interests. In response to an inquiry from
Peter Richardson, Bart Kline reminded the group that Idaho Power s 2005 Wind RFP is
only temporarily on hold and that the Company intended to maintain the validity of the
process-
The group proceeded to discuss the Issues list proposed by Exergy, Inc. as
follows.
1. Is it discriminatory to set avoided cost rates for wind resources
using a mdbodology different from setting avoided cost rates fOJ- other resources?
The general consensus was that this issue was a legal matter that each party should be
prepared to address at the next scheduled workshop. The question arose whether it was
IPC-E-oS-U Sd,,:duliug Wo.-Juhop Meeting MinutQ of August 29, 2005 - 3
appropriate to single out wind resources for separate consideration. Bart Kline reminded
the group that the IPUC already determined that wind resources were unique and that it
was suitable to study avoided costs for wind resources separately from other renewable
resources. Bob Laff~rty of Avista observed that the cost of integrating resomces other
than wind onto a system is not as great and that, therefore, it is incumbent on a utility to
consider those cost differences. Rich Rayhill of Ridgeline Energy encouraged the group
to also focus on the positive attributes of wind energy in its discussion of this issue.
2. If there are ancillary service costs incurred by Idaho Power to
integrate wind into its system, how much of those costs are already being assumed
by developers through the imposition of the 90/110% band?
3. Will the 90/110% band be eliminated if ancillary service costs
are imposed on wind projects? The group concurred that these two issues could be
addressed in conjunction with other issues identified by the parties.4. Since RFP acquisition of power is outside of PURP A, should
impacts of QF acquisitions even be considered when setting avoided cost rates? Bart
Kline observed that it is prudent for the Commission to consider the impact of both RFP
acquisitions and PURP A acquisitions when determining the cost of services to a utility'
customers.
5. If there is a limit or cap put on acquisition of wind resources,
should it b~ applicable to all resources, regardless of motive source? Is it
discriminatory to cap QF acquisitions based on motive force? Is it legal to do so?
What effect would such a cap have on Idaho Power s acquisition of utility-owned
resources? The group had previously decided that this issue should be discussed in
conjunction with Idaho Power Issue No.
6. What is the definition of firm for purposes of entitlement to
published rates? Should that definition be applicable to all resources, including
utility-owned resources? Peter Richardson requested that the group define what
meant by a "firm" resource.
7. Are the ancillary service benefits of geographically diverse
wind projects to be included in an ancillary services cost calculation? The group did
not specifically discuss this issue at the meeting.
Develop schedule for workshop(s) to consolidate issue lists/discuss positions
on issues: Pacificorp indicated that it has completed its wind integration study and is in
the process of refining and updating that study. A vista reported that it intends to
undertake additional studies. Rick Sterling of the IPUC Staff noted that integration
studies conducted by the utilities must proceed for future discussions to be meaningful.
Ken Miller of the Northwest Energy Coalition observed that it would be helpful to
have a certain amount of wind resources integrated onto a system in order to study the
IPC-O5-22 Scht:tluliug Wol'luhop Meeting Miuutes of August 29, 2005 - 4
consequences to the utility of incorporating that resource onto its system. Bill Eddie
suggested that studies have already been conducted that evaluate the impact on a utility
system when 10% of wind had been incorporated onto a system. Karl Bokenkamp of
Idaho Power Company noted that it would be desirable to have reliable data specific to
Idaho Power to more accurately measure the impact of integrating wind resources onto
the Company s electrical system.
Idaho Power offered to share the results of Idaho Power s integration study with
group participants. Karl Bokenkamp identified the consultants Idaho Power is
considering using to conduct the Company s wind integration study. He reported that the
study would take between six and nine months to complete. Joe Miller suggested that an
interim solution be identified to avoid putting QF development on hold during the time
that Idaho Power is conducting its integration study. QF developers were reminded that
they could submit settlement offers to the utilities in the interim period.
The group concurred that use of a professional facilitator would be desirable for
future workshops. Bart Kline agreed to make arrangements for a facilitator to assist at
the next workshop The group agreed that the following matters were to be completed
prior to the next workshop:
(2)
(3)
The meeting minutes/status report would be distributed among
the parties for review and approval;
The parties would come prepared to refine the issues list at the
ncxt workshop; and
If possible, the consultant hired by Idaho Power to conduct
the Company s integration study should be present at the next
workshop.
(1)
The next workshop was scheduled for Tuesday, September 20, 2005 at 9:30 AM
Mountain Time at Idaho Power Company s corporate headquarters in Boise, Idaho.
Adjournment: The meeting was adjourned at 3:50 PM.
IPC-E-oS-22 Scheduling Workshop Meeting Minutes of August 29, 2005 - 5
CASE NO. IPC-05-
August 29, 2005
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August 29, 2005
Initial Scheduling Meeting
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CASE NO. IPC-E-O5-
August 29,2005
IDAHO POWER'S PROPOSED ISSUES LIST
What is Idaho Power s incremental cost for ancillary services needed to integrate
intermittent wind resources?
How should those costs be reflected in wind OF purchase prices?
Should avoided costs for OF wind resources be determined using a different
methodology than the current SAR methodology? If so, what methodology
should be used?
Should the availability of published rates be limited to ensure that some portion of
total wind resource acquisitions come from RFPs?
What actions should the Commission take to prevent developers of large OF
projects from configuring those projects into multiple smaller projects to qualify
for the published rates?
Discovery parameters?
lU,C...t'J'rARlJ)...sQNr & (r)JU;Ml'tfATTORNEYS AT LAW
Pt"Tt"T RichHdson
T.I: 208-938-7901 Fax: [phone]
pcrcr€" rkh. rdsDn,ndDI.,ry.cDm
O, ,80' 7218 Bois.. 10 83707 - -51; N, 27th Sr. Boisc, ID 83702
CASE NO. IPC-05-
AUGUST 29, 2005 WORKSHOP
EXERGY'S ISSUE LIST
(This list is for workshop discussion purposes only and is not to be seen as an
offer of settlement or otherwise limiting Exergy s rights to assert other or
different issues before the Idaho Public Utilities Commission.
Is'it discriminatory to set avoided cost rates for wind resources using am~ different from setting avoided cost rates for other
resources?
If there are ancillary service costs incuITed by Idaho Power to
integrate wind into its system,how much of those costs are already
being assumed by developers through the imposition of the 90/110%
band?
Will the 90/110% band be eliminated if ancillary service costs are
imposed on wind projects?
Since RFP acquisition of power is outside of PURP A should impacts
of QF acquisition on RFP acquIsitions even be considered when
setting avoided cost rates?
If there is a limit or cap put on acquisition of wind resources, should it
be applicable to all resources, regardless of motive source? Is it
discriminatory to cap QF acquisitions based on motive force? Is it
legal to do so? What effect would such a cap have on Idaho Power
acquisition of utility-owned resources?
What is the definition of finD for purposes of entitlement to published
rates? Should that definition be applicable to all resources, including
utility-owned resources?
Are the ancillary service benefits of geographically diverse wind
projects to be included in an ancillary services cost calculation?
Draft 09/26/2005
WIND ENERGY WORKSHOP #2 , PHASE 2 OF CASE No. IPC-O5-
SEPTEMBER 20, 2005, 9:30 A.M. TO 4:00 P.
AUDITORIUM ~AST, IDAHO POWER CORPORATE HEADQUARTERS, BOISE, ID
Facilitation
Documentation
Susan Hayman, North Country Resources, Inc.
Natalie Chavez, Chavez Writing & Editing, Inc.
WORKSHOP OBJECTIVES
1) Develop workshop operating principles, objectives and outcomes
2) Reach agreement on definitions of key terms
3) Refine and prioritize issues
4) Identify information needs
5) Develop an issue discussion schedule
WORKSHOP DECISIONS AND OUTCOMES
Operational protocols for the workshop series were refined. Participation is open , operational
decisions will be made by all participants, but decisions about products and settlement will be made
by parties to the case. Workshop purpose will be revisited after an imminent IPUC order. Wording
was added for sections 8 and 9, and section 4 is "to be determined" pending further discussion.
Workshop coordinators will include one representative from each party to the case, as well as anyone
else interested.
Several key terms were dropped from a list of working definitions ("firm energy entitled to published
rates
" "
interconnection cost " and "flat delivery service
). "
Firm energy" was tabled for now. "Ancillary
services" was redefined, and definitions were added for "other services" and "benefits.
The draft list of issues was discussed and trimmed. Four issues were eliminated from further
. discussion at these workshops. Three issues were tabled pending some action. And issues 1.2 and
3 will be combined, leaving eight issues.
.'
Participants developed a list of information needs, which includes design and content information
about the integration study, benefits of wind energy, information from Richardson, results of imminent
Commission orders
, '
and a synthesis of existing integration cost studies related to ancillary services.
Issues that could"be discussed, in whole or in part, prior to completion of the integration study were
identified. Based on this information, participants set the agenda for the next workshop, scheduled for
Friday, October 14.
ACTION ITEMS
Action Item Responsible Party
Richardson
Deadline
Drafting and review
completed by October 14
Provide brief on issue 2., circulate it to the
attorneys on the work group for reply, and
update everyone at the October 14 workshop
Provide definition for "firm" for the work group to
consider (issue 5.
Richardson To Hayman for circulation
by October 7
Report on October 14Visit with consultant on opportunity for
bifurcation" or split (two tasks: short term and
long term)
Bokenkamp
Summary of the September 20, 2005, Workshop
Phase of Case No. IPC-05-Wind Energy Workshop
Action Item Responsible Party
Developers
Deadline
Compile list of benefits to be considered in
integration costs (issue 1.
Develop a strawman about project configuration
(issues 4.1 and 4.
Idaho Power
To Hayman for circulation
by October 7
To Hayman for circulation
by October 7
WORKSHOP INTRODUCTION
Before the workshop was called to order, Susan Hayman, North Country Resources, handed out packets
including the agenda, draft operational protocol, draft working definitions of key terms, and draft list of
synthesized issues. She then sent a sign-in sheet around, asking people to verify their information.
Hayman welcomed participants (Appendix 1), reviewed workshop objectives (above), and reviewed the
agenda (Appendix 2).
WORKSHOP OPERATIONAL ISSUES
Hayman asked people to review the operational protocols (Appendix 3) for a few minutes. Then she
asked for specific revisions related to the protocols listed. Several issues were raised in revising the
protocols (shown in the order discussed):
Section 5: Composition of Workshop Participants-Discussion centered on whether participation
- was open or exclusive to the primary parties. Concerns ranged from changing dynamics to issues
beyond the scope of the workshop series. It was decided that the group of participants might,
narrowed when the time comes to make decisions and recommendations.
Section 6.6: Workshop Coordinators-Workshop coordinators are those points of contact with
whom Hayman works to refine the agenda and do other administrative coordination. After lively
discussion on who should represent different interests and distinctions among the different types of
developers, workshop participants decided to include a single point of contact with each party to the
case and anyone else interested. Parties are to provide that single contact person to Hayman, and
other interested parties are to let Hayman know they are interested in serving as workshop
, coordinators. The IPUC agreed to provide Hayman with an amended notice of parties if the list of
intervenors changes.
Section 8: Analysis-The following sentence will be added to the existing information about
analysis: "Analysis needs will include a description of the product and the information needs driving
that product."
Section 9: Decision Making-Sections 9.2 and 9.3 will be revised to show that decisions about
products and settlement will be made by "parties to the case.
Section 2: Workshop Purpose-after some discussion, participants agreed to retain the three
purpose statements for now. IPUC Staff commented that three petitions are before the Commission
and the resulting order will be out September 21. The workshop purpose may change based on that
order.
Section 3.2: Potential Interim Solutions-Mike Heckler, Windland, expressed his discomfort with
the term "interim." in section 3.2. Hayman had interpreted an interim solution as something that would
be in place until the integration study was done, if one was conducted. Others agreed with that
interpretation. Heckler suggested making a distinction between the pre-July 1 and post-July 1
applicants, but others objected to the pre-July 1 because it was about grandfathering, an issue
outside the scope of the workshop series. Lobb believed that the decision to conduct an integration
study qualified as an interim solution. The settlement proposal from Bill Eddie, Advocates for the
West, may be another interim solution. Lowering the published rate eligibility cap to 100 kW for
certain qualifying wind-powered small power production facilities (QFs) was another. Lobb
commented that there was a methodology in place to get contracts from the utilities. In addition, there
was still the opportunity to get a contract through the IRP. Hayman suggested adding wording to the
Summary of the September 20, 2005, Workshop
Phase of Case No. IPC-05-Wind Energy Workshop
effect of "setting the parameters for utility purchase of OF wind power until final decision" The
decision was to keep the wording as is but track issues pertaining to it.
Section 4: Workshop Tenure-Lobb clarified that the end point is the conclusion of the integration
study and calculation of a published avoided-cost rate by the IPUC. If the parties arrive at a
settlement, the time frame could change. Participants agreed to indicate that the workshop tenure is
to be determined and return to this issue as the workshop series progresses.
The agreed-on changes will be made to the document. The final document will be provided to those on
the workshop mailing list prior to the next workshop.
DEFINITION OF KEY TERMS
Hayman directed people s attention to the poster with draft working definitions (Appendix 4) that she had
developed based on her review of the August 29 workshop minutes and conversations with people.
These definitions aren t to describe in detail so much as to give the group a common "general" use during
discussions.
Ancillary Services
At the August workshop, participants expressed the need for a better understanding of "ancillary
services." Hayman introduced Tom Noll, Idaho Power, who presented information on the topic. Noll read,.
the definition of ancillary services found in the FERC Order No. 888: "Those services necessary to
q" . '
support the transmission of electric power from seller to purchaser given the obligations of control areas.
and transmitting utilities within those control areas to maintain reliable operations of the interconnected
transmission system.
He also distributed a four-page handout on transmission and interconnection requirements. This
information was excerpted from the 2004 request for proposals (RFP) regarding wind generation
(Appendix 5). This same definition of ancillary services applies to all generation resources, although the
. services,themselves might be slightly different based on the characteristics of different generation.
resources. Noll talked about each of the six ancillary services listed on the third page of the handout:
system control; reactive supply and voltage control from generation, regulation , operating reserve
(spinning), operating reserve (supplemental), and energy imbalance. Reactive control differs for different
generation resources. Although the description for regulation included the phrase "minute by minute," Noll
said that "cycle to cycle " which is much faster, is more accurate. He commented that ancillary services
are different from the 90-110% band: the time scale of the band is monthly, while for ancillary services, it
is instantaneous. Noll also pointed out transmission cost estimates by zone for both the generation
interconnection and network transmission upgrades (see the fourth page of Appendix 5). The purpose
was to give bidders some estimate of the interconnection costs and help Idaho Power evaluate the
proposals.
Idaho Power has initiated a study (contract) to estimate the integration costs associated with adding wind
power to their system (including the cost for ancillary services). The number of consultants that offer
these services is limited. So far, the company has received one proposal. Another proposal has been
promised but not yet delivered. The integration study will likely take between six and nine months to
complete, although the consultant may release some information at points along the way. The other
utilities present were asked about their interest in sharing aspects of the study. PacifiCorp has already
conducted an integration study, but Avista is interested in sharing some components.
Noll was asked about thresholds that are too small to study. Noll said that the IPUC has already identified
100 kW as a reasonable base level. It was clarified in further discussion that that number was based on
FERC requirements rather than on analysis. The consultant is expected to address that question.
1 Federal Energy Regulatory Commission. March 29, 1995. Promoting Wholesale Competition Through Open Access Non-
discriminatory Transmission Services by Public Utilities. Docket RM95-000. Washington, DC.
Summary of the September 20, 2005, Workshop
Phase of Case No. IPC-05-Wind Energy Workshop
The issue of the 90-110% band was raised. Noll reiterated that, although Idaho Power operates at a
number of different time horizons, energy imbalance and ancillary services are considered "real time.
The company considers the 90-110% band a different issue because it's figured on a monthly scale.
Participants agreed that the working definition of ancillary services was inaccurate. Noll suggested using
the six items as the definition. He added that ancillary services provided for system reliability in real time
which is close but not the same as services provided to firm energy.
IPUC Staff wants to see that ancillary service costs are paid incrementally all along and that they are
spread fairly among all parties using the services. Noll explained that characteristics of wind are such that
costs for energy imbalance may be a little higher than for turbines.
Other Key Term Definitions
Hayman requested that participants assess the other working definitions for accuracy. The following
changes were made (definitions deleted, revised, or added):
Firm energy was a difficult term for workshop participants to define. IPUC Staff said that the need for
firm energy was the reason for the 90-110% band. Participants wondered, then, what the IPUC
means by firm energy. People agreed that "firm" is sometimes used in a general sense, while at other
times, the meaning is very specific. Clint Kalich, Avista, commented that the meaning of "firm" differs
at different levels: hour, day, month, etc. He views the concept as a continuum rather than a
dichotomy. Brian Jackson, Renaissance Engineering & Design, added that the connotations of the
word depend on an individual's perspective. "Dispatchable" was mentioned as a possible
replacement but then eliminated. Ultimately, the group decided to delete the term and definition from
the list. If the need for a common understanding arises, a subgroup may be assigned to draft a
definition. (Later, Richardson agreed to draft a strawman definition for discussion at the next
workshop.
The term "firm energy entitled to published rates" was also removed from the list because participants
, ': generally agreed that the IPUC had defined this in a previous order.
' The definition for integration cost was first modified to add the concept of benefits. After further
discussion about whether the definition should be general to all energy resources or specific to wind
the group agreed to the following definition: "ancillary and bther services necessary to safely and
, reliably accept intermittent energy for a period of 1 or more hours." The consultant may further refine
this.
The term "interconnection cost" and its definition were deleted because the term is defined in
regulations.
The term "flat delivery" was used in the original petition that Idaho Power filed with the IPUC and then
picked up in a Commission document. However, the group decided that no definition is necessary for
the sake of the workshops. The concept of "flatness" will be put into the total cost of integration by the
consultant. The term and draft definition was eliminated from the list.
. "
Other services " as used in the definition for integration cost, were defined as "those services in
addition to ancillary services necessary to integrate wind energy, to be defined by consultant study,
and may include unit commitment, transmission, redispatch, and load-following among others." It was
suggested that "generation-following" might be more accurate than "load-following" in the definition.
Capacity is an issue that participants don t want to lose, although the consultant will flesh other
services out later.
The term "benefits" was added to the list and defined as "factors or characteristics of wind that
contribute positively to utilities and may offset costs." Benefits will be considered during the
integration study.
REFINEMENT AND PRIORITIZATION OF ISSUES FOR DISCUSSION
Prior to Workshop #2, Hayman e-mailed participants a draft list of issues synthesized from the August 29
workshop and subsequent discussions with participants (Appendix 6). She posted the same list in front of
the group and asked people to annotate issues for elimination (E), duplication (D), strictly legal (L),
Summary of the September 20, 2005, Workshop
Phase of Case No. IPC-05-Wind Energy Workshop
already decided by IPUC (I PUG), beyond the scope of this workshop series (B), or keep (K). She
recommended that participants agree to raise all relevant issues at this time, and further agree that
additional issues could only be added if new information was received and/or the whole group accepted
additional issues. Work group members agreed with that process.
After people coded the issues on the poster, Hayman led the work group through each issue and asked
for reasons when codes differed. She marked those that participants agreed to keep and noted those to
be eliminated or tabled for now. Each issue number and a summary of the group s input are listed below
(see Appendix 6 for issue wording):
1 .The group unanimously agreed to keep this issue.
The 90-110% band isn t universally viewed as required. The IPUC order on that issue is due out
soon, so the group voted to keep this issue.
Participants decided to combine issues 1.2 and 1.
The group decided to keep this issue. The developers agreed to list benefits, which can then be
passed on to the consultant.
Section 1 was retitled from "Ancillary Services" to "Integration Costs." The group decided to keep
this issue.
With the exception of one participant, the group believed this to be an IPUC issue. Richardson
agreed to write a brief of his reasons for believing it to be a legal issue and circulate it to the other
attorneys. This brief can be attached to the workshop minutes for the Commission to consider, or
the group of attorneys may make a recommendation to the group. The issue was tabled unless
presented by the group of attorneys for further consideration.
IPUC Staff believed this issue to be beyond the scope of this workshop series. It could take
several years to develop a methodology other than a surrogate avoided rate (SAR) based on a
natural gas combined-cycle combustion turbine. Since adjustments for intermittent wind are
included in issue 1.5, this issue was eliminated.
1.4
Participants pointed out that "OF" in the second part ofthe question should be changed to "RFP,
. Therewas enough interest in the relationship between energy acquisition under the RFP and OF
processes that participants decided to retain this issue, if only to provide benchmark information.
The group didn t want to throw this issue out in case an interim rate came up that everyone could
agree to.
Utilities recognize that they are obligated to buy all OF power offered to them so there may be no
dispute. The group decided to eliminate this issue.
Attorneys were tasked with determining the legality of availability. Richardson will also look at this
issue in his brief, so the group decided to keep it for now. Richardson s information will contribute
to future discussions.
The group decided to eliminate this issue.
Lobb said that, before this issue can be assigned to the attorneys, the group needs to "discuss
the universe of rationales." Hayman left the issue for more work group discussion.
The group decided that this issue should be handled the same as issue 4.
Richardson wasn t sure what the IPUC means when it states that wind projects offered on a firm
basis are entitled to published rates. Lobb responded that the (PUC views a project as firm if it
has characteristics of SAR as far as dispatch ability, reliability, and availability. The order on the
Schwendiman project (PacifiCorp) should help clarify this concept. Richardson will develop a
strawman definition of "firm" for discussion as the next workshop.
The group decided to eliminate this issue.
Summary of the September 20, 2005, Workshop
Phase 2 of Case No. IPC-05-Wind Energy Workshop
INTEGRATION STUDY
Although not originally an item on the agenda, Ric Gale, Idaho Power, asked for a few minutes to talk
about the integration study. Gale identified Karl Bokenkamp, Idaho Power, as the expert who has been
corresponding with the two potential consultants. The company hopes to have a consultant hired by the
end of September. When asked about recovering costs for the study, Gale said that, because this is a
test year, Idaho Power will submit the study to the IPUC for review and most, if not all, of the costs will be
included. Hayman added a discussion of the integration study to the agenda for the next workshop so that
Bokenkamp and possibly the new consultant can provide information and take questions.
INFORMATION NEEDS
During earlier discussion, Hayman noted participant interest in studying varying integration costs based
on variables of operation or energy imbalance. This interest includes operation integration vs. ancillary
services, thresholds for "significant" integration costs, and the belief that everyone should pay their fair
share for the use of ancillary services. These factors could be included in the company s proposed
integration study.
Several participants discussed the need for the actual integration study. Testimony about a number of
studies was available to inform the issues here. Gale said that the company is reluctant to accept results
of those studies without having the chance to analyze them in its own integration study, done also as part
of the integrated resource planning (lAP) process. Kalich added that those studies do not reflect the
hydroelectric-dependent nature of the Northwest. At this point, participants determined that they need to
know what information will be gathered, what questions will be answered, and what actions will result
from the integration study. The study should incorporate results of other studies, as relevant, and look at
the 90-110% band and ancillary services.
Hayman asked what information, besides the integration study, would help address the issues that were.
retained. Information needs associated with an interim avoided-cost rate can include testimony and any'
settlement offers that are presented. Other information needs identified by the group include the list of
benefits from the developers, the strawman definition of "firm" by Richardson, results of imminent
Commission orders, and a synthesis of existing integration cost studies related to ancillary services.
During development of the list of information needs, Richardson questioned Section 3 of the settlement
proposal presented by Bill Eddie (Appendix 7-copies of this settlement proposal had not yet been
distributed to all work group participants). This section says that OFs that already have contracts with
Idaho Power but are not yet operational will provide the company with certain information. Such
information is already available for OFs that have applied but not yet been given a contract. The idea was
to determine which of these OFs would actually develop their projects. Idaho Power responded that the
company has to assume that those with contracts will develop their projects. It cannot make this
information available without permission from the contracted OFs. After 10 months, a project can be
assumed to default. And if it's "in the money," the company can sue. Otherwise, the company has no
legal recourse. Heckler commented that integration costs are a function of penetration. OF projects that
do not come to fruition affect integration costs further along. The group decided to put this information
need on hold until a determination could be made.
NEXT STEPS
Hayman asked about the schedule for future workshops. Gale preferred that the next workshop be about
four weeks from now so that Idaho Power can hire the consultant and digest the IPUC order. Participants
will also have time to accomplish their action items. Once the consultant is on board, the group can
schedule out further.
Before setting the agenda for the next meeting, Hayman had participants identify issues that can be
discussed without the integration cost information. Those issues are listed below:
Summary of the September 20, 2005, Workshop
Phase of Case No. IPC-05-Wind Energy Workshop
Issue
1.4
2.4
(maybe)
Text and Notes
Do the ancillary service benefits of geographically diverse wind projects factor into the ancillary
services cost calculation? If so, how?
(assigned to developers to list benefits and provide before next meeting)
Is it discriminatory and/or illegal to set avoided cost rates for wind resources using a
methodology different from that used for other resources?
(assigned to Richardson to develop and provide before next meeting)
Since RFP acquisition of power is outside of PUPA, should impacts of RFP acquisitions even be
considered when setting avoided cost rates?
If an interim avoided-cost rate for PURPA projects was established until completion of the
integration study(s), would PURPA contracts under the interim rate be potentially subject to a
revised avoided-cost rate in the future?
(Once a consultant is on board, there might be an interim solution, such as some kind of
discounted published rate of fund for building the necessary infrastructure into which wind
farm operators pay.
Should the availability of published rates be limited to ensure that some portion of total wind
resource acquisitions come from RFPs?
Is it discriminatory and/or illegal to prevent developers of large OF projects from configuring
those projects into multiple smaller projects to qualify for the published rates?
Should the Commission take action to prevent developers of large OF projects from configuring
those projects into multiple smaller projects to qualify for the published rates? If so, what action
should be taken?
What is the definition of firm for purposes of entitlement to published rates?
(assigned to Richardson to develop and provide before next meeting)
After this identification activity, participants set the following agenda for the next workshop, scheduled for
Friday, October 14:
Discussion of integration study
Consultant
Review of Commission orders and effects on the process
Richardson s action items
Strawman for issue category 4 (about project configuration)
Discussion of legal issues
Perhaps proposal to address what the Commission should do
Benefits
Components
Design
WRAP-UP AND WORKSHOP EVALUATION
Hayman reviewed action items (see page 1) and asked participants to evaluate the workshop. Overall,
participants expressed that it was well organized and effective. People were congenial and collaborative,
given the magnitude of the task before them. And they appreciated the opportunity for discussion. One
participant knew that people were tempted to jump ahead. However, dealing with some of the
cumbersome issues that they did today will help facilitate the process later on.
Summary of the September 20, 2005, Workshop
Final
WIND ENERGY WORKSHOP #3, PHASE 2 OF CASE No. IPC-O5-
OCTOBER 14 2005, 9:30 A.M. TO 4:00
AUDITORIUM EAST, IDAHO POWER CORPORATE HEADQUARTERS, BOISE, 10
Facilitation
Documentation
Susan Hayman, North Country Resources , Inc.
Natalie Chavez, Chavez Writing & Editing, Inc.
WORKSHOP OBJECTIVES
1) Recap recent Commission orders
2) Discuss the proposed integration study, study components, and design
3) Discuss and identify areas of agreement for Issues 4 and 5
4) Review the legal perspective for Issues 2.1 and 3
5) Determine the process for handling settlement proposals
WORKSHOP DECISIONS AND OUTCOMES
Scott Woodbury, counsel for the Idaho Public Utilities Commission (IPUC or Commission), reviewed
three orders issued since the September 20 workshop.
Karl Bokenkamp, Idaho Power, and Mark Ahlstrom, Wind Logics , talked about the wind integration
study, after which participants asked questions and raised issues that they would like considered in
the study.
Participants disagreed on issues pertaining to disaggregation (Issue 4). Interested people have the
option of forwarding ideas about addressing the disaggregation concern to Susan Hayman to compile
and distribute. If she receives no input, the issue will be considered tabled.
Issue 5 was tabled until the integration study is completed.
Issue 2.1 was removed from the list, with the understanding that the underlying issue is about
intermittency and wind provides the most pressing context for discussion of that issue. Outcomes of
this workshop series may inform exercises for other intermittent resources.
Issue 3 was rewritten as "Could the availability of published rates be limited in the interim?" with
interim" being defined as the time between now and when the integration study results are in and the
Commission issues an order.
Settlement proposals will be handled in two separate meetings. On Day 1 , people can share draft
proposals that they have developed and use them to identify a list of issues suitable for settlement.
On Day 2, participants can discuss the specifics of the proposals.
The next workshop is scheduled for November 18 at Idaho Power. It will also serve as Day 1 of the
process for handling settlement proposals. Day 2 is tentatively set for December 2.
ACTION ITEMS
Action Item Responsible Party
Hayman
Deadline
Early next weekE-mail 12-page document from Jackson
(regarding system benefits) to participants
Propose disaggregation criteria that would be
palatable/acceptable to developers; provide to
Hayman no less than 2 weeks prior to next
workshop
Those who choose to take
the challenge!
November 4
Summary of the October 14,2005, Workshop
Phase 2 of Case No. IPC-05-WInd Energy Workshop
Action Item
Prepare drafUrough settlement proposals that
address one or more issues and bring to next
workshop for discussion
Responsible Party
Any interested participant in
the workshops
Deadline
November 18
WELCOME, INTRODUCTIONS, AND OVERVIEW
Before the workshop was called to order, Susan Hayman, North Country Resources, handed out packets
including the agenda, operational protocol, and issues list. She then sent a sign-in sheet around , asking
people to initial next to their names, verify their information , and/or add contact information if not already
on the sheet. Hayman welcomed participants (Appendix 1) and reviewed the agenda (Appendix 2). She
also pointed out posters regarding meeting conduct, workshop purpose and products, and workshop
issues.
Hayman mentioned that one person had expressed concern about product decisions and
recommendations being made by parties to the case only (Operational Protocol, Section 9.). The
concern was that others participating in the workshop could be affected by these decisions and
recommendations, and should have a say in their approval. She noted that this section states that all
participants will be included in the discussion, although parties to the case will make product decisions
through consensus. It was determined that this would be tested to see if participants felt that their
interests were being represented by the parties to the case. It was also noted that the Idaho Public
Utilities Commission (IPUC or Commission) would have the final say on any decisions or
recommendations reached during the workshops.
RECAP OF RECENT COMMISSION ORDERS
Scott Woodbury reported on three wind-related orders issued since the September 20 workshop. These
orders are posted on the website (www.puc.state.id.us). The first (IPC-05-24) regarded IPC's power
purchase from Arrow Rock Wind Generating Project about 100 miles northwest of Billings (Judith Gap).
Arrow Rock has a capacity to produce up to 19.5 MW, but under normal conditions the project will not
exceed 10 aMW. The project has a firming agreement with NorthWestern Energy and will deliver 7 MW in
June, July, and August; 9 MW in September through February; and no energy in March, April, and May.
That agreement was approved by the Commission.
In the second case (PAC-05-09), the Commission rejected the power purchase agreement between
Utah Power & Light and Schwendiman Wind, finding that the mechanical availability guarantee (MAG)
was an unacceptable substitute for the 90/110% band and didn t protect ratepayers. Parties have until
October 18 to amend the agreement and resubmit.
The third case (IPC-05-22) related specifically to this workshop series. The Commission issued the final
order on reconsideration, which extended the date for grandfathering eligibility from July 1 to August 4.
This order addressed a number of petitions, granting that by Energy Vision but denying the others. It also
reaffirmed the criterion for QF projects regarding the interconnection application.
Two questions arose after this update:
Use of the word "reliability" on p. 5 of the Schwendiman case ("
.. .
even if the Commission determines
that the utilities are free to develop their own contract terms to address the firmness and reliability
issues...). At the last workshop, this term seemed to apply to the subsecond time frame. Randy
Lobb, IPUC, said that he would have to look at staff comments in their entirety to know what they
meant by reliability, but he believed it was basically the predictability of output.
Reference to "equivalent alternatives" on p. 10 of the same case ("...the Commission may consider
equivalent alternatives to the 90/110 performance band approach...). Lobb responded that IPUC
staff have tried without success to identify such alternatives.
Summary of the October 14 2005, Workshop
Phase of Case No. IPC-05-Wind Energy Workshop
INTEGRATION STUDY
Karl Bokenkamp, Idaho Power, was pleased to introduce Mark Ahlstrom, WindLogics , who was also
speaking on behalf of the study leader (Bob Zavadil, EnerNex) who was unable to attend. Ahlstrom was
here to talk about the consultants' backgrounds, integration issues, key results and findings from other
studies, and their general approach for the Idaho Power study. His presentation is included in Appendix 3.
According to Bokenkamp, wind generation is an attractive source of electric energy, but the "fuel supply
is more variable and uncertain than conventional resources. This variability and uncertainty are
accommodated by adjusting other controllable resources. Because the necessary adjustments have
technical and financial implications, wind integration studies attempt to determine the nature and
magnitude of the required adjustments and their economic consequences. Idaho Power had not
conducted a wind study for the Integrated Resource Plan (IRP) and decided to contract such a study,
especially given the amount of wind proposed to come onto the system. The company considered three
companies (EnerNex and Wind Logics, as well as GE and RW. Beck). Last week, EnerNex was selected
based on favorable recommendations. In reading about other studies, he saw Ahlstrom and Zavadil'
names repeatedly for conducting wind generation integration studies and serving as technical reviewers
for other studies (see "Consultant Experience" slides in Appendix 3).
Bokenkamp summarized some wind generation impacts on power system operation and control. The
uncertainty of wind energy deliveries for forward periods can complicate generation scheduling. The
variability of wind generation requires that other resources be started, stopped, or moved up and down
more frequently to maintain required control performance. But this increased maneuvering can lead to
higher operating costs for those units. In addition, load varies as well, so impacts are a function of wind
and load combined, not wind alone. He appreciates any input provided by this group on the study ideas
outlined. Then he turned the floor over to Ahlstrom.
Ahlstrom reviewed the general analytical approach for wind generation integration studies, which included
the following tasks:
Developing a time series "model" of wind generation with sufficient resolution for gauging
maneuvering" impacts (e., 10-minute intervals)
Assessing operations impact through chronological simulations
Determining uncertainty impacts by mimicking scheduling procedures for the control area
Comparing to a case where wind generation does not have variability or uncertainty attributes (e.
flat block third-party generator)
Of course, there are challenges with this approach. Most of the wind generation has yet to be built, and
the expected geographic spread is substantial. Neglecting transmission issues, control area impacts are
based on the behavior of the aggregate wind generation, not individual plants. Weather modeling
methods are used to overcome these challenges and provide a realistic and accurate data set for the
power system modeling activities.
To recreate the weather, they will model real weather data at high resolution, run it through hypothetical
projects at logical locations and anticipated types of turbine technology, and inject it into the system.
Although Wind Logics started as a supercomputer sort of company, it moved into atmospheric modeling
and visualization for forecasting and then into wind energy analysis. Currently, the company has 30
people and 300 computers at two sites in Minnesota focused on wind resources , wind variability, and
wind forecasting. They have found that, with regard to wind, location and terrain are major factors; wind
power is proportional to the cube of wind speed, so there is great value in optimizing location , layout, and
height; shear, diurnal and seasonal patterns, and long-term interannual variability are some of the many
characteristics to consider; investment is up-front and considerable; and operations are complicated.
Ahlstrom then spoke at length on how they use National Weather Service data and physics to model the
weather (see relevant slides in Appendix 3). Rather than forecasting, they will use historical data and use
the modeling to fill in the gaps in both time and space. Through the model, they will get a detailed
understanding of the region and the larger weather patterns. They will also be able to run the grid down to
a few kilometers. He showed a model of March 2003 weather patterns over Colorado, with arrows
Summary of the October 2005, Workshop
Phase 2 of Case No. IPC-05-Wind Energy Workshop
depicting wind speed and direction a190 m above the ground. Ultimately, they will have baseline data
(case 1) against which to compare the system with wind (case 2).
Specific impacts of wind generation on power system operations are associated with regulation , load
following, and unit commitment and scheduling. Wind generation variability and uncertainty add some
burden in each of these areas. In addition, hydro systems generally have special considerations related to
water management and reservoir constraints. Participants wondered about the ability of the model to
assess the effectiveness of the 90/110 performance band.
Ahlstrom summarized results of other studies in Minnesota and Colorado, where integration costs
equaled $4.37 and $2.50 per MWh of wind energy delivered, respectively. Additional detail on these
studies is included in the "Results from Previous Studies" slide in Appendix 3. Most of the integration cost
related to the day-ahead unit commitment process and the dispatch of that plan over the day, while
regulation and load-following impacts were small Ahlstrom cautioned against extrapolating results to other
systems.
Per Bokenkamp, the following specific analytical tasks will be done for the Idaho Power wind integration
study:
1) Define study scenarios and assumptions
2) Develop wind speed data (WindLogics MM5 simulations)
3) Collect historical operating data
4) Create wind generation model from wind speed data
5) Assess short-term operating impacts (regulation and load following)
6) Evaluate wind integration costs (market simulation)
Additional tasks will be to evaluate the contribution of wind generation to Idaho Power system reliability
and provide an estimation of benefits for distributed wind generation development. The study is
scheduled to begin November 1 , with all tasks completed by June 2006.
Hayman had participants take a break, during which they could think of questions or concerns they had
regarding the study. Upon their return, Hayman had each participant share their questions or concerns.
Flipchart notes of this input are included in Appendix 4.
Rich Rayhill, Ridgeline Energy, then spoke about the benefits of wind generation near American Falls that
Darrel VanCoevering had put together and Hayman had e-mailed prior to the workshop (see Appendix 5).
The main two benefits were the first and second ones listed on the page. VanCoevering had included
societal benefits because those provide a strong selling point for wind generation in rural communities
but Rayhill realized that those benefits would not be included in the model.
Brian Jackson, Renaissance Engineering & Design, summarized information from the State Department
of Energy, specifically the following grid-side benefits. Hayman will e-mail this 12-page document to
participants.
Reduced energy losses in transmission lines
Reduced upstream congestion on transmission lines
Reduced or deferred infrastructure (line and substation) upgrades
Optimal use of existing grid assets, including the potential to free up transmission assets for
increased wheeling capacity
Less capital tied up in unproductive assets because the modular nature of distributed generators
means capacity additions and reductions can be made in small increments, closely matched with
demand, instead of constructing central power plants sized to meet estimated future demand
Improved grid reliability
Higher energy conversion efficiencies than central generation
Faster permitting than transmission line upgrades
Summary of the October 2005, Workshop
Phase of Case No. IPC-05-Wind Energy Workshop
Ancillary benefits, including voltage support and stability, contingency reserves, and black start
capability
ISSUE 4: PROJECT CONFIGURATION
4. Should the Commission take action to prevent developers of large OF projects from configuring
those projects into multiple smaller projects to qualify for the published rates? Is it discriminatory or
illegal to do so? If not, what action should be taken?
Prior to the workshop, Hayman had e-mailed Idaho Power s straw man proposal for addressing
disaggregation of large OF projects to qualify for the published avoided-cost rate (see Appendix 6). Bart
Kline, Idaho Power, said that company participants viewed their task as trying to find a way to reconcile
the IPUC's obvious intent in establishing a cap on entitlement to the published rate (generally smaller
OFs) and to identify a way to deal with large OFs breaking into smaller OFs to take advantage of the
published rate. This document included two options:
The Commission could adopt the FERC 100-kW cap on entitlement to published rates (an option that
may be subject to the same criticisms that convinced the Commission to increase the published rate
eligibility cap from 1 MW to 10 MW in 2002).
The Commission could adopt proposed language defining a small cogeneration facility or power
production facility eligible to receive the published rate.
Discussion focused on several issues, One participant said that he believes PURPA doesn t allow
ownership to be a criterion for availability to the published avoided-cost rate. Another responded that he
believes PURPA is about setting avoided-cost rates but not about determining who is entitled to the
published rate. That responsibility, he believes, belongs to state PUCs. Another concern about
disaggregation is the effect to utilities and ratepayers of having little competition among larger wind
projects, which tend to be more efficient. Other issues included challenges of using proximity and
ownership to determine entitlement to the published rate and the adequacy of the SAR methodology.
During the discussion, several participants commented that, if the primary concern was about a perceived
price disparity between the published rate and the market rate, then perhaps reasons for that disparity
needed to be understood and possibly addressed. The group determined that this would be addressed in
the long term through the integration study and additional discussion.
Hayman asked that participants acknowledge Idaho Power s concern about disaggregation and
brainstorm some criteria for addressing it (see relevant flip chart notes in Appendix 7). Although several
possibilities were raised, participants disagreed on whether concern about disaggregation was
appropriate or necessary. In addition, most of the criteria identified were about operations rather than
configuration. Several people feel that the wind market will be self-regulating since they believe that
integration costs will rise with increased market penetration and eventually make it unprofitable to develop
more wind projects.
Hayman encouraged participants to consider ways of addressing the disaggregation concern and to
forward their suggestions to her to compile and send out prior to the next workshop. If she receives no
suggestions, then she will consider this issue tabled until the participants are ready to discuss it again.
ISSUE 5: DEFINITION OF "FIRM
5. What is the definition of firm for purposes of entitlement to published rates?
Between this and the last workshop, Peter Richardson, Exergy, attempted to define "firm." After an
unsuccessful attempt, he recognized that it was not productive to define the term at this point. Richardson
said that one product of the integration study will be an understanding of the concept. Hayman suggested
tabling issue 5 until it was relevant. Participants approved that action.
Summary of the October 14, 2005, Workshop
Phase 2 of Case No. IPC-05-Wind Energy Workshop
ISSUE 2.1: AVOIDED-COST RATE METHODOLOGIES
ls it discriminatory and/or illegal to set avoided cost rates for wind resources using a methodology
different from that used for other resources?
Hayman reminded participants that issue 2.1 had originally been tabled, but Richardson offered to write a
legal brief about the issue and circulate it. Based on his reading of PURPA and FERC cases, he believed
that methodology set by a state PUC is applicable to all QFs, regardless of motive force. Therefore,
setting a published rate specific to wind is a violation of PURPA. Staff commented that the Commission
has been very careful about saying "intermittent" rather than .wind." This workshop series is tasked with
the issue of intermittency, but wind is the most intermittent so it provides the context for the meetings.
Hayman said that, if participants agreed that the methodology is the same, this workshop series could
look specifically at integration costs for wind, with the understanding that outcomes might inform
exercises for other resources. The participants agreed to this approach. Richardson and the rest of the
participants further agreed that it was not necessary to include Richardson s brief in the workshop
summary.
ISSUE 3: PUBLISHED RATES AVAilABILITY
3. Should the availability of published rates be limited to ensure that some portion of total wind
resource acquisitions come from RFPs? If so, how?
At the previous workshop, Richardson had also agreed to address the legal aspects of this issue. He did
not believe that the availability of published rates could be limited and suggested eliminating this issue as
well. One participant asked whether caps were appropriate for coal. Since they are not, they would also
be inappropriate for wind. Kline pointed out that there was no mandatory obligation to purchase coal so
the issue wasn t the same. Mike Heckler reiterated a point that he had made previously in the meeting:
integration costs rise with penetration , so at some point, developers will get to a net load price that is no
longer reasonable. In essence, he believes the market is self-regulating. Others suggested that a cap
might be appropriate in the interim. Already, projects that looked profitable six months ago are "dropping
off.
Hayman suggested rephrasing the issue to "Could the availability of published rates be limited in the
interim?" The RFP component was dropped , but people were initially conflicted about the meaning of
interim" and whether "in the interim" should be added. Ultimately, the interim period was defined as the
time between now and when the Commission issues an order (after results of the integration study are
available ).
PROCESS FOR HANDLING SETTLEMENT PROPOSALS
Hayman reminded participants that Bill Eddie, Advocates for the West, had developed a settlement
proposal before the September 20 workshop. At that time, the agenda didn t allow time to discuss that
proposal, but Kline had suggested setting aside one meeting to discuss potential settlement agreements.
She asked participants to come up with a process for handling settlement proposals, cautioning them to
allow enough time to discuss the issues to the level that they are not making hasty decisions. Woodbury
wondered what issues could be settled. Others asked whether the Commission is willing to entertain
settlement proposals. Although the Commission asked for a report and recommendations, there is a
procedure to go through before any settlement. Participants decided to schedule two days for discussion
of settlement proposals, at least for interim solutions. Day 1 would be for sharing draft proposals and
using them to develop issues suitable for settlement. Between days 1 and 2, people could read the drafts
carefully so that Day 2 was dedicated to the finer points of the proposals.
Summary of the October 14 2005, Workshop
Phase 2 of Case No. IPC-05-Wind Energy Workshop
NEXT STEPS
Hayman displayed bin items that she had been recording throughout the workshop, commenting that
several of the items essentially set up the agenda for the next meeting. Participants are to bring proposals
to reach interim solutions for settlement to the next workshop to share. These proposals , or the exercise
of developing them, may inform which issues are suitable for settlement.
Several participants wondered whether study results would be available outside the company, and
whether Idaho Power would consider adding other components suggested in the morning session. Idaho
Power raised the question of how additions to the study design would be funded. Ric Gale, Idaho Power
said that company participants would meet before the next workshop and bring answers to those
questions back to this group. Several people are interested in finding out more about the model.
Bokenkamp said that information about the Aurora model is available on the Internet. One suggestion
was to have Bokenkamp talk more about the model at the next meeting. If it was the first item , those who
are interested could come, while others arrived for the second item. Hayman will speak with the workshop
coordinators about this possibility.
The next workshop is set for November 18 (serving also as Day 1 of the settlement proposal process),
while Day 2 of the process is tentatively set for December 2. Bokenkamp mentioned that the first meeting
of the IRP Advisory Council is Thursday, October 20, at the Owyhee Plaza (1:00 p.). It is open to the
public.
Summary ofthe October 2005, Workshop
ApPENDIX 1-PARTICIPANTS
(Shading indicates people who did not participate in person or by phone.
Name and Affiliation
Mark Ahlstrom, WindLogics
Randy Allphin, Idaho Power
JebAllred, Idaho Power
Bilt Batt, Batt and Fisher ,
D~ive Bergh,Elrnot~;C()uri:WAgfiPI1Sir)€1S~ '
Kart Bokenkamp, Idaho Power
' Di:!a,"Brockbank Pa~ffi$Corp.
James Carkulis, Exergy
' ,
Dor)Dgskelarid, VV'inclliill1d
Armand Ecker
, '
Magj~Witid ,c c
Bill Eddie, Advocates for the West
Gerald Fleischman, IDWR-Energy Division
Troy Gagliano,Renew~ble'Northwe$t'Project
Ric Gale, Idaho Power
James Gall;Avista
Mary Godwln Advocates 'for lheWest
Bruce Griswold, PacifiCorp
Jared Grover, Cassia Wind
John Hanson
John Hammond, Jr., Battand Fisher
Mike Heckler, Windland
J. Humphries, B.R.E., Inc.
Glenn Ikemoto, Energy Vision
Brian Jackson, Renaissance Engineering & Design
Name and Affiliation
LeRoy' Jarolimek 'Wil'JdAcivantage
Clint Kalich, Avista
Bart Kline, Idaho Power
, BbbLafferty,Avista
Bob LiveIY;Ha~1fiC()rp
Randy Lobb, IPUC
David Meyer, Avista
Jim Miller, Idaho Power
Joe Miller; Mc:DeYitt& Miller
Ken Miller, NW Energy Coalition
M b hicaMoen, I dahoPowet
Tom Noll, Id!ihoPower
Lisa Nordstrom, PacifiCorp
Rich Rayhill, Ridgeline Energy
Peter Richardson, Exergy
Gary Seifert, Idaho National Laboratory"
John Steiner, Idaho Wind
Rick Sterling, IPUC
Richard Stoito;Avista
Blair Strong, Paine Hamblen
John Wirt
Scott Woodbury, IPUC
Mike Youngblood , Idaho Power
a Participated via conference call
Summary of the October 14,2005, Workshop
Phase 2 of Case No. IPC-05-Wind Energy Workshop
ApPENDIX 2-AGENDA
WlND/QF WORKSHOP #3 (Case No, IPC-E-O5-22)
October 14, 2005
9:30am-4:00pm
Conference Room 6 East
Idaho Power Corporate Headquarters
Boise, Idaho
Objectives:
1) Recap recent Commission Orders
2) Discuss the proposed integration study, study components and design
3) Discuss and identify areas of agreement for Issues 4 and 5
4) Review the legal perspective for Issues 2.1 and 3
5) Determine the process for handling settlement proposals
Agenda
(Breaks taken as needed)
Time Topic Process
9:00am
9:30am
9:45am
1 0:00am
11 :30am
12:45pm
CoffeelTea available in meeting room
Welcome, Introductions and Meeting Overview- Susan Hayman Information
Recap of Recent Commission Orders IPue Staff Information, discussion
Integration Study
Consultant introduction -Idaho Power
Study components
Study design
Access to study informationlresults
Benefits of wind energy offsetting integration costs - WInd/OF
Developer
Information, discussion
Lunch (on your own)
Issue 4: Project Configuration
Strawman lXoposal for resolving utility concerns with wind developers
configuring large QF projects into smaller projects to qualify for
published rates Idaho Power
Information, discussion,
Parties decision
Summary of the October 2005, Workshop
Phase 2 of Case No. IPC-05-Wind Energy Workshop
Agenda (confd)
1: 45pm Information, discussion
Parties decision
2:15pm
2: 45pm
3:15pm
3:30pm
3:45pm
4:00pm
Issue 5: Defining "Rnn
Proposed defin~ion - Peter Richardron
Issue 2.1: Avoided Cost Rate Methodologies
Legal perspective on setting avoided cost rates for wind resources
using methodology that differs from other resources - Peter
Richardson
Information, discussion
Issue 3: Published Rates Availabiljfv Information, discussion
Legal perspective on the ability to limit the availability of published rates
Peter Richardron
Process for handling Settlement Proposals
Next Steps
Workshop schedule
Agenda items for next workshop
Wrap.Up and Evaluation - Susan Hayman
Adjourn
Discussion
Information, discussion
gro~ decision
Discussion
Summary of the October 2005, Workshop