20140528Transcript I.pdf

ORIGINAL
BEFORE THE ]DAHO PUBLIC UT]LITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANYIS PET]TION TO
TEMPORARILY SUSPEND ITS PURPA
OBLIGATION TO PURCHASE ENERGY
GENERATED BY SOLAR-POWERED
QUALIFY]NG FACILITIES (QFS) .
CASE NO. IPC-E-14-09
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PLACE:
DATE:
BEFORE
COMMISSIONER MARSHA SMITH (Presiding)
COMMISSIONER PAUL KJELLANDER
COMMISSIONER MACK REDFORD
Commission Hearing Room
412 West Washington Street
Boise, Idaho
Nlay 21, 201,4
VOLUMEI-Pagesl-54
CSB REPORTING
Constance S. Bucy, CSRNo. 187
23876 Applewood Way * Wilder, Idaho 83676
(208) 890-s198
Email csb@heritagewifi .com
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APPEARANCES
Eor the Staff:Kristine Sasser, Esq.
Deputy Attorney General-
4'72 West Washington Street
Boise, Idaho 83120-0074
APPEARANCES
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]NDEX
WITNESS EXAMINAT]ON BY
Courtney White Statement
( Public )
Robert Spencer Statement
( Public )
PAGE
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Leif Elgethun
( Public )
Ke11ey Dagley
( Publ j-c )
Al-an Hausrath
( Public )
John Weber
( Public)
David Monsees
( PubIic)
Statement
Commissioner Smith
Commissloner Kj ellander
Statement
Statement
StatementAdditional Statement
Statement
Reed Burkhol-der Statement
( Public)
Jesse Simpson Statement
( Public)
Michael- Richardson Statement
( Public )
Robert Sandberg Statement
( Public )
Whitney Byrd Statement
( Public )
Robert A. Paul Statement 42
(Publ-ic) Commissioner Kjellander 45
Lisa Hecht Statement 41
(Publ-ic)
INDEX
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BOI SE IDAHO WEDNESDAY MAY 27 20r4 6:00 P. M.
COMMISSIONER SMITH: Welcome, ladies and
gentlemen. Thls is the time and place set for a public
hearing before the Idaho Public Utilities Commissj-on in
Case No. IPC-E-74-09, further identified as in the matter
of Idaho Power Companyrs petition to temporarily suspend
its PURPA obligation to purchase, I think thatrs, energy
generated by solar-powered qualifying facilities.
My name is Marsha Smith and I'm one of the
three Commissioners and f 'l-l- be chairing tonight's
hearing. On my left is Commissioner Kjellander who is
al-so president of the Commj-ssion, and on my right is
Commissioner Mack Redford and the three of us are the
Publ-ic Utilities Commission.
We're pleased to have you here tonight.
Werre accepting public comments on the issue and the
narrow questions of whether the Commission shoul-d
immediately i-ssue an order temporarily suspending Idaho
Power's obligation under PURPA to enter into contracts to
purchase energy generated by qual-ifying solar-powered QFs
or, alternatively, whether the Commission should issue an
order directing ldaho Power to include an appropriate
solar integration charge in PURPA contracts with solar
CSB REPORT]NG(208) 890-s198
COLLOQUY
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QEs.
As you might i-magine, there's considerabl-e
interest in integration charges for these type of
projects. This is not the time and place where the
Commission will- be considering that. We're wai-ting f or
Idaho Power's study and then there will be a case on
whatever they propose or find or dor so tonight we just
ask you to limit your comments to the two issues whlch I
just mentioned, and wlth that, I have a l-ist of people
who wish to be heard, starting wlth Courtney White.
If you're unfamiliar with our process,
when I cal-I your name, you just come forward.
Commissioner Kjellander will- ask you to raise your right
hand and promise to tel-l- us the truth, and then our Staff
attorney, Ms. Kristine Sasser, will ask you a few
questions, l-ike your name and address to identify
yourself on the record.
Because the Commission's decisions must be
based on evidence in the record, we have a court reporter
here tonight who will take down everythlng that is said
by those who comment. Because we have a court reporter,
only one person can speak at a time and that is the
person who is sitting in the witness chair or me or maybe
one of the other Commissioners if they have questions, so
that's our process and, Ms. White, werre glad you're
COLLOQUY
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here.
COURTNEY WHITE,
appearing as a public witness, having been fi-rst duly
sworn, testif ied as fol-l-ows:
EXAMINAT]ON
BY MS. SASSER:
O If you wil-I please state your name and
spell your last name for the record.
A Certainly. Courtney White, last name
W-h-i-t-e.
a And your resident address?
A 1518 Knights Drive, that's K-n-1-g-h-t-s,
Boise, Idaho, 83172.
O Thank you, and are you a customer of Idaho
Power.
A Yes, I am.
O Thank you.
A I'm here this evening just to make one
point. The growth in sol-ar technoJ-ogy is not a surprise.
The petition before the PUC is based on the presumption
that Idaho Power has not had sufficient time to manage
the increase in applicatj-ons. From my perspective, that
WHITE
Publ-ic
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is not true. The Company has had years of visibility due
to the growing attractiveness of solar and if the Company
is unprepared to respond to that growth in sol-ar purchase
applicatj-ons, that is a result of choices made by Idaho
Power, and the people applying for purchase agreements
should not be forced to bear the cost of choices made by
Idaho Power.
Like Idaho Power Company, companies in a
free rnarket often monitor trends and plan for the future.
If the Company chooses the wait and see approach to
anticipate changes, the Company doesn't get to tel-l- other
players in the market to shut down and wait for further
notice. The growth in solar applications was widely
expected and I ask that the PUC please recognize that
Idaho Power has had sufficient time to plan and,
therefore, Idaho Power's petition for a moratorium should
be denied.
COMMISSIONER SMITH: Thank you, Ms. White.
Let's see the if the Commissioners have questions for
you. We appreciate your coming tonight.
THE WITNESS: Thank you.
(The wltness left the stand. )
COMMISSIONER SMITH: Robert Spencer.
WHITE
Public
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ROBERT SPENCER,
appearing as a publ-ic witness, having been first duly
sworn, testj-fj-ed as fol-lows:
EXAMINATTON
BY MS. SASSER:
O Good evening.
A Good evening.
O Pl-ease state your name and speI1 your l-ast
name.
A Robert Spencer, S-p-e-n-c-e-r.
0 Thank you, and your resident address?
A 755 East State Street in Eag1e.
O And are you a customer of Idaho Power?
A Yes.
O Thank you. Pl-ease proceed.
A Irve been invo1ved in studying a f ittl-e
bit about this sofar energy and have found that it seems
Idaho Power has spent a great deal- of time not studying
this and that they coul-d spend some time studying it but
not at the loss of the growing of sol-ar power at the same
time. I would I feel like it's not appropriate to put
that on hold whil-e the time comes for them to make some
decisions. The study and the continuing of the growth of
SPENCER
Public
solar power can continue at the same time side by side
and do not have to be separated out.
COMMISSIONER SMITH: Thank you, sir. Are
there any questions? Appreciate your coming.
(The witness left the stand. )
COMMISSIONER SMITH: Leif do you want
to say your name for me?
THE WITNESS: Elgethun.
COMMISSTONER SMITH: Elgethun?
LEIF ELGETHUN,
appearing as a public witness, havJ-ng been duly sworn,
was examined and testif ied as f ol-lows:
EXAM]NATION
BY MS. SASSER:
O State your name and please spelI your l-ast
name for the record.
A Leif Elgethun, E-I-g-e-t-h-u-n.
O Thank you, and your resident address?
A 1827 Gorley, Boise, Idaho, 83705.
O Are you a customer of Idaho Power?
A Yes, I am.
0 Thank you.
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ELGETHUN
Public
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A I'm here representing Sunergy World. We
are one of the developers that has a project in front of
Idaho Power with a draft contract as noted in Randy
Alfin's testimony. We've been developing two projects in
southern Idaho' s terr j-tory on public l-and owned by two
Iarge municipalities totaling about 80 megawatts, with a
national pipeline of 300 megawatts. Our agreements with
the municipallties include lease payments to the city,
will provide new jobs, economic activity, new
manufacturing, and will help the municipalltles meet
their sustainabfe goals as they retain the project's
renewable energy credlts.
I want to touch on three main points
today, but to start off with, I wanted to start by saying
we do recommend that the Commission deny both requests by
Idaho Power. The three things we're going to touch on
are good faith efforts by Tdaho Power, the j-ndustry
success rate for solar development, and on the
alternative charge, f want to touch on the take-out
financing partners that we have and their interest in the
type of integration charge that the Commission may
implement as an alternate to suspending the obligation of
Idaho Power to purchase solar power.
The first is good faith efforts. Sunergy
World has been negotiating with Idaho Power in good faith
ELGETHUN
Publlc
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towards a contract execution. We were following the
process set forth by the PUC using the IRP methodology to
determine the rates that we wou1d be paid. We had an
agreement that we felt we could execute at the tlme Idaho
Power issued their request to suspend their obligation.
Idaho Power did not notify us that they were going to
make this request and had indicated that they were acting
in good faith to get our contract executed. Erom our
perspective, Idaho Power did not act in good faith and
pulled the rug out from under us with this filing. It is
not good faith for fdaho Power to tel-I us they're acting
in good faith, tell the PUC they agree with a pricing
methodology, and then pull the plug as soon as folks
start using the agreed-upon process. This 1s one reason
the temporary suspension should not be granted.
The second point f want to make is in
rel-ation to their threat of it being an lmminent problem.
The industry success rate is something that we want to
touch on. We have been in the renewable energy and in
particular sofar development for over five years. The
industry has seen its share of successes and failures and
the success rate for projecLs at different stages of
development is pretty well known. The leading sofar
project finance software company, Mercatus, has had over
60 gigawatts of solar deal-s entered into their software
ELGETHUN
Public
system, alI by large multinational, established
developers, the kind of guy that can get things done.
The overall- success rate for projects
entered into their tool is under one percent, with
variabil-ity between the different developers ranging from
. 5 percent to 1- percent. This transl-ates to an estimated
project size, completed project size, of only 5 megawatts
of the 501 megawatts identified by Randy Alfin's
testimony. However, the success of projects does
increase as projects get further along in the entitlement
process. The industry sees a success rate for projects
with an executed PPA, completed interconnection study,
and land lease of approximately 20 to 40 percent.
Idaho Power has identified 60 megawatts of
prolects that are under contract currently, which if they
had the land lease and an interconnection study completed
woul-d lead to an estimate of onJ-y 12 megawatts in proj ect
completion, 12 to 24 megawatts in project completion.
Our current portfolio-wide estimate is 17.5 percent
completion, which if applled to the 80 megawatts that we
have would result in about 20 megawatts of t.otal- projects
completed. This is rea11ty, based on a much larger
demographic than Idaho Power's territory and is more
indicative of the rel-ative threat to the ratepayers.
Thus, the imminent threat is not as great as Idaho Power
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ELGETHUN
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ELGETHUN
Publ-ic
indicates it to be.
The third point we want to make is in
relatj-on to the take-out financing and a potential
integration charge. Take-out financing partners are what
makes or breaks a project. The contracts in place for
projects have to have certaj-n elements for a take-out
financing partner to step up and pay for the project. Of
course, they need rates that will make for a profitable
project. However, the industry has currently moved to
extremely 1ow profit margins in the range of 7-9 percent
interna1 rate of return which requires extremely safe
investments. No take-out partner will accept a contract
does not have known rates and known costs. We are not
against integration costs, tf they're priced fairly, and
are part of an inclusive cost-benefit study. However, we
cannot accept an integration cost that is not known or
can be changed in the future as no take-out financing
partner wil-l- buy a project with a PPA that has that risk.
Therefore, we ask the PUC to only consider
interim integration costs that are known and fixed when a
contract is executed. The Commission did ask that the
integration cost methodology and amount not be part of
the discussion, but we feel that since fdaho Power has
thrown out a number that has no technicaf merit, $6.50
per megawatt-hour, we deserve the chance to provide a
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ELGETHUN
Public
more realistic suggestion. It is our belief that fdaho
Power has the capacity to integrate a certain amount of
solar with no increased cost to their customers, and we
bel-ieve that number is to be somewhere around 250
megawatts.
We befleve the integration cost should be
zero for contracts executed up to that amount. We
bel-ieve projects signed after that threshold should
include a number that is significantly lower than Idaho
Power's $6.50 a megawatt-hour and thereafter until Idaho
Power can complete the lntegration study.
For the record, we're recommending the
Commission should deny both of Idaho Power's requests
until- the completion of Idaho Power's integration study.
Alternately, if the PUC decides to lmplement an interim
lntegration cost, it should specifically j-nstruct Idaho
Power as to what will it be and we recommend it should be
zero for the first 250 megawatts of projects at the very
least and thereafter it should be at a much l-over number
than Idaho Power suggested at $6.50 a megawatt-hour.
With that, I concl-ude my testimony.
COMMISSIONER SMITH: So f have a question.
Do you have questions?
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ELGBTHUN (Com)
Publ-ic
EXAMINAT]ON
BY COMM]SSIONER SMITH:
O So my first question f was going to ask
you would have gone something like did you expect to
incl-ude an integratj-on charge in your IRP negotiated
contract ?
A Absolutely not. Idaho Power did not
indicate that that wou1d be something we would have to
negotiate.
0 So is this your first experience with
negotiating a contract, a PURPA contract?
A We had a draft contract with Idaho Power
in our hands, still do, that did not include an
integration charge. This would be an additional thing
that has been added that they have not indicated they
would add at any point in our negotiation.
O Were you aware that a couple of years ago
in considering another solar project the Commission
thought there shoul-d be integration charges, but we were
unwilling to, you know, pick a number out of the air?
A Yes, and that's why we indicated that we
are not agalnst integration charges in general. However,
in this case, Idaho Power did not indicate they were
going to request an integration charge in our
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13 ELGETHUN (Com)
Public
negoti-ations and at this point we feel- it is an
additional poi-nt that they did not bring up previously.
O WeI1, I understand your position that you
believe the appropriate charge is zero at the current
time, but just in general, do you think that in the
process of negotiating a contract, do you think that the
integration charge is something that can be negotiated
between the utility and a developer, because it seems to
me that based on your project location, what facll-ities
are there, how big it is, and al-I those other factors
that you might have a different integration charge for
one project as opposed to another?
A Yes, we do believe that there can be an
integration charge associated with projects, as my
testimony indicated. At this point there isn't the data
to support what that might be, but we do understand that
could be the case.
COMMISSfONER SMITH: Okay. Thank you, I
appreciate it. Commissioner Kjellander.
EXAMINATION
BY COMMISSIONER KJELLANDER:
Were you aware that Idaho
process of undergoing the steps necessary
Power was in the
to put together
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ELGETHUN (Com)
PubIic
an integration study for solar?
A Yes, we were.
O What did you anticipate that the purpose
for that was 1f it wasnrt to be inc]uded in contract
discussions for sol-ar PPA's?
A We would expect that that charge woul-d be
lncl-uded. At this current point in time we are not aware
of any industry pJ-ayers that are a part of that process.
We believe it could be biased as the people that are
participating as a technical resource commj-ttee were
handpicked by Idaho Power to serve on it. We think that
that j-ntegration charge could range al-l- the way from a
negative number up to potentially $10.00 a megawatt-hour,
depending on the }ocation, the current resource mix. We
have no idea what that could be, but it is something that
we acknowledge is a potential cost.
O And you're aware that when that
integration study is put together you'11 get a chance to
weigh in? That said, though, Iet's go back to your
knowledge of that integration study. Do you have any
idea how J-ong that's been golng on? And what Irm getting
at so that there's big I got you suspense because there
is none, has it been going on too long in your opinion?
A Yes. We actually have done a little bit
of digging to see exactly what the process has been from
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ELGETHUN (Com)
PubIic
the perspective of the people on the TRC and it appears
that the process started for them August of last year,
which is now pushing approximately nine months, and it
appears that there's stlll- some time to go for that to be
concluded, and in the role of the developer, we need
certainty more than we need anything and at this point we
are in an extremel-y vufnerable position of having a l-ot
of outlay without any certainties, so we were aware of
it. We've been watching it and waiting for it and we did
not rush to get contracts done. Werre going through the
normal process and trying to be good negotiators in that
process.
O In your opinion, nine months should have
been enough to get something together?
A I think it's enough time to get some type
of a draft together to give us an idea of what we shou1d
be planning for, yes.
COMMISSIONER KJELLANDER: Thank you.
COMMISSIONER SMITH: Thank you, Mr.
Elgethun?
THE WITNESS: Elgethun.
COMMISSIONER SMITH: Elgethun.
THE WITNESS: Yeah.
COMMISSIONER SMITH: Thank you very much,
appreciate your testimony.
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DAGLEY
Publ-ic
(The witness left the stand. )
COMMISSIONER SMITH: Kelly Dagley.
KELLEY DAGLEY,
appearing as a public witness, having been duly sworn,
was examined and testified as follows:
EXAMINATION
BY MS. SASSER:
O Could you please state your name and
speJ-I your l-ast name for the record?
A Ke1Iey Dagley, D-a-g-1-e-y.
O And your address?
A 30 Pine Cone Way, Boise, Idaho, 837L6.
a And are you a customer of Idaho Power?
A Yes, I am.
O Thank you. Go ahead.
A Hi, Irm Ke11ey Dagley. I own a 25
kilowatt solar array in Boise County and have a physics
degree from UC Berkeley to teach a solar course at BSU.
I looked at seven years of aggregate hourly demand data
filed with the Federal- Energy Regulatory Commission, and
in one out of every 40 hours, Idaho Power ramped
electricity faster than 200 megawatts per hour. This is
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DAGLEY
Public
fike bringing on or off line 10 megawatts of solar every
three minutes. Even a preliminary look shows that many
megawatts of solar would hardly rise above that that
many -recommended watts of sol-ar would hardly rise above
the noise of a typical demand day.
There is no need to suspend contracts or
ask for expedited rel-ief to a problem that simply doesn't
exist. It takes tlme to build these systems and many
proposals won't succeed. If as suggested by Idaho Power
we brought 500 megawatts on line this year, we wou1d rank
No. 2 tn the nation, dD unlikely scenario, ds this is
more than the combined total- installed by 40 of our
United States in 2013, and while we have a great solar
resource, the pricing and politics in Idaho make this one
of the most challenging sites.
An integration cost study is only a small-
part of sol-ar value. Tnsertlng a kill switch with an
unknown trigger into future contracts is a bad idea,
unless the lntention is to prevent competition with a
monopoly. Idaho Power cannot dangle a sol-ar regulatory
framework for years and then moments before i-t may see
its first use retract it. Technofogy and regulation
evol-ve with time. One can't suspend the future waiting
to figure it out. Thank you.
COMMISSIONER SMITH: Thank you. Let's see
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HAUSRATH
Public
if there are any questions. Nor I. We appreciate your
attendance.
(The witness left the stand. )
COMMISSIONER SMITH: Al-an Hausrath.
ALAN HAUSRATH,
appearing as a public witness, having been first duly
sworn, testified as follows:
EXAMINATION
BY MS. SASSER:
O Good evening. Coul-d you please state your
name and spe11 your last name for the record?
A My name is Al-an Hausrath and f 'm actually
going to spell both because the first one is ambiguous.
Irm the A-I-a-n kind and my l-ast name is H-a-u-s-r-a-t-h.
O Thank you, and your resident address,
s ir?
A 1820 North 7th Street in Boise, Idaho,
831 02 .
O And are you a customer of Idaho Power?
A f am both a customer and a shareholder,
yes -
O Thank you. P1ease proceed.
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CSB REPORT]NG
(208 ) 890-s198
HAUSRATH
Publ-ic
A Good evening, members of the fdaho Public
Util-ities Commission. Thank you for the opportunity to
testify on Idaho Power Companyrs request to temporarily
suspend its obligation under PURPA to sign new contracts
to buy power from qualifying smal1 sol-ar power producers.
That's quite a sentence.
I have several concerns with Idaho Power's
petition and the first one is a genuine question, I don't
know the answer to it, and that is can a state public
utilities commission actually grant an exemption to a
federal law.I don't know.
COMMISSIONER SMITH: It's a good question.
THE WITNESS: And I hope you'11 get good
advice on that one. If it can, I urge you not to grant
this request from Idaho Power because it seems to me that
it's unnecessary. Irm not a contract lawyer, but I donrt
understand why they can't work these issues out in
individual contracts going forward. Obviously, I don't
feel that they shoul-d be able to readjust contracts that
are already out there.
Another concern that I have is that if the
petition is granted, it seems to me that it wil-l-
introduce a lot of uncertainty to our solar industry.
Investors may go elsewhere and Idaho will have a hard
time. I was just at my nephew's wedding in Vermont and
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we traveled afl the way through New Jersey at the same
time and there are panels al-l- over the p1ace. We don't
have very much in Idaho compared to what they have in
some states where it's not favorable and I don't think we
should do anything to actually end up having l-essr So I
bel-ieve that uncertainty would be dangerous for forward
movement.
I have a question. If Idaho Power needs
to estimate the cost of solar integration, why reinvent
the wheel. f was looking this afternoon at a two-part
report from the National Renewable Energy Laboratory and
they studied the technical and financial aspects of sol-ar
and wind. They mixed the two together at about the 33
percent level-. That's much higher than Idaho Power's
11ke1y to achieve in the foreseeable future. One of
their major flndings is that the fuel savings beneflt per
megawatt from i-ntroducing solar and wind is several-
orders of magnltude greater than the cost due to
increased generator cycling per megawatt of introduced
sol-ar and wind, so 1t seems to me that based on that
study, net solar integration costs may very wel-l- be
negative because there might not even be a problem here
or maybe I misunderstood the study.
Whether or not the petition 1s granted, I
urge the Commisslon to play a major rol-e in Idaho Power's
CSB REPORTING
(208 ) 890-s198
HAUSRATH
Public
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CSB REPORTING
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HAUSRATH
Public
sofar integration study. I hope the Commission Staff
wil-l be deeply j-nvol-ved and I hope that the Commission
wil-l ensure that the study is fair, transparent, and
complete so that lt can be believabl-e when finished. I
know we get to talk about it after it's done, but i-t's
much better that it be directed from the beginning. I
urge you to direct Idaho Power to completely reveal its
methodology and assumptions before any computer
simulations are run and conclusions drawn, and a sol-ar
i-ntegration study should obviousl-y examine benefits as
wel-l as costs, and i-n my estimation, costs should not be
charged to developers if the benefits are retalned by
Idaho Power. It seems to me this has to work both ways,
and then finally, as a citizen of ldaho, I have to say
I'm a l-ittle blt concerned that Idaho Power can use
perhaps an imaginary emergency to obtain an expedited
process that caused us al-I to be here after only two days
of notification. I realize you have to do that under
your rules, but it worries mer So thank you for the
opportunity to comment.
COMMISSIONER SMITH: Thank you. Let's see
if there are questions. None for me. Thank you very
much.
(The witness left the stand. )
COMMISSIONER SMITH: John Weber
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CSB REPORTING(208) 890-s198
WEBER
Publ-ic
JOHN WBBER,
appearing as a public witness, having been duly sworn,
was examined and testif ied as fo]lows:
EXAMINATION
BY MS. SASSER:
O Please state your name and spelI your last
name for the record.
A John Weber, W-e-b-e-r.
O And your resident address?
A 7855 West Hummel Drive, Boise, Idaho,
83709.
O Are you a customer of Idaho Power?
A Yes, f am.
O Thank you.
A Thank you for holding this public meeting,
Commissioners, I appreciate the opportunity to comment.
I'm going to focus on the two things that the Order
stated a couple of days ago. The first thing, fry comment
is Do, I don't think the number one question should be
granted. Idaho Power has not shown that irreparable harm
to customers woul-d happen without the Commissi-on issuing
an order to temporarily suspend PURPA sol-ar contracts.
On page 3 of Alfin's testimony states that
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CSB REPORTING
(208 ) 890-s198
WEBER
Public
six Oregon projects have fu11y executed power purchase
agreements with Idaho Power for a total- of only 1,6
megawatts of nameplate capacity. The actual- annual
average megawatts generated wil-l- be much less than the
nameplate capaclty. For this smal1 amount of additional
generation, i-t's very unlikely any integration costs will
be borne even if all the projects were built.
A power purchase agreement is just the
beginning of getting a solar project. fnvestment capital
and/or financing will have to be found. This could be a
difficult process and the success rate is not high. That
being said, it is possible none of the projects wil-l come
into being. Page 4 of the Alphin's testimony uses cost
numbers assuming a cost equal to that of wind lntegration
at 6.50.
Page 9 of Devol's testimony states they
have no estimated integration costs at this time. These
two testimoni-es seem to contradict each other. I would
guess the solar integration costs wil,l be much l-ess than
the wind integration costs. On page 9 or page 8 of
Devof 's testimony, he states the resul-ts coul-d be as
early as mid June, but left the complete date open-ended
so nobody knows how long it will take to get the results.
Due to the uncertainty of the results,
many jobs could be l-ost as developers go elsewhere where
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CSB REPORTING(208) 890-s198
WEBER
Public
there is more certaj-nty, and l-ast ni-ght I actually
watched a Utube video from Governor Otter talking about
how the sunshine is just ralni-ng jobs on Idaho for solar
energy development. I forwarded that to Gene Fadness and
I think he would be happy to share it with you, so it
seems like Idaho Power is kind of putting thls umbrella
up over all these jobs that are supposedly the sun
shining on Idaho.
No. 2 I al-so don't agree with, so my
comments are oo, the Commlssion should not approve that
as wel-l-. At this time the amount of signed projects is
so small that there shoul-d be no solar integration
charges. If in the future more sofar PURPA projects are
signed and get built, more information wil-l- be gathered
and known about what the actual integration costs are, if
any. At this future time real numbers will be available
to figure real costs and these can be added to new
contracts. Thank you f or your t j-me.
COMMISSIONER SMITH: We appreciate your
testimony. Are there any questions? Thank you very
much.
(The witness left the stand. )
COMMISSIONER SMITH: David Monsees.
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CSB REPORTING(208) 890-s1e8
25 MONSEES
Public
DAVID MONSEES,
appeari-ng as a public witness, havlng been duly sworn,
was examined and testified as foll-ows:
EXAMINATION
BY MS. SASSER:
O Coul-d you please state your name and speII
your l-ast name for the record?
A Yes, f'm Dr. David Monsees. My last name
is spelled M-o-n-s-e-e-s.
O Thank you, and your resident address,
Doctor?
A 7341 Parkhil-l-, that's one word, Drive in
Boise, 83102.
O And are you a customer of Idaho Power?
A Yes, I am. The billing comes through my
partner's name, though.
0 Thank you. Pl-ease proceed.
A Okay. I wil-l- not repeat what the prior
people have saj-d, all- of which I feel are valid points,
and I agree with them that the request from Idaho Power
should be denied. Idaho Power has had a long history of
obfuscation and deIay, and I see this expedited process
as being more of the same, because what they do 1s they
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CSB REPORT]NG
( 208 ) 8 90-s1 98
MONSEES
Public
impose on the PUC last-minute lmportant decisions that
need to be made when they have been dragging their feet
for a long time.
I do not have any sense that the solar
integration study will be a val-id or accurate one based
on many meetings that I've attended of their IRPAC
committee. When they don't like the answer at Idaho
Power, they deny changes that the committee members
request, just as they decided that a Lrue independent
review of the last IRP report shou1d be l-ooked at by an
outside committee and they did not do that, but they said
they had, but that was a small other study.
They reaIly can't be trusted, so I urge
the PUC to l-ook wlth open eyes and take an up-front
stance in requesting what has been asked for before, that
there be a clear indication of what the assumptions and
what the data are that go into simulation studies,
because if you don't have that, you don't know what you
have, and for too long Idaho Power has played this game
of delay; meanwhile, the heal-th of Idahoans is being hurt
by the emissions from the coal-powered plants that drift
over. If you eat flsh that you catch in southern Idaho,
that fish has hi-gh mercury fevel-s caused by their North
Valmy plant and you'd be crazy Lo eat them.
Thank you
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(208 ) 890-s198
BURKHOLDER
PubIic
COMMISSIONER SMITH: Thank you, sir.
Let's see, dny questions? Thank you very much.
THE WITNESS: Thank you.
(The witness left the stand. )
COMMISSIONER SMITH: Reed Burkhofder.
REED BURKHOLDER,
appearing as a public witness, having been duly sworn,
was examined and testified as follows:
EXAMINATION
BY MS. SASSER:
O Please state your name and spelI your last
name for the record.
A My name is Reed Burkholder, spelled
B-u- r- k-h-o- I-d-e-r .
0 And your resident address?
A 6105 Twin Springs Dr j-ve, BoJ-se, 83709.
O And are you a customer of Idaho Power?
A Iam.
O Thank you.
A We are i-n an international crisis of
climate change caused by people who burn fossil- fuels and
fdaho Power is part of this problem. They burn coal at
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Jim Bridger, Valmy, and Boardman, and natural gas at
Langley Gu1ch, Danskin, and Bennett Mountain. Idaho
Power refuses to become part of the solution. Instead,
they continue to be unrepentant polluters of our common
atmosphere and they continue to throw up roadbfocks and
delays to solar developers. f consider this unacceptable
behavior.
We want clean, cheap sol-ar. We want it
now, not after some sol-ar integration study that may or
may not be finished in four weeks, so no, the Commission
should not immediately issue an order to suspend Idaho
Power's obligation under PURPA and they should reject
both of Idaho Power's requests.
f cal-cul-ated the cost per month to Idaho
Power's roughly 500,000 customers of sol-ar integration
costs of $6.50 per megawatt-hour for 501 megawatts of
solar spread over 20 years and the cost per customer is
about $7.21 per month, and this cost will- be much l-ess if
any of the 31 solar projects are not built. Based upon
what I've heard tonight, thatrs a high fikelihood that
501 megawatts 1s super unl-ikeIy, and the costs will- be
less than 7.27 per month if the i-ntegration charge is
less than $6.50 per megawatt-hour, which is entirely
possible given the resul-ts of new studies in solar
integration costs by the International Energy Agency and
CSB REPORTING
(208 ) 890-s198
BURKHOLDER
Public
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CSB REPORTING
(208 ) 890-s1e8
SIMPSON
Pubfic
the National Renewable Energy Lab.
These studies outline scenari-os where
sofar integration costs may be zero. There is little
reason to delay PURPA solar contracts and every reason to
proceed quickly with solar deployment. T suggest it is
Idaho Power that 1s causing great and irreparable harm to
Idaho Power's customers by exacerbating the g1obaI
climate change problem. Please reject Idaho Power's two
requests in its prayer for refief 1n Case IPC-E-74-09.
COMMISSIONER SMITH: Thank you, Mr.
Burkholder. Are there any questions? We appreciate your
time.
THE WITNESS: Thank you.
(The witness l-eft the stand. )
COMMISSIONER SMITH: Jesse Simpson.
JESSE SIMPSON,
appearing as a public witness, having been duly sworn,
was examined and testif i-ed as fol-lows:
EXAMINAT]ON
BY MS. SASSER:
O Good evening.
A Good evening.
29
O Pl-ease state your name, spelling your l-ast
name for the record.
A Jesse Simpson, S-i-m-p-s-o-n.
O Your address?
A 3511 West Alpine Road, Boise, 83705.
O Thank you. Are you a customer of Idaho
Power?
A Yes, f am.
0 Okay.
A Irm a LEED installer at a 1ocal solar
company named Altenergy, Incorporated. We install
commercial- and residential sol-ar electric systems.
Altenergy has a branch 1n Idaho and Virginia. Recently I
moved to Idaho from Vlrginia to help grow our Boise
branch last November. I am livlng proof that solar
businesses are creating jobs in Idaho. Since I came on
board, less than a year ago, we have also hired two new
employees, more than doubling our staff in Idaho in l-ess
than a year.
Idaho has great solar resource potential,
but like Virginia, both states are falling far behind
other states in developing our sofar resources. This
case that Idaho Power has brought before the PUC is an
example of the barrier to the development of solar energy
in Idaho. Idaho Power is asking for an exemptj-on to the
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CSB REPORTTNG
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SIMPSON
Public
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CSB REPORTING(208) 890-5198
S]MPSON
Public
Public Utility Regulatory Policies Act, aka PURPA, 1978.
Before PURPA, only utilities could own and
operate electric generatj-ng plants. PURPA required
util-iti-es to buy power from independent companies,
tradlng the market. for non-utility power generators like
my company, Altenergy, when they could provide it for
l-ess than what it would have cost for the utility to
generate the power. Had PURPA not been enacted,
electricity prices woufd IikeIy be higher. Some credit
PURPA as the most effective sin,gle measure in promoting
renewabl-e energy.
Idaho Power is asking for an exemption
from PURPA to al-l-ow them to box viable competitors out of
the market whll-e they delay to study the potential impact
of those competitors on their monopoly. The same small-
sofar projects could serve as a case study for the
utility to refine their determination of the costs and
benefits of solar projects to the grid.
In addition, if a utility is going to
study the cost of solar generation to the grid, the
utility should al-so be required to accurately account for
al-I the benefits of sol-ar energy to the grid and to
ratepayers. Some of these solar benefits include: solar
panels produce energy when we need it most, reducing
energlz demand at peak hours when power is the most
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CSB REPORT]NG
(208 ) 890-s198
R]CHARDSON
Publ-ic
expensive for utilities, which saves the ratepayers money
1n the long run. Sol-ar energy plants can be sited cl-oser
or di-rectly on site where energy is being consumed, whlch
means that less power is lost as it moves through
transmj-ssion lines and wanting to save by delaying or
reducing the need for costly transmission lines.
For these stated reasons, I urge the PUC
to deny ldaho Power's request for an exemption from the
federal PURPA law. Thank you very much for the
opportunity to comment.
COMMISSIONER SMITH: Thank you, Mr.
Simpson. We appreciate your attendance. Are there any
questions? No. Thank you very much.
THE WITNESS: Thank you.
(The witness left the stand. )
COMMISSIONER SMITH: Michael Richardson.
MICHAEL RTCHARDSON,
appearing as a public witness, having been duly sworn,
was examined and testifled as foll-ows:
THE WITNESS: My name is Michael-
Richardson, R-i-c-h-a-r-d-s-o-n, and I five at 6Ll North
Haj-nes Street, H-a-i-n-e-s, in Boise, and I am Idaho
Power customer.
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CSB REPORTING
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RICHARDSON
Publ-ic
MS. SASSER: Thank you.
THE WITNESS: First, thank you very much
to the Commissioners for allowing this issue to be open
to public discussj-on and for your consideration of my
statements. I'm the founder of the Idaho Climate Think
Tank. We're a sma1l organization focused on addressing
climate change which you can learn about at
idahoclimate.org. Last month we produced three evenings
of talks by seven Idaho scientists about climate change
impacts that are occurring today in Idaho.
Cflmate disruption, according to our own
experts at BSU, University of Idaho, and US Forest
Service is leading to a l-oss of habitat for species l-ike
bull trout, has led to an expansion of our fire season by
an entire month over the l-ast two decades, and in the
near future 1f emission scenarios play out in the darker
end of the spectrum, Idaho is looking at serious economic
l-osses in our farming communities.
Most pertinent to today, climate change
precipitatlon in Idaho. A team ofhas l-ed to less
scientists l-ed by Charlie Luce who works here in
published a paper in Science Magazine tn December
that westerly wlnds diminished by cl-imate change
Boise
showing
are
bringing less water from the Paclfic to the Intermountain
West. This is not a projection. It j-s a reality, an
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CSB REPORTING(208) 890-s198
RICHARDSON
Public
observed reality.
Idaho Power is familiar with this
precipitation issue, ds l-ower water l-evel-s behind
hydroelectric dams have led to a loss of energy produced
by these so-cal-l-ed renewable resources and an increased
rel-iance on natural gas and coal. Cl-imate change caused
by excessive carbon emissj-ons is leading to stresses on
utilities across the country. I would l-ike to bring to
the Commissionersf attention this report by the Union of
Concerned Scientists.I have three copies here. It's
called Power Failure, How Cl-imate Change Puts Our
Efectricity at Risk - and What We Can Do.
In addition to water scarcity, rising sea
Ievel, water that is too warm for cooling power plants,
extreme weather events such as Hurricane Sandy and more
frequent forest and brush fires are -- pardon me these
are cl-imate disruption impacts that are costing utilitj-es
billions of doll-ars today.
COMM]SS]ONER
I find this personally very
you to tie it to the purpose
THE WITNESS:
COMMISSIONER
THE W]TNESS:
don't know enough about the
SMITH: Mr. Richardson, while
interesting, I need to ask
of the hearing.
Okay.
SMITH: Thank you.
Yeah, Irm coming to that. I
sltuation that Idaho Power
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CSB REPORTING(208) 890-5198
RICHARDSON
Public
faces in their solar integration challenge, but Idaho
Power's request seems to be working under old world
consideratj-ons where the risks of not shifting to fow or
zero emission sources is not buil-t into their math.
Addressing the distributed costs of carbon emissions even
if just on other utilities in the United States ought to
be part of the equation of risks and benefitsr So what
I'm saying is that carbon emissions or the avoidance of
bringing on non-emissions-producing energy is leading to
additional costs on el-ectric util-ities across the
country, so that when you consider t.he costs of
integrating sol-ar, you should also be considerj-ng the
costs of not integrating so1ar.
That's al-I I have to say. Thank you.
COMMISSIONER SMITH: Thank you. We really
appreciate your comments.
(The witness left the stand. )
COMMISSIONER SMITH: Robert Sandberg.
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CSB REPORT]NG(208) 890-s198
SANDBERG
Publ-1c
ROBERT SANDBERG,
appearing as a public witness, having been first duly
sworn, testif ied as fol-l-ows:
EXAMINATTON
BY MS. SASSER:
O Please state your name and spell your last
name for the record.
A Sure. My name 1s Robert Sandberg. The
Iast name is spelled S-a-n-d-b-e-r-9. Irm a ratepayer
for Idaho Power and I live at 918 Haines,83112, and that
is in Boise.
O Thank you.
A Thank you. Thank you very much for
hearing our testimony tonight. I know it's been rushed
between the time it was announced two days ago and I do
appreciate the chance to speak with you. In addition to
being a stockholder and rat.epayer, I'm also a solar
contractor working with a company call-ed Sofar Cascade.
My buslness as a solar instal-l-er requires me to be
current with industry developments. In addition to other
benefits of solar mentioned previously, I'd like to add
that modern solar inverters provide actually a helping
hand to the util-ities.
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Public
There is such a thing cal-l-ed ride-through
which is the output of a sofar inverter and when utility
power fluctuates and sometimes fl-uctuates enough as a
brownout or to create a brownout, a ride-through provided
by solar inverters actua1ly helps the utility to even out
everything and prevents brownouts. This is a modern
accessibl-e or accessory that's quite a benefit to the
utilitles.
It's not really been stated much how solar
is in fact a benefit. It only looks at the rlsks or the
costs of sol-ar. My international travel- has al-l-owed me
to observe the great abundance of solar al-1 over Germany,
in smal-l- towns, in the Bl-ack Forest, and crisscrossing
Germany by trains, it's evident everywhere, and it's
useful- to mention that Germany has about the same climate
as Seattle, not much sunlight but very effective.
The penetration of sofar in Germany
currently is about 26 percent, and at one poj-nt on May
11th of this year, the renewabl-e energy contribution to
the total German electricity output reached 76 percent.
Thatrs an all--time hlgh, so in fact, it is very, very
possible to have a large portfolio of renewabl-e energy
sustainabJ-y added to a country's utility grid.
I bel-ieve it is wrong to suspend Idaho
Power's obligation to enter into power purchase
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SANDBERG
Publ-ic
agreements under PURPA for the fol1owing reasons: No. l,
lack of due diligence. f spoke with someone today at
Idaho Power who said that Idaho Power in fact has not
consu-]-ted with other utilities on their costs for sol-ar
integration. This is a real l-ack of due diligence on
their part.
Timing, No. 2, introducing such a
suspension at this time is hiqhly suspect. It smacks of
a stall tactic and allowing only two days for a public
hearing and taking public comment is also an effort to
thwart public input.
Fal-se Assessments. Idaho Power has only
signed and executed contracts for approximately 60
megawatts of sol-ar PURPA projects, a smal-l- fraction of
the 501 megawatts the Company alleges are attempting to
sign contracts. There's a 1ega1 question of suspending a
federal- law. We bel-ieve that suspending Idaho Power's
PURPA obligations, especially with regards to conLracts
that have already been executed, sends a chilling signal
to future j-nvestors of cl-ean energy in Idaho.
AdditionalIy, outstanding lega1 questions
remain concerning the state's ability to suspend the
implementation of PURPA which is an existing federal law.
Idaho Power has a history of resisting sol-ar. Just two
years ago Idaho Power attempted to radically l-imit net
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SANDBERG
Public
metering. This is a common tactic among investor-owned
util-ities around the country. Itrs not new and itrs
currently going on.
Thankfully, with public input and
thankfully, to the PUC, we wisely restored most of the
former net metering implementation. Idaho Power woul-d
like to place a freeze on what it consj-ders to be a
threat to its business mode1. It falsely considers
energy, solar energy, intermittent. Idaho Power paints
solar power in the same broad strokes as wind power. It
is much more predlctable and it is most abundant during
Idaho's times of heavy peak l-oad when it is sunny and
warm and air conditioners are runni-ng.
A1so, a cloud passing in one l-ocation is
counterbalanced by clear skies at the same time in
another location. Tdaho Power paints a picture of unique
circumstances. Sol-ar power has much deeper penetrat j-on
in areas l-ike Germany, as mentioned before, and in this
country in the large investor-owned utilj-ties. These
companies have found workable solutions to include
renewable energies. Idaho Power is not unique. It can
do the same as wel-I. The laws of physics apply equally
in Idaho's state as wel-l as it does across state lines.
These large utilities in the United States include Austin
Energy, Berkshire Hathaway Energy, Green Mountain Power,
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BYRD
Public
NRG Energy, Pacific Gas & Electri-c, and Xcel Energy. A11
of these investor-owned utilities have found a very
workable manner of deal-ing with sol-ar power.
For al-l- the above reasons, please vote to
reject Idaho Power's request to suspend their obligation
to enter into power purchase agreements under PURPA.
Thank you for the opportunity to glve some comments.
COMMISSIONER SMITH: Thank you very much
for coming tonight. If there are no questions, you are
excused.
THE WITNESS: Thank you.
(The witness l-eft the stand. )
COMMISSIONER SMITH: Whitney Byrd.
WHITNEY BYRD,
appearing as a public witness, having been first duly
sworn, testif ied as f oll-ows:
EXAMINATION
BY MS. SASSER:
O Can you please state your name and spe1l
your last name for the record?
A Sure, fly name is Whitney Byrd. My l-ast
name is spelled B-y-r-d.
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4t BYRD
Public
O And your resident address?
A 3511 West Alpine Street, BoJ-se, 83705.
O Thank you. Are you a customer of Idaho
Power?
A Yes, I am.
O Thank you.
A I I 11 make it short. I support the
development of our sol-ar energy resources, both for their
widely-documented economic and envi-ronmental benefits,
and I see this hearing, this request from Idaho Power as
a bar::ier to that development and I'm not concerned with
so-called irreparabl-e harm from the development of these
solar resources. ActualIy, I'm concerned with the risks
associated with not developing these resources and
continuing to purchase energy from coal--fired generation,
so I urge the PUC to deny both requests by Idaho Power.
I bel-ieve that they shoul-d comply with federal- Iaw, just
like anybody else.
Thank you very much for the opportunity to
comment.
COMMISSIONER SMITH: Thank you. Any
questions? Thank you very much.
(The witness left the stand. )
COMMISSIONER SMITH: f know that there are
a number of people attending by telephone and so woul-d
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42
ask at this time if there is anyone on the telephone who
wishes to make a statement. Seei-ng none or hearing none,
I apologize, that is the end of the peopl-e who have
signed up previously to testify. At this time if there
is anyone 1n the audience who did not sign up, but feels
they would l-ike to make a statement or has something
additional to add, we'd be pleased to hear from you at
this time. Yes, sir, please come forward.
ROBERT A. PAUL,
appearing as a public witness, having been duly sworn,
was examined and testified as foflows:
EXAMINATION
BY MS. SASSER:
O Hi, could you please state your name,
spelling your last name for the record?
A Robert A. PauI, P-a-u-I.
O And your resident address?
A 1,49 East Mallard Drive in Boise, Idaho.
O Are you a customer of Idaho Power?
A Yes, I am.
O Thank you.
A We're in the business of developing
PAUL
Public
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PAUL
Pubfic
utility scal-e sol-ar projects under the name Al-ternative
Power Development. Werve had the last four years'
history in Idaho, been before this Commission many times.
By the wdy, thank you for coming out on a rainy night, I
apprecJ-ate that. I just heard a couple of things that
got my attention. I wasn't going to testify tonight.
One was that APS, Arizona Public Service, has current
integration charges for solar at $2.50 per megawatt-hour,
so I think that's a good case example of what utllities
that have studied this determi-ne what to be falr, along
wlth they al-low, Arizona Publ-lc Service allows, a 38
percent capacity factor in their IRP methodology for
calculating solar; whereas, wind gets a 13 percent
capacity factor in calculating the rates, and for those
of you that aren't involved in this, it has to do heavlly
with what comes out of the rate machine when you turn in
the integrated resource plan, what numbers and what
inputs, so I think that that experience is important to
share with the Commission.
Al-so, there are many potential benefits
from sofar that are nearer to the system, to the grid,
and FERC has enforced recently, within the last 13
months, FERC -145, FERC 155, and'783t which al-l- in one way
or another addressed to the utility giving guidance for
what they should pay for these additional services coming
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44 PAUL
Public
from renewable or other generators and we woul-d l-ike to
include that in the integratj-on study.
Actua11y, I don't know that it's helpful
to speed up the integration study. I think that it might
be useful to extend the integration study, but not have
it delay the application process for energy sal-es
agreements right now, and I agree there's a certain
threshol-d within the system that these charges are
de minimis and won't make it to the ratepayer at all, so
allow the industry to please continue.
My recommendation is we don't the
Commission not to suspend PURPA for solar and that therz
also allow more tj-me and al-so aIl-ow for the study of
alternative strategies like wind coupled with solar to
sorry, batterles coupled with solar to take out the
intermittencies that are lntroduced from so-call-ed solar
proj ects .
COMMISSIONER SMITH: Thank you, Mr. Paul-.
THE WITNESS: Thank you.
COMMISSIONER SMITH: Questions?
Commissioner Kj ellander.
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45 PAUL (Com)
PubIi-c
EXAM]NATION
BY COT,IMISSIONER KJELLANDER:
O Your comments in reference to the
integration study should take longer to make sure it's
fully vetted, but al-so recogniz:ng it's your belief that
shoul-dn't stop contracts from going forward, recognizLng
that the Commisslon has i-ndicated that it wants to see
integration costs incorporated in sol-ar contracts, what's
your perception of what should occur between now and
whenever that integration study is completed and fu11y
vet.ted as far as an lntegration cost in contracts that
might be in the process of being negotiated?
A Thank you, Commissioner Kjellander. The
question is what your grounding is. Our grounding is
we're looking at right now including battery storage in
our projects that not only removes the intermittency, but
al-so contributes benefits to the system, and based on
that, dt a minimum, we shou1d have no integration charge
for that because we're not incurring any additional
costs.
O fs that something you bel-ieve should be
negotiated durj-ng that time frame with the battery backup
to accommodate the things you just described in terms of
being abl-e to execute a contract?
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PAUL (Com)
Publ-ic
A Yes.
O The issue of those integrated costs,
assuming you can come to some terms of agreement, that in
thls instance there wouldn't be any or they woul-d be
minimal?
A WeIl, Sust for the Commissj-on to allow for
that possibllity that projects, not just ours, but
projects coul-d have storage, whether it be batteries or
f1y wheels, some technol-ogy that isn't here in Idaho
today, but it's availabl-e elsewhere, that wou1d remove
these potential costs from the utillty's exposure;
therefore, we should have contract provisions to and I
understand that it's not neat, that there has to be in
order to go forward, you have to take some risks, but I
think it's reasonabl-e to us just from what we've heard
tonight and from my experience, I've been at this four
yearsr we don't have one megawatt of utility scale solar
operational, so I don't know how much of a risk we are.
Yeah, I don't mean that to be 911b, but I
just mean it as a practical matter, but I think this is a
workable solution that addresses Idaho Power's concerns
and the industry and also the developer and it should be
a benefit to the ratepayer. The ratepayers pay for quite
a number of these provisions and contingencies and I
think that with some study we might to have soften that,
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and I look forward to workj-ng with Idaho Power on that
basis of saylng fet's put down the lawyers and let's just
sit down and just figure out some ways j-t's beneficial-
for the entj-re system and for the ratepayers of Idaho,
even though f'm not running for office. Thank you.
COMMISSIONER SMITH: You're too late.
THE WITNESS: That's the usual story.
COMMISSIONER KJELLANDER: You did admonish
the lawyersr so you got my vote. Thank you.
COMMISSIONER SMITH: Thank you, Mr. Pau1,
we appreciate your testimony.
THE WITNESS: You're welcome.
COMMISSIONER SMITH: fs there anyone else?
Yes, please come forward.
L]SA HECHT,
appearing as a public wi-tness, having been duly sworn/
was examined and testified as follows:
EXAM]NATION
BY MS. SASSER:
O Could you please state your name and spell
your last name for the record?
A My name is Lisa Hecht. My last name r-s
HECHT
Public
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spelled H-e-c-h-t. I am an Idaho Power ratepayer. I am
also an Idaho stock power Irm sorry, Idaho Power
stockholder of 54 years.
COMMISSIONER SMITH: Could we have your
address, please?
THE WITNESS: 4920, I mj-ssed one , 4920
East Sagewood Drive, Boise, Idaho, 83176. f'm also a
retired Hewlett-Packard engineer and one whose children
wil-l- experience the consequences of decisions made today.
To quote Kim Trout of Trout Law in an article written
January 2nd, 20L4, and I included the link to that
article in my email testimony, as a regulated ut1Iity,
Idaho Power is required to provide certain services in
exchange for the opportunity to earn a fair return on its
investments. In the period from 1998 to 20L2, Idaho
Power's actual return measured in earnings per share
growth rose an average of 14.8 percent.
As a frame of reference, according to data
from Bloomberg and Thomson Financial, in the same 15-year
period, Idaho Power returns were LLl.9 percent higher
than the S&P, Dow Jones industrial average indices for
this same period. Abundant. evidence from the conclusions
of the IPCC and International Body of Cl-imatologists
indicates climate changes are already occurring and
resulting in si-gnificant costs to Idaho ratepayers and
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citizens in health, agriculture, and nationaf
catastrophes, fire, flooding, et cetera, extreme weather,
and the point I'd like to make that is probably
additional to what has been sai-d so far is that these
are the cost of burning coal- resul-ts in externalized
costs to Idaho Power, so that though we as ratepayers
j-ncur additional- increases to e1ectrical costs, fdaho
Power does not necessarily incl-ude them in their
cal-cul-ations.
C1ear1y, fdaho Power is recej-ving more
than a fair return on its investment and its ratepayers
are being asked to act as unwitting investors in Idaho
Power profits which are more than fair. At the same
time, coal generation incurs unfair costs for ratepayers.
Suspending PURPA and charging for a utility solar
connection removes the opportunity for ratepayers to
reduce their external-ized and direct costs. I should say
it reduces their incentive for ratepayers to reduce their
externalized and direct costs by moving to solar
electricity generation and viol-ates ldaho Power's lega1
chatter of fair returns as a regulated monopoly.
Idaho is blessed wi-th incredibl-e renewable
energy resources and especially sol-ar as intermittent
resources and in some cases with batteries it can be less
than Iinaudible]. It also has geotherma] and
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hydrogeneration as continuous sources. Solar installed
on rooftops has the added advantage of avoiding
transmj-ssion lines and Iossesr So it adds to energy
efficiency and reduced demand as a resource to Idaho
Power. This 1s a demand reduction cost removed from
Idaho Power, and as pointed out formerly, it afso peaks
when demand peaks. I believe that any discussion of
transmission I'm sorry, connection costs via
advantages of solar and the reduced cost must be taken
into consideration.
I also wanted to mention at the same time,
costs for coal- generation are rising as a result of
increased governmental requirements, and Stanford
University just announced a divestment from coal and
fossil fuels in 1ts estimated $18 billlon endowment.
Continuing this direction w1l-l- only increase costs for
ratepayers. In addition, I bel-ieve itrs premature to
suspend Idaho Power's obligation to enter into power
purchase agreements under PURPA for al-l the reasons cited
by Sj-erra Club.
In conclusion, f believe that until Idaho
Power demonstrates actual- harm and looks into the actual
positives associated and avoided costs assocj-ated with
sofar power, it is premature to suspend the Company's
solar PURPA obligations. Eor these reasons, I request
HECHT
Public
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WEBER
PubI ic
that the Idaho Public Utilities Commission reject Idaho
Power's request. Thank you for the opportunity to submit
comments.
COMMISSIONER SMITH: Thank you very much.
Questions? Thank you very much.
(The witness left the stand. )
COMMISSIONER SMITH: Anyone else?
MR. WEBER: I have one quick addition.
COMMISSIONER SMITH: Remember you're
already under oath.
MR. WBBER: Okay, perfect.
JOHN WEBER,
appearing as a public witness, having been first
previously duly sworn, resumed the stand and further
testif ied as fol-l-ows:
THE WITNESS: My name is John Weber and my
one quick addition listening to the further testimony
after mine is the one nice part about sol-ar is it's kind
of self-regulatlng, so I was in an fRP meeting, you know,
probably three or four years ago talking to some people
from Idaho Power and they said when a big cloud goes over
Boise, the demand drops, Ij-ke, 50 or 100 megawatts, just
one cIoud, because the AC load is a lot l-ess, and when
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WEBER
Publ-ic
that big cloud goes over the solar panels, it drops the
same amount, so I'm just trying to say sol-ar is kind of
self-regulating if the panels are located in the same
place as the power, and even if they're not, Idaho Power
seems to be able to keep the lights on when clouds go
over so they can take these big 50 or 100 megawatt drops
in increases in power without any issue, so I think
integrating solar wou1d just be like integrating cl-ouds
in the summertime for AC l-oad.
That's al-l- I have.
COMMISSIONER SMITH: We won't tell the
people in the control center that it's nothing, because
I'm sure they scramble sometimes.
THE WITNESS: WeII, they seem to do a very
nice job at it.
COMMISSIONER SMITH: They do an excellent
j ob.
THE WITNESS: And f'm sure they can do a
very nice job integrating solar without any additional
costs to ratepayers. Thank you.
COMMISSIONER SMITH: Appreciate you being
here tonight. It seems to me we've reached a point of
diminishing returns, possibly. Seeing no one else who
wishes to take the opportunity to make a statement, I
just want to express the gratitude of the Commission that
52
so many thoughtful, pertlnent comments were here tonight
on such short notice. We really appreciate that. It was
the provisj-ons in our rule that we were trying to comply
with to consj-der this application and your comments were
very thoughtful and right on point and we appreciate
them.
Do you have any comments, Paul, or Mack?
So where we go from here, I guess the Commission wil-l-
take this into consi-deration and address Idaho Power's
request as soon as we can, because we do understand that
uncertainty is really the enemy of progress in a 1ot of
ways and that's true whether you're a regulated entity or
a project developer, so the Commission will try to
express our views on thls as soon as we can
Hearing or seeing no further
come before us tonight, we are adjourned.
(The Hearing adjourned at 7:
comments to
Thank you.
15 p.m. )
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53 COLLOQUY
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CSB REPORT]NG
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AUTHENTICATION
This is to certify that the foregoing
proceedings held in the matter of Idaho Power Company's
petition to temporarily suspend its PURPA obligation to
purchase energy generated by solar-powered qualifying
facilities, (QFs), commencing at 6:00 p.m., ofl Wednesday,
Nlay 2!, 2074, dt the Commission Hearing Room, 412 West
Washington Street, Boi-se, Idaho, is a true and correct
transcript of saj-d proceedings and the origlnal thereof
for the file of the Commission.
' ' i t rri' r':*'
i 9 -.'O 'i -'-
, =fi2.-z S,t I g ='t',:y:,?S*".j
.2,,. ;;;i; o(,....- *
. 'lltttn rtrr\lr'" .+t'
CONSTANCE S. BUCY
Certified Shorthand Reporte
54 AUTHENT]CATION
PowerFailure
.I{ow Climate C"hangePufs Our Electricity af Rrsk-
andWhatWe CanDo i\{ichelle l):tvis
Steve Clermmer
April20ta
t*hib,f
hlo /
?dAl)o
EiT**fx-{*iry, is *,rtflx} fl*s *ur e$iti13, lir,*s- hmt ffiLt}- y:*{i*n's aS*
i*S *l*ctt-i*{f-1t s\rs{*x:: is ylttn*s"*h}* }:t: *xflt-*1ffi* trqr*at}-:*t"
*v*r:$;s, mrl:i*i": *sk**] cilx-x$# F3{}\ i*r q}'ffifl}}S*$. $**ss *:f *3*c-
tri*it.-v il"l *tx"r- l:{:x::*s, hmsim*$s*s, s*l"lq:*}s- iax:t* }rospiuiis
is inc*:xu,*r:{*:a:fl m{: h*sf-;-ximt lif*, -tfur**f*x-til:g nt urr;rst.
Today, extreme weather events such as coastal floods,
wildfires, intense precipitation (snow and rain), heat waves,
and droughts are becoming more frequent and severe in some
regions. Sea level rise is already worsening coastal floods,
and other extreme weather events are likely to become more
severe as the planet continues to warm. Building power
plants and electricity infrastructure in areas prone to climate-
related threats adds to those growing risks.
To ensure a reliable and affordable power supply for
decades to come, the electricity sector needs to become
more resilient in the face of the changes we are already
experiencing, and also adapt to growing risks. Our energy
choices are an important part of the solution: energy
efficiency and renewable energ:y can diversify our electricity
system and make it more resilient. But there is more to
the picture. By investing in those options, we can also
dramatically cut carbon emissions, helping to curb further
climate change. That is, smart energ'y choices will create an
electricity system that is more resilient in the face of changes
we are confronting today while reducing the long-term
damage and costs linked to global warming.
Extreme weather events, which often cause electricity
outages, have become more common and costly in the
United States over the past three decades (Figure l) (Weiss
and Weidman 2ol3a). For example, temperature and
precipitation records suggest that certain types of extreme
weather events, such as severe droughts in Texas, are several
times more likely to occur now than in the 1960s (Rupp et
al. 2012). The average total cost of severe weather events
rose from $2O billion per year in the l98os to $85 billion
in the 2OlOs (Weiss and Weidman 2ol3a). In 2Oll and 2Ol2
alone, 25 extreme weather events nationwide resulted in
l,loo fatalities and costs totaling $188 billion (NOAA 2ol3a;
Weiss and Weidman 2Ol3b).
When customers lose power during extreme weather
events, the costs associated with lost output and wages,
spoiled inventory, and restarting industrial operations can
be significant. For example, weather-related power outages
in 2Ol2-when Hurricane Sandy hit the East Coast-cost the
nation between $27 billion and $52 billion (EOP 2Ol3).
Our electricity system- including the transportation
networks that deliver fuel, the power plants that generate
electricity, and the transmission and distribution lines that
deliver power to homes and businesses-was not designed
to withstand many of the extreme weather events occurring
today (GRO 2014; DOE 2Ol3). Many parts of the electricity
grid are old, outdated, and in poor condition, making the
!:iir:.,i:ii r Number and Cost of Billion-Dollar Weather
Events, l98O to 2012
1980-89 1990-99 2000-09 2010-12
Extreme weather events have become much more common as well as
costly over the past three decades.
$7o
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UNION OF CONCERNED SCIENTISTS
Not only is our electricity system already lulnerable to
extreme weather, but those risks will grow in the future.
Rising levels ofcarbon dioxide and other heat-trapping
gases in the atmosphere have already caused average global
temperatures to increase at least since the l88Os, when
scientists began gathering reliable data. Higher temperatures
add moisture to the atmosphere, intensifu storms, and raise
sea levels.
Scientists expect the severity of several types of extreme
weather-including coastal flooding, wildfires, drought, the
heaviest precipitation events, and heat waves-to increase as
a result of continued climate change (IPCC 2012; UCS 2ol2).
Of course, the scale and magnitude of these trends will vary
greatly by region. And the link between climate change and
other types of extreme weather, including hail and tornadoes,
is less clear. However, if global warming emissions continue
unabated, coastal flooding, wildfires, droughts, and heat
waves are likely to become worse, raising the threat to our
already wlnerable power grid.
Our electricity system clearly needs to adapt to these
conditions. But it also has a vital role to play in curbing
further climate change, as the sector is the leading source of
U.S. carbon dioxide emissions. ln 2012, nearly 4O percent of
energy-related U.S. carbon emissions stemmed from burning
coal, natural gas, and oil to produce electricity (Figure 2)
(ErA 2Ol3).
Energy-Related U.S. Emissions of Carbon
Dioxide, by Source, in2Ol2
Commercial
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system even more vulnerable. In fact, the American Society
of Civil Engineers (ASCE) gave the overall U.S. energy
infrastructure a grade of D+ in its 2Ol3 assessment, reporting
that it is "in poor to fair condition and mostly below
standard . . . a large portion of the system exhibits significant
deterioration" (ASCE 2013, p. ll).
Aging electrical equipment has contributed to a growing
number of major outages, which rose from 76 in 2OO7 to 3O7
in 2Oll (ASCE 2013). Even the pipelines that deliver oil and
natural gas to power plants are in poor condition: pipeline
failures have resulted in deaths, injuries, properry damage,
and environmental harm, such as land and water pollution
(ASCE 2013).
Investments in transmission and distribution
infrastructure are not keeping pace with the needs ofour
nation's aging grid. By 2O2O, investments in electricity
infrastructure will have fallen behind by $37 billion for
distribution and 957 billion for transmission, according to
the ASCE. And while upgrading the existing infrastructure to
current standards is important, the electricity grid will also
require new technologies and approaches to withstand even
more severe conditions.
Electricity generation accounts for almost 4O percent ofenergr-
related U.S. carbon emissions-more than any other sector.
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Power Failure: How climate change puts our Electricity at Risk-and whatwe can Do
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HOW SEA LEVEL RISE THREATENS OUR ELECTRICITY
INFRASTRUCTURE
Sea level rise and storm surge put low-lying power plants
and other electricity infrastructure at risk. Today some IOO
electric facilities in the contiguous United States, including
power plants and substations, are sited within four feet of
local high tide (Figure 3). And as sea levels continue to rise,
the risks to these facilities from storm surge and floods will
also increase.
Climate change is likely to double the risk of coastal
floodingby 2O3O (Climate Central 2012). Estimates of sea
level rise range from eight inches to 6.6 feet above 1992 levels
by 2100. However, the lower end of this range is based on
historic data on sea level rise. More recent data show that
rates of sea level rise have nearly doubled in recent years,
suggesting a total rise of 1.6 to 6.6 feet by 2lOO (NOAA 2Ol2).
Higher sea levels increase the risk of coastal flooding
from storm surges associated with hurricanes and coastal
storms. With a warmer atmosphere, hurricane rainfall is
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also projected to increase by the late twenty-first century,
which could increase surface runoffand flood risk (Knutson
et al. 2Ol3). This puts the electricity infrastructure along our
coasts-including power plants, transmission and distribution
lines, transformers, substations, and refineries-at greater risk
ofdamage and outages from flooding.
Consider, for example, the havoc wreaked on the
electricity sector in October 2ol2by Hurricane Sandv.
The storm surge that rode in on higher sea levels caused
record flooding along the coasts of New York, New Jersey,
and Connecticut (Blake et al. 2Ote). More than 8 million
customers across 2l states lost power, and utilities reported
damage to some ZOOO transformers and 15,200 poles (DOE
2Ol3). In the aftermath of the storm, New York City found
that 37 percent of the capacity of its transmission substations,
and 12 percent of the capacity of its large distribution
substations, are at risk of flooding during extreme weather
events (PlaNYC 20l3).
THE THREAT FROM WILDFIRES IN THE WEST
Higher air temperatures have led to drier forests and earlier
snowmelts, both of which contribute to wildfire risk (Tebaldi,
Adams-Smith, and Heller 2Ol2; Stewart, Cayan, and Dettinger
2005). The average number of large wildfires per year in
the western United States rose from l4O in the l980s to 250
between 2OO0 and 2012 (USGS 2Ol3). Droughts and higher
air temperatures also help make wildfires more intense and
longer-lasting.
Wildfires have important consequences for the power
sector. They can damage the poles carrying transmission
lines, for example. However, the greatest risks come from
smoke and particulate matter. Smoke and ash from fires
can ionize the air, creating an electrical path away from
transmission lines. This can shut down the lines and produce
power outages (Ward 2Ol3; Sathaye et al. 2Ol2).
For example, in summer 2011, the Las Conchas wildfire
in New Mexico put rwo high-voltage transmission lines that
deliver electricity to about 4OO,0OO customers at risk. The
Power Failure: How Climate Change Puts Our Electricity at Risk-and What We Can Do
fire also forced Los Alamos National Laboratory-one of the
nation's three nuclear weapons labs-to close (DOE 2Ol3;
Samenow 2Oll).
In California, more frequent and intense wildfires
linked to climate change are projected to put a large share of
transmission equipment at risk. Some major transmission lines
in the state face a 4o percent higher probability of wildfire
exposure by the end ofthe century (Sathaye et al. 2oI2).
THE VULNERABILITY OF WATER.DEPENDENT POWER
PLANTS IN A WARMING WORLD
The U.S. electricity sector is highly dependent on water for
cooling. Nearly all thermal power plants-coal, natural gas,
nuclear, biomass, geothermal, and solar thermal plants-
require water for condensing the steam that drives the
turbines. In fact, power production accounts for the single
largest share-t'aro-fi fths-of all freshwater withdrawals in
the United States.
As average global temperatures continue to rise, droughts
and reduced water supplies are likely to become the norm in
some regions. Hydrologic patterns are changing seasonally
as well. In the Northern Hemisphere, for example, snow is
melting earlier in spring, and soil is becoming drier earlier in
summer, when users need water the most (Root et al. 2OOS).
Greater variability in water quantity and quality-particularly
its temperature-because of climate change puts the power
sector at greater risk (Rogers et al. 2Ol3).
Power plants can run into several types ofwater-related
problems. If the temperature of the incoming water at a
power plant is too hot, it can reduce the plant's efficiency or
cause unsafe conditions. Ifthe temperaftrre ofthe discharge
water is too high, a power plant can be out of compliance
with federal and state temperature regulations set to
protect local ecosystems. When either of these conditions
occurs, power plants must dial back production or shut
down temporarily, often forcing utilities to purchase more
expensive replacement power. For example, in the summer
of 2007, triple-digit heat in North Carolina meant that water
used for cooling Duke Energy's Riverbend and GG. Allen
coal plants on the Catawba River was too hot to discharge
UNION OF CONCERNED SCIENTISTS
(Figure 4). As the utility scaled back production at those two
plants, blackouts rippled through the area.
Droughts can be just as troublesome as high water
temperatures for power plants. In summer 2012, water levels
in lowa's Cedar River were so low that operators of the
Duane Arnold Energy Center, a nuclear power plant, had to
dredge the river to ensure access to enough water (Telegraph
Herald 2Ot2).
These situations occur most often in summer, when
customers need electricity the most (Rogers et al. 2Ol3). During
the summers of 2OO7 and 2008, the Laramie River Station, a
coal-fired power plant in Wheatland, WY, risked running out
of cooling water because of drought. To avert a production
cutback or shutdown, operators drew on water sources
typically used for irrigation (Rogers et al. 2013; NETL 2009).
Because thermal power plants rely heavily on water for
cooling, a changing climate is likely to put them at higher risk
from drought. Inland flooding from extreme precipitation
events also poses a major risk to electricity infrastructure,
because power plants are sited near rivers and lakes (EPA
2Ol3). Fort Calhoun, a nuclear plant near Omaha, NE, had to
close from April 20ll to December 2013 because of damage
caused by record flooding along the Missouri River and
concerns about plant safety (NRC 2Ol3).
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water for cooling a changing climate is likely
to put them athigher riskfrom drought.
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When water used to condense steam at power plants is too hot or supplies shrink, the plants run into trouble. Operators have had to shut
down or curtail production at numerous power plants because ofwater-related risks in recent years.
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Power Failure: How Climate Change Puts Our Electricity at Risk-and What We Can Do
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THE IMPACT OF HEAT WAVES ON POWER PLANT
OPERATIONS AND ELECTRICITY DEMAND
Climate change will bring more intense, more frequent, and
longer-lasting heat waves in North America (IPCC 2Ol2).
Record high air temperatures now occur fwice as often
as record low temperatures (Meehl et al. 2009). The past
37 years (through December 2Ol3) have been hotter than
the nventieth-century average, and nine ofthe 10 warmest
years on record have all occurred in the twenry-first
century, according to the National Oceanic and Atmospheric
Adm inistration (NOAA 2013b).
Factors such as limits on water discharge temperatures
could cause power plants in the central and eastern United
States to lose 12 percent to 16 percent oftheir capaciry on
average, by mid-century (van Vliet et al.2ol2). But higher air
temperaftlres can also directly reduce power plant capacity. A
snrdy for the California Energy Commission found that under a
scenario of high global warming emissions, climate change could
reduce the capacity ofexisting natural gas-fired power plants
by 23 percent on the hottest August days by the end of the
century, compared with tz percent today (Sathaye et al. 2Ot2).
Higher air and water temperatures can also lead to reduced
efficiency at thermal power plants, which require a strong
temperature difference between the steam in the turbines and
the water used to condense it to function optimally. When it
is hot outside, water temperatures are higher, so the power
plants produce less electricity per unit of fuel. A similar
loss of efficiency occurs for transmission and distribution
equipment, which does not operate as efficiently or carry as
much current at higher temperatures (Ward 2013).
As people turn on their air conditioners on hot days,
demand for electricity rises, further taxing the system.
For example, electricity demand in California could increase
by as much as 2l percent on especially hot days (those in the
ninetieth percentile) by the end ofthe century. Higher average
temperatures are projected to raise the need for transmission
capacity by 3l percent in that state in coming decades (Sathaye
et al. 2OI2). Cities and states around the country are likely to
face similar challenges as temperatures rise.
UNION OF CONCERNED SCIENTISTS
To reduce the vulnerabilities ofour electricity system today
and ensure reliable electricity in the future, the power sector
will need to both adapt to and mitigate climate-related risks.
our energy choices will play a vital role in both improving
the resilience of the electricity system and reducing global
warming emissions.
ADAPTING TO CLIMATE CHANGE TO HELP KEEP THE
LIGHTS ON
Because some ofthe effects ofclimate change are unavoidable
and already occurring, the electricity sector clearly needs to
better prepare to withstand and recover from those effects.
Some of the most common adaptation measures are known as
"hardening" measures, as they can protect equipment from
Unless we reduce global
warming emissions and
mitigate the worst effects
of climate change, the
need for costly adaptation
measures will only grow.
weather-related damage. Examples of hardening measures
that utilities have proposed in response to extreme weather
events include:
o Building protective sea walls
o Restoring naturally occurring protections, such as sand
dunes, beaches, and wetlands
o Elevating or relocating important electrical equipment
along the coasts, to protect it from flooding
o Burying transmission and distribution lines underground
where feasible
o Reinforcing aboveground poles with sturdier materials, to
reduce damage during storms and wildfires
Other common adaptation measures include trimming
trees near transmission and distribution lines, to prevent
damage from high winds and icing, and installingbackup
diesel generators for homes and buildings. However, diesel
generators also produce carbon and other harmful emissions,
making them a less attractive option.
While some level of hardening the electricity system is
necessary, these measures are often expensive and may not
be the most cost-effective long-term solution. PSE&G-a
New Jersey utility hit hard by hurricanes Sandy and Irene-is
proposing to spend $3.9 billion over lO years on hardening
measures such as relocating equipment in vulnerable
locations, trimming trees, and burying power lines (PSE&G
2Ol3). A 2Oll study by Entergy Corp. found that hardening
electric utility systems along the Gulf Coast would cost
$15 billion from 2OlO to 2O3O (Entergy 2Oll). All potentially
attractive measures to protect the company's energ'y
infrastructure would cost gt20 billion over 20 years, although
they could avert $200 billion in losses (Entergy 2Oll).
Other utilities and state and local governments are
already making smart adaptations to climate change. EPB,
the local utility in Chattanooga, TN, has made several
investments in "smart grid" technologies. These include
smart switches, which adjust the flow of electricity during
outages to isolate problem areas, minimize the effects, and
ensure that emergency services such as hospitals have access
to power. Those investments have already reduced the
number of power outages and provided significant savings
to customers (Hand 2013). Massachusetts plans to invest
$40 million to make the electricity grid more resilient,
including in technologies such as solar panels that will also
reduce emissions (Governor Deval Patrick 2Ol4).
Adapting to the effects of climate change is important,
but it's not the whole story. Unless we reduce global warming
emissions and mitigate the worst effects of climate change,
the need for costly adaptation measures will only grow.
Power Failure: How Climate Change Puts Our Electricity at Risk-and What We Can Do
Energy efficiency measures cdnbe a
win-win solutionfor both adapting to
and mitigating climate change.
Beyond adapting to changing conditions, the electricity sector
also needs to cut its carbon emissions dramatically. The next
sections outline solutions that can fulfill both goals.
REDUCING THE PROBLEM BY REDUCING DEMAND
Energy efficiency measures can be a win-win solution for
both adapting to and mitigating climate change. Energy-
efficient homes and businesses require less electriciry
deferring or eliminating the need to build new power plants
and power lines. Less energ'y infrastructure means less
equipment is vulnerable to damage from extreme weather
events. Increasing energy efficiency is also one ofthe fastest
and cheapest ways to meet electricity needs while saving
consumers money on their energy bills and reducing carbon
emissions from coal and natural gas plants (ACEEE 2Ol3).
Energy-efficient buildings and appliances reduce
electricity demand, save money, and ease the need for cooling
during hot summer months. Boston's Renew Program has
UNION OF CONCERNED SCIENTISTS
produced g2 million in annual savings by making homes
more energy-efficient (Boston 2Ol3). Spurred by the U.S.
Environmental Protection Agency's Enerry Star program to
buy more efficient appliances and other products, Americans
saved $26 billion on their electricity bills-and electricity
equivalent to that used by 35 million average homes-in 2OI2
(EPA 2014). And because incorporating energy efficiency
measures into new buildings is much more cost-effective
than adding them retroactively, rebuilding after major storms
provides an important opportunity to reap the benefits of
energy efficiency and increase a community's resilience
(ACEEE 2013).
Many cities are also implementing green and cool
roof programs, in which rooftop gardens cool the building
through evaporative cooling, or reflective materials on
roofs deflect heat from the sun. Green and cool roofs reduce
the urban heat-island effect while reducing the need for
air conditioning, making buildings more comfortable and
iii iij!!. lilj'rli,lL1iirlr.rli'il i: i rll iir.,,;:t,l i i)t:i;j:1
improving urban air quality (Gaffin et al. 2012). Installing
green or cool roofs on 5O percent of residential, commercial,
government, and public-use buildings in Southern California
could save enough enerry to power more than |27,OOO homes,
reduce enerry bills by $2ll million per year, and cut carbon
emissions by 465,000 metric tons annually (NRDC 20l2).
Many utilities and grid operators are also implementing
"demand-response" programs, which pay large consumers
to cut electricity use during periods of high demand, or
charge higher prices to encourage them to do so. Those
programs make the grid more flexible and resilient. For
example, during a September 2013 heat wave that set a
record for electricity use in Pennsylvania, PJM, the regional
grid operator, used demand response to curb demand by
six gigawatts-equivalent to the output of lO coal-fired power
plants. That program kept the grid stable and air conditioners
running when customers needed them the most (Sacromento
Bee 2013).
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RENEWABLE ENERGY: KEY TO A RESILIENT' RELIABLE
ELECTRICITY SUPPLY
Replacing power from conventional plants with renewable
energy can make the electricity system more resilient while
also helping to curb further climate change by reducing
heat-trapping emissions. Renewables provide these benefits
because:
Renewable energy is often smaller-scale and more dis-
tributed. Large coal and nuclear plants make the grid less
flexible and more vulnerable to blackouts when they go
off-line. The potential for a sudden outage also means that
grid operators must have enough generation and trans-
mission reserves on hand to immediately replace output
from the plants. And when they do shut down, coal and
nuclear plants often require repairs that take several days
or weeks before they can resume operation.
Renewable energy technologies such as rooftop solar
panels and wind turbines tend to rely on smaller, more
distributed units, greatly reducing the impact on the grid
when weather damages them. And many renewable ener-
gy facilities have weathered storms and heat waves better
than conventional power plants (see the box on p. l2).
Renewable energy lowers water risks. Wind turbines
and solar panels are more resilient to drought and heat
because they do not require water to produce electricity.
These technologies offer an important solution for regions
of the country with limited freshwater supplies, or with
high concentrations of thermal plants that have run into
problems related to high water temperanlres. Dry-cooling
systems, which use air instead of water, can dramatically
Power Failure: How Climate Change Puts Our Electricity at Risk-and What We Can Do
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Several climate-related extreme weather events have
revealed that renewable energy is already contributing
to a more resilient electricity sector.
In summer 2Oll, Texas suflered from a record-
breaking heat wave, forcing many coal and natural
gas power plants to shut down. Wind power made a
significant contribution to the electricity system for
several days, helping to keep the lights on and prevent
rolling blackouts (Bode 2Oll; ERCOT 2oll). Wind power
also eased pressure on water supplies during one ofthe
worst droughts in the state's history.
Texas has made significant investments in wind
power, and now has more than twice as much wind
capacity as any other state. Wind turbines produced more
than 8 percent of the electricity used in Texas in 2013,
making the state's power sector more resilient in the face
of climate change while reducing carbon emissions.
In October 2012, as noted, Hurricane Sandy exerted
major stress on the Northeast's electricity grid, damaging
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power plants, transmission lines, and pipelines or forcing
them to shut down. Some 8 million customers in 2l states
lost power (DOE 2013). Yet no wind turbines or solar
facilities suffered any damage from the hurricane,
according to ISO New England, one ofthe regional grid
operators (Wood 2Ol2). The five-turbine Jersey Atlantic
Wind Project, offthe coast of Atlantic Ciry survived the
storm and quickly began producing power after it had
passed (Jervey 2012).
New Jersey is a leader in solar energT, ranking fifth
in the nation in capacity for solar electricity installed in
2Ol3 (SEIA 2Ol3). Solar energy has thrived in the state
thanks to: New Jersey's renewable energy standard,
which requires utilities to obtain a growing share of their
power from renewables; net metering policies, which
allow customers with solar to feed excess electricity into
the grid; and rebate programs, which lower the up-front
cost of installing solar equipment.
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reduce water use at thermal power plants. Coupling these
systems with renewable technologies such as concentrat-
ing solar and biomass can cut both carbon emissions and
water use dramatically.
. Renewable energy reduces fuel supply risks. Renew-
able resources are far less vulnerable to interruptions in
fuel supplies stemming from extreme weather, because
most renewables do not use fuels that must be extracted,
processed, and transported. The fossil fuel supply chain,
in contrast, entails many steps that are vulnerable to the
effects of climate change.
Drilling for fossil fuels and producing them often require
freshwater resources, for example, which are expect-
ed to decline with climate change in many regions and
some seasons (DOE 2013). And the delivery of oil, natural
gas, and coal requires transportation networks such as
pipelines, railroads, and waterway barges-all vulnerable
to the effects of climate change (Epps 201a; Cruz and
Krausmann 2013). Because most renewables do not rely
on fuels that are subject to price spikes, they also add price
stability for consumers.
UNION OF CONCERNED SCIENTISTS
*
Like many fossil fuel and nuclear power plants, renewable
energy technologies such as wind power and large-scale
solar projects are often sited far from large cities, and require
transmission lines to deliver power to consumers. If the grid
goes down because of extreme weather, delivering power
from any facility is challenging. However, as noted, our
nation's electricity infrastructure is in need of repairs and
upgrades. Advances in grid technology and new transmission
lines will make the grid more flexible and resilient while
allowing it to integrate more renewable energy.
Recent studies have shown that installing solar panels
with battery storage on homes and businesses could be
economically viable in many states within t5 years (CEG
2014; RMI 2Ol4). That approach would provide an attractive
alternative to backup diesel generators, which emit carbon
and other pollutants and pose public health and safety risks.
Incorporating solar heating, daylighting, and other energ'y-
saving approaches into building designs-and investing in
efficient bioenergy heating and geothermal heating and
cooling systems-can also greatly reduce energy bills and
emissions, while making buildings more comfortable during
power outages.
Although vital to daily life and our economy, our nation's
electricity infrastructure is not prepared for a future with
rising sea levels and more drought, extreme heat, wildfires, and
flooding owing to climate change. Forfttnately, many solutions
are available now to help us better respond to extreme weather
and climate change, while also reducing harmful emissions to
curb the severity and costs of further warming.
o Conductvulnerabilityassessments. Understandingrisks
and r,llnerabilities is a critical first step for communities
in determining which steps to take to protect themselves
from the effects of climate change. Cities, counties, and
states should conduct thorough assessments that include
the risks of climate change to the electricity sector.
. Create public-private partnerships to invest in climate
resilience. Federal and state governments and private
instirutions should work together to identifii resources
and invest in technologies and other measures that make
the electricity sector more resilient while helping to curb
further climate change.
. Incorporate climate adaptation and mitigation mea-
sures into utility resource planning. State and local
governments should require utilities to consider the costs
Power Failure: How Climate Change Puts Our Electricity at Risk-and What We Can Do
ofadapting to climate change in their long-term resource
planning. Utilities should also consider the costs and ben-
efits of investing in technologies that significantly reduce
emissions and future climate effects.
Upgrade the electricity infrastructure in ways that
strengthen its resilience and reduce outages. Power
plant owners should install technologies that use less
water-such as dry and wet-dry hybrid cooling systems or
new wind and solar photovoltaic (PV) projects-to ensure
that our electricity system is more resilient in the face of
heat and drought. Utilities and grid operators should also
pursue approaches that make the grid more flexible and
allow it to integrate renewable and distributed energy
resources. These include expanding transmission capacity
and energy storage, adopting demand-response programs,
developing microgrids (which can better isolate outages),
and improving forecasting and scheduling.
Adopt strong state and federal clean energy policies.
Policy makers should adopt proven policies and pro-
grams to ensure the timely expansion of renewables and
energy efficiency, such as renewable electricity standards,
energy efficiency standards, tax incentives, financing
mechanisms, and funding for research and development.
By encouraging innovation and reducingcosts, these
approaches will help overcome market barriers that are
inhibiting the development of clean energy technologies.
Enact strong federal carbon standards. The U.S. Envi-
ronmental Protection Agency (EPA) should finalize and
implement strong standards to reduce heat-trapping emis-
sions from new and existing power plants, to help mitigate
further climate change and its costs. The EPA should
allow states to use renewables and efficiency investments
to comply with these standards. The federal government
should also set limits that will reduce the nation's carbon
emissions at least 8O percent by 2050.
o Encourage home owners and businesses to do their
part by investing in energy efficiency and renewables.
Investing in more efficient buildings and appliances-
as well as clean technologies such as rooftop solar PV
panels, solar heating and daylighting, and efficient
bioenergy heating and geothermal heating and cooling
systems-can greatly reduce electricity bills and global
warming emissions. Those investments will also keep
buildings more comfortable during extreme weather
events and power outages.
The resilience of our electricity sector will determine the
extent ofpower outages and damages from the next major
drought, coastal flood, storm, and heat wave. Making smart
choices to improve the resilience of our electricity grid and
produce clean power will minimize the impact of these
events while strengthening our energy security and helping
to curb further climate change.
Michelle Davis is a research associate in the UCS Climate and
Energy Program. Steve Clemmer is director of energt research
and analysis for the program.
ACKNOWLEDGMENTS
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UNION OF CONCERNED SCIENTISTS
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