19910419Brown Petition for Reconsideration.pdf

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C. TOM ARKOOSH
RODEN & ARKOOSHAttorneys at Law
8O2 West Bannock, Suite 900P.O. Box 21L0Boise, Idaho 83701Telephone: [phone]O
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF AN INTERCONNECTTON
TARIFF FOR NON-UTILITY
GENERATION - SCHEDULE 72
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ATTORNEYS FOR PROTESTANT
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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Case No. IPC-E-90-20
PETITION FOR
RECONSIDERATION
Comes now the protestant in the above entitled action, A. W.
Brown, Inc., a California corporation qualified to do business in
the State of Idaho fBrown], by and through his counsel of record,
c. Tom Arkoosh of the firm of Roden & Arkoosh, Boise, Idaho, and
herein respectfully petitions the fdaho Public Utilities Commission
ICommission] for reconsideration of its Order No. 2363L, entered in
the above matter, based upon the fol1owing showing:
1. The Commj-ssion found in s,eid order that,
Previously, the terms and condj-i:ions for interconnectionof non-utility generation to the Company'stransmission/distribution system have been individuallynegotiated, although the terms and conditions have provedto be substantially similar.
This finding directly conflicts with the previous findings of
the Commission. fndeed, this finding conflicts wj.th the practice
of the Idaho Power Company requiring the payment of the
j-nterconnectj-on costs at Idaho Power prices before it will allow
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interconnection, and the Conmissionrs rulings which sanctify this
practice. For example, in Order No. 19442, Case No. IJ-LOO6-237,
the Commission addressed these issues:
The rrRemote Disconnectiontr fssue. May ldaho
Power install remote disconnection equipmentat the Arkooshesr cost?
The |tlnterconnection Costrr Issue. What
expense may Idaho Power charge the Arkooshesfor interconnecting the Geo-Bon #2 project toIdaho Powerrs line?
The Commission addressed both these j-ssues, and concluded that
Idaho Power could charge a developer its costs plus .7eo monthly
maintenance. fn reaching this conclusion, the Commission rejected
the developers argument that the federal regulations allow a charge
for interconnection only in excess of what the rate-payer vrould pay
if the utility interconnected its own new capacity. This identical
argument was made by Brown in the pending matter, and also
rejected. fn Order No. L9442, the Commission accepted that the
federal regulations defined Itinterconnection costsrt as the cost
over and above what the utility would pay for interconnection of
its own capacity, but presumed that those costs were included in
the avoided costs calculation:
Idaho Powerrs remote disconnection (and otherinterconnection) costs for additional generation purchase
are presumable already in place; if they are not, nothingin the record quantifies them for comparison.
order No. 19442, page L1.
In the present case, the Commission has glossed over that the
f ederal regulations def ine rrinterconnection costsrr as only the
costs of interconnection over and above the costs that the
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ratepayer $rou1d ordinarily pay for the new capacity. The
Commissj-on then acknowledges that, in any event, rrIPCo points out
that the avoided cost rates paid to qualifying facilities (QF.s)
al1ow for the recovery of interconnection costs by the QF. " The
signatory of this brief has reviewed the pre-filed testj-mony of the
joint utility panel in Case No. U-l-500-170, setting forth the
capital cost of plant used to calculate the avoided costs using the
surrogate avoidable resource methods (SAR), and does not perceive
that the interconnection costs, line rebuild costs, and the like
which are charged to QF's are in fact included in the avoided
costs. Instead, they appear not to be included j-n avoided costs.
Because the U-1500-170 case is the only record available on this
question, the Commission should have made a determination of the
numerical value of the ttinterconnection costsrr as the same are
defined in the regulations, and determined whether indeed it cost
the ratepayer more to interconnect a QF, than it would for the
utility to interconnect equivalent capacity: It is respectfully
submitted, given the overcharges pointed out by Brown in his
protest that the cost of interconnecting utility capacity is much
higher than the cost of interconnecting QF. capacity. Thus, a
developer should be required to pay nothing for interconnection,
and it would be a bargain for the ratepayer.
2. The Commission avoided the question of whether fdaho Power
is overcharging on its interconnection costs by noting,
rrCompetitive third party pricing and construction is not precluded
under Schedule 72.tt If this were correct, it would appear to solve
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this problem in the future. Schedule 72 provides, however,
The Company will construct, own, operate andmaintain all Disconnection Eguipment, Metering Equipment,and Upgrades and Relocation.
These are the very items about which Brown complains that
Idaho Power imposes exorbitant overcharges. Brown points out in
his protest that these items are simple, avaj-1abIe on the market
much cheaper than from Idaho Power, and, in some instances, better
suited to the project than the itens Idaho Power provides.
3 . The Commissj-on rejected Brorarnts protest to the .72
maintenance charges imposed by Inot negotiated with] Idaho Power on
the interconnectj-on costs. He points out that he has already, in
35 months, paJ-d $4,805.28 to maintain $4500 worth of equipment.
Even accepting ldaho Powerts contention that the value of the
interconnection equipment sold to Brown is $19r00o, he will have
paid its ful1 value for mere maintenance in 12 years at the rate of
$L33.48 per month. Using a realist future value analysis, and
accruing the maintenance money dt, for instance, LoZ interest,
Brown re-pays Idaho Power for this equipment every 94.5 months, or
7.8 years. Over the life of a 35 year contract, Brown wil-1 have
paid to replace the interconnection equipment 5 and L/2 times
once originally and 4 and 1/2 times to Idaho Power. The Commission
need only contemplate whether the O & Iq on sma11 hydro projects are
projected to be this high to conclude that .72 O & M charge does
not accurately or reasonably reflect actual costs based upon actual
experience.
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CONCLUSION
The Commission is herein respectfully requested to conduct a
hearing and take evidence regarding its findings concerning
Schedule 72; or, alternatively, hold this matter in abeyance until
the heari-ng in Case No. IPC-E-91-2, concerning these identical
issues. It is apparent from the face of the findings which support
the Order under consideration that the facts relied upon are
inaccurate, and should be reconsidered by the Commission.
DATED this day of Apri1, L991.
CERTIFICATE OF MATLING
r hereby certify that on the fu- day of April , Lsst, r
served a true and correct copy of the foregoing docurnent upon thefollowing persons, by causing to be deposited a copy thereof in theUnited States Mai1, first class postage prepaid:
BARTON L. KLINEAttorney at LawP.O. Box 959Boise, Idaho 8370L
SCOTT WOODBURY
Idaho Public Utilities Commission
StatehouseBoise, fdaho 83720
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PETER J. RICHARDSON
DAVIS WRTGHT TREMAINE
350 North 9th Street,
Boise, Idaho 83702
Suite 400
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C. TOM ARKOOSH