Loading...
HomeMy WebLinkAbout20071228Vol I Prehearing Conference.pdf,ORIGlNAL.BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF IDAHO POWER COMPANY'S PETITION TO INCREASE THE PUBLISHED RATE ELIGIBILITY CAP FOR WIND-POWERED SMALL POWER PRODUCTION FACILITIES; AND TO ELIMINATE THE 90%/110% PERFORMANCE BAND FOR WIND-POWERED SMALL POWER PRODUCTION FACILITIES IN THE MATTER OF THE PETITION OF ROCKY MOUNTAIN POWER FOR AN ORDER REVISING CERTAIN OBLIGATIONS TO ENTER INTO CONTRACTS TO PURCHASE ENERGY GENERATED BY WIND- POWERED SMALL POWER GENERATION QUALIFYING FACILITIES f,. IN THE MATTER OF THE PETITION OF AVISTA CORPORATION FOR AN ORDER REVISING AVISTA CORPORATION'S OBLIGATIONS TO ENTER INTO CONTRACTS TO PURCHASE ENERGY GENERATED BY WIND-POWERED SMALL POWER GENERATION FACILITIES BEFORE ) ) CASE ) ) ) ) ) ) ) ) ) ) CASE ) ) ) ) ) ) ) ) CASE ) ) ) ) ) ) NO. IPC-E-07-03 NO. - ...- 0"f-07 NO. AVU-E-07-02 PREHEARING CONFERENCE COMMISSIONER MACK A. REDFORD (Presiding) COMMISSIONER MARSHA H. SMITH COMMISSIONER JIM KEMPTON PLACE:Commission Hearing Room 472 West Washington Boise, Idaho DATE:December 11, 2007 VOLUME I - Pages 1 - 42 CSB REPORTING Constance S. Bucy, CSR No. 187 23876 Applewod Way * Wilder, Idaho 83676 (208) 890-5198 * (208) 337-4807 Email csb~heritagewifi.com. . . 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 . 25 1 APPEARANCES 2 3 For the Staff:Scott Woodbury Esq. Deputy Attorney General 472 West Washington Boise, Idaho 83720-0074 Barton L. Kline, Esq. Idaho Power Company Post Office Box 70 Boise, Idaho 83707-0070 Jordan Whi te , Esq. Rocky Mountain Power 201 S. Main Street Suite 2300 Salt Lake City, Utah 84111 Michael G. Andrea, Esq. Avista Corporation 1411 E. Mission Ave., MSC-23 Spokane, Washington 99202 RICHARDSON & 0' LEARY by Peter J. Richardson, Esq. Post Office Box 7218 Boise, Idaho 83702 William M. Eddie, Esq. Advocates for the West 610 SW Alder Street Suite 910 Portland, Oregon 97205 Rich Rayhill Ridgeline Energy, LLC 720 West Idaho Street Suite 39 Boise, Idaho 83702 Glenn Ikemoto Idaho Windfarms, Inc. 672 Blair Avenue Piedmont, Calif. 94611 4 5 For Idaho Power: 6 7 8 For Rocky Mountain Power: 9 For Avista Corporation: For Exergy DevelopmentGroup of Idaho: For Renewable Northwest Proj ect & NW Energy Coalition: For Ridgeline Energy: For Idaho Windfarms: CSB REPORTING Wilder, Idaho 83676 APPEARANCES . . 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 . 25 1 A P PEA RAN C E S (Continued) 2 3 For Cassia Gulch Wind Park & Cassia Wind Farms & Intermountain Wind: McDEVITT & MILLER by Dean J. Miller, Esq. Post Office Box 2564 Boise, Idaho 83701-2564 Gerald Fleischman 11535 West Hazeldale Court Boise, Idaho 83713 Brian D. Jackson Renaissance Engineering & Design 2792 Desert Wind Road Oasis, Idaho 83647-5020 M.J. Humphries Blue Ribbon Energy, LLC 2630 Central Avenue Idaho Falls, Idaho 83406 4 5 For Gerald Fleischman: 6 7 8 For Renaissance Engineering & Design: 9 For Blue Ribbon Energy: CSB REPORTING Wilder, Idaho 83676 APPEARANCES . . . 1 BOISE, IDAHO, TUESDAY, DECEMBER 11, 2007, 9:00 A. M. 2 3 4 COMMISSIONER REDFORD: This is the Idaho 5 Public Utili ties Commission. My name is Mack Redford and 6 I'm the Chairman of this hearing. Seated to my left is 7 Marsha Smith, Commissioner, and to my right is Jim 8 Kempton, Commissioner. We are here on a prehearing 9 conference as governed by Rule 211 of the Idaho Public 10 utilities Rules of Procedure and I would remind the 11 parties that this hearing pursuant to the Rule is for the 12 purpose of formulating or simplifying the issues 13 contained in sessions of fact or identification of 14 documents to avoid unnecessary proof, scheduling 15 discovery, et cetera. 16 The cases we're involved with are Case 17 No. IPC-E-07-03 which involves Idaho Power's petition to 18 increase the public rate eligibility cap; Case No. 19 PAC-E-07-07 in the matter of the petition of Rocky 20 Mountain Power; Case No. AVU-E-07-02 in the matter of the 2 1 petition of Avista Corporation for its order regarding 22 obligations to enter into contracts to purchase energy 23 generated by small wind developers. 24 First of all, I'd like to note for the 25 parties that this hearing is a prehearing conference only CSB REPORTING Wilder, Idaho 83676 1 COLLOQUY . . . 1 and it's not for the purpose of arguing the merits of the 2 various cases. I would like to note and for the record 3 take the appearance of the parties. 4 MR. WOODBURY: Scott Woodbury, Deputy 5 Attorney General, for Commission Staff and I would 6 indicate I have spoke this morning with Michael Andrea, 7 counsel for Avista, and he is enroute. There were fog 8 problems in Spokane and so he'll be late to the 9 hearing. 10 COMMISSIONER REDFORD: Okay. Sir? 11 MR. KLINE: Yes, I'm Bart Kline appearing 12 on behalf of Idaho Power Company. 13 COMMISSIONER REDFORD: Thank you. 14 MR. EDDIE: William Eddie here on behalf 15 of Renewable Northwest Proj ect and Northwest Energy 16 Coalition. 17 MR. MILLER: Thank you, Mr. Chairman. 18 Dean J. Miller of the firm McDevitt & Miller appearing on 19 behalf of Cassia Wind and John Deere Renewables in the 20 Idaho Power case and on behalf of Intermountain Wind in 21 the Rocky Mountain Power case. 22 MR. WHITE: Jordan White on behalf of 23 Rocky Mountain Power. 24 25 MR. RICHARDSON: Peter Richardson, Mr. Chairman, on behalf of Exergy Development Group of Idaho, CSB REPORTING Wilder, Idaho 83676 2 COLLOQUY . . . 1 Inc. We're a party in all three dockets. 2 COMMISSIONER REDFORD: Thank you. I 3 noticed that there are other people listed as parties, 4 Renewable Northwest Proj ect and that is 5 MR. EDDIE: That's me. 6 COMMISSIONER REDFORD: Okay, thank you. 7 I'm just trying to get everything straight. Ridgeline 8 Energy, LLC? No one appearing for Ridgeline? Idaho 9 Windfarms? Would you like to come up and take a seat, 10 sir? 11 MR. IKEMOTO: Thank you. 12 COMMISSIONER REDFORD: And you're Glenn 13 Ikemoto? 14 MR. IKEMOTO: Yes. 15 COMMISSIONER REDFORD: Okay, and Avista 16 Corporation, he's on his way. Snake River Alliance? No 17 one appearing for Snake River. Gerald Fleischman? 18 MR. FLEISCHMAN: I'm over here. 19 COMMISSIONER REDFORD: Okay. Renaissance 20 Engineering? Blue Ribbon Energy? And you are, sir? 21 22 MR. HUMPHRIES: M.J. Humphries. COMMISSIONER REDFORD: Thank you. INL 23 Biofuels, we received a letter from INL that states that 24 they are not able to attend, but the statement, I 25 believe, urges the Commission to approve the contracts CSB REPORTING Wilder, Idaho 83676 3 COLLOQUY . . . 1 which have previously been entered into in all of these 2 cases. That is the total number of parties. I note that 3 Mr. Richardson's client is appearing in all the cases; is 4 that correct? 5 MR. RICHARDSON: That's correct, 6 Mr. Chairman. 7 COMMISSIONER REDFORD: From a procedural 8 standpoint, I would like to ask Mr. Woodbury to give us, 9 give the Commission, a procedural update on where we are 10 in this case. 11 MR. WOODBURY: Thank you, Mr. Chairman. 12 This case has a long background. It's almost like long 13 ago and far away in a distant galaxy, but this matter was 14 last before the Commission a few weeks ago as a matter on 15 the agenda for a stipulation that had been presented in 16 the three dockets by way of resolution and it appeared to 17 the Commission at that time that there was not full 18 support for the stipulation, and so as a result, there 19 were some discussions in the decision meeting and the 20 Commission set this matter for this prehearing conference 21 today. 22 I could indicate to the Commission that 23 significant changes have occurred since last time it was 24 before you, that looking at the notice of parties in the 25 three dockets, with the exception of Brian Jackson who I CSB REPORTING Wilder, Idaho 83676 4 COLLOQUY . . . 1 haven't talked to and nobody has been able to get ahold 2 of, the stipulation has either been signed, parties have 3 indicated that they will sign or that they support but 4 can't sign and so the sole, I guess, outlier here in the 5 three dockets is Exergy Development Group of Idaho and 6 it's my understanding in talking to Bart Kline, and I'm 7 sure the others, is that we hope that the Commission 8 hasn't taken the stipulation off the table because it's 9 the intent and preference of those that have signed the 10 stipulation and expressed support for it that it be 11 considered by the Commission as a resolution of the wind 12 integration issue in the three dockets. 13 COMMISSIONER REDFORD: Thank you, 14 Mr. Woodbury. I can assure you that the agreements or 15 stipulations have not been taken off the table. We are 16 in a position right now as far as all three cases as to 17 the -- to their cases and based upon the stipulation, we 18 would rule that those cases are fully submitted as to the 19 parties that have executed them. It's my position that 20 once these cases have been fully submitted, it's now our 21 responsibility to review the contracts and approve them 22 or not approve them depending on what the Commission 23 determines, so it leaves one issue and that is the issue 24 of Exergy. 25 Oh, first of all, as to the parties that CSB REPORTING Wilder, Idaho 83676 5 COLLOQUY . . . 1 have not appeared or participated, I'm not going to do 2 anything further with those cases or their comments 3 because I believe the cases are fully submitted and they 4 had an opportunity to appear and participate and 5 apparently they decided they didn't want to, so as far as 6 the -- and at the last hearing, Mr. Richardson on behalf 7 of Exergy complained and reraised his concerns with 8 regard to the contract and the method in which the rates 9 had been established. I believe, Mr. Richardson, it was 10 your position that we shouldn't just take the rates as 11 presented without further testimony or further 12 proceedings to make further determination as to the 13 make-up of those rates and costs; is that a fair 14 statement? 15 MR. RICHARDSON: Yes, Mr. Chairman. 16 COMMISSIONER REDFORD: Well, in that case, 17 Mr. Richardson, since you were the remaining party that 18 does not agree, we believe it's your duty to move 19 forward, it's your burden of moving forward, and so what 20 we'd like to take up at this time is if you intend to 21 move forward, we'd like a little brief overview of what 22 it is you intend to produce, the witnesses you have, 23 further testimony, experts, consultants, et cetera, if 24 you would do so, please. 25 MR. RICHARDSON: Thank you, Mr. Chairman. CSB REPORTING Wilder, Idaho 83676 6 COLLOQUY . . . 1 It's our fundamental position, Mr. Chairman, that Idaho 2 Power has no wind integration costs at this time and that 3 to set a rate today based upon an assumption that has 4 proved to be incorrect for the last two-and-a-half years, 5 that is, that Idaho Power will have a lot of new wind 6 resources on line, would be in violation of this 7 Commission's obligation to set rates based upon known and 8 measurable changes or known and measurable issues. Idaho 9 Power's reply to our answer and motion did not address 10 that fundamental legal question. 11 We would intend if we go forward to 12 hearings, our expert witness is sitting next to me, 13 Dr. Reading, he will be testifying as to Idaho Power's 14 lack of wind integration costs and methodologies for 15 identifying future wind integration costs should they 16 actually materialize on Idaho Power's system. 17 COMMISSIONER REDFORD: And there would be 18 a sole witness? 19 MR. RICHARDSON: At this point we have 20 identified Dr. Reading and we are currently actively in 21 the process of identifying additional witnesses. Dr. 22 Reading is a Ph. D. economist and I think is qualified to 23 testify as to Idaho Power's wind integration costs or 24 lack thereof. 25 COMMISSIONER REDFORD: Will you be CSB REPORTING Wilder, Idaho 83676 7 COLLOQUY . . . 1 cross-examining any of the parties i witnesses or 2 statements? 3 MR. RICHARDSON: I would like the 4 opportuni ty to do so, Mr. Chairman. 5 COMMISSIONER REDFORD: Well, I'm trying to 6 get a handle on the breadth of the hearing. 7 MR. RICHARDSON: Mr. Chairman, one of our 8 fundamental concerns is that the settlement stipulation 9 was, is based solely on Idaho Power i s view of Idaho 10 Power's wind integration costs and it i S our hope that the 11 Commission will ask its Staff to take a critical look at 12 those numbers and present a new look at this issue. It IS 13 a very complex case and for the Commission to rely on one 14 party who has an interest in the outcome of the 15 proceeding without looking at or inviting or actually 16 requiring the Staff and other parties to put on a case 17 showing what their view of Idaho Power's and the other 18 utilities i wind integration costs is falling short of our 19 obligations to set rates that are fair, just and 20 reasonable based upon known data. 21 COMMISSIONER REDFORD:I understand that 22 and we appreciate what you've said and our obligation, 23 but the matter, however, as to the other parties has been 24 submitted on a stipulation which has its foundation in 25 the comments and documents which have been previously CSB REPORTING Wìlder, Idaho 83676 8 COLLOQUY .1 filed. Having said that, however, we have no problem in 2 granting you full access to the parties for further 3 cross-examination.I am simply trying to get a handle 4 on -- and having said that, I want to remind everyone 5 that while the case has been fully submitted, it has -- 6 it's our obligation now to make a determination as to 7 whether we accept those contracts or not and to say that 8 they are -- I can't tell you whether the contracts will 9 be approved as written and as stipulated to and there may 10 be some admonition as to changes we want. 11 I would remind all the parties that this 12 is a long-term contract and I'm sure everyone appreciates.13 that once you i ve signed the contract, notwithstanding 14 what happens in the next 20 years, that you i re bound by 15 that contract. I don't have to tell you that, I i m sure, 16 and 11m sure that the contract basis for all of you has 17 been thoroughly evaluated from a financial standpoint and 18 you believe that the numbers contained therein are fair 19 and for many can be used for the purpose of gaining 20 long-term financing. That i s just Mack Redford on where 21 you are as to your contracts, and I i m sure there is no 22 misunderstanding that the term of the contract is 20 23 years, so we i re at a point right now where I would like 24 to have a little further explanation, if I could,.25 Mr. Richardson, you intend to call -- is it Reedy, Dr. , CSB REPORTING Wilder, Idaho 83676 9 COLLOQUY .1 Reedy? 2 MR. RICHARDSON: Dr. Reading. 3 COMMISSIONER REDFORD: You're going to 4 have Dr. Reading. Is he going to -- have you fi led " 5 prefiled testimony for Dr. Reading? 6 MR. RICHARDSON: No, Mr. Chairman, there's 7 not been a schedule for prefiling intervenor testimony 8 yet set in this docket. 9 COMMISSIONER REDFORD: Okay. Well, in the 10 event we decide to proceed to allow you to move forward, 11 we will either set that or we may in the alternative to 12 speed up this matter authorize you to present Dr. Reading.13 in person as opposed to prefiling testimony.I think one 14 of the things that needs to be expressed as well which is 15 a concern to the Commission, and I'm sure it i S a concern 16 to everyone, this matter has gone on inordinately long 17 and I i m sure that the Commission has to take some 18 responsibility for the length of this proceeding, but on 19 the other hand, I think some of the parties need to share 20 that and I realize and appreciate that everyone has been 21 struggling with integrated costs and how to determine 22 them and on what basis, so if we proceed further, we 23 would like to have from you a statement, if we could, as 24 to how you intend to present to move forward in this.25 matter, and so far I've heard you're going to present CSB REPORTING Wilder, Idaho 83676 10 COLLOQUY a . . . 1 Dr. Reading and that you mayor may not want to 2 cross-examine the parties and you've asked the Commission 3 Staff to reevaluate their position; is that ~hat you Ire 4 asking? 5 MR. RICHARDSON: That's correct, 6 Mr. Chairman. In terms of the settlement, I do need to 7 make a statement for the record. I learned late 8 yesterday afternoon from Mr. Woodbury that other parties 9 had executed or approved the settlement.I learned this 10 morning from Mr. Woodbury, he gave me a list of the 11 parties who had either signed on or indicated their 12 willingness to accept settlement and the Commission's 13 rules prohibit Staff from engaging in active settlement 14 agreements unless they involve all the parties. I was 15 not involved in any of those discussions and this morning 16 Mr. Woodbury stated that he hasn't had a chance to talk 17 to Mr. Jackson and in his discussions, he mentioned that, 18 my understanding, in talking with Mr. Kline from the 19 Company, so in terms of the new issues, the new landscape 20 in terms of all the other parties having signed the 21 settlement, indeed Exergy was an outlier because we were 22 not involved in those discussions. 23 COMMISSIONER REDFORD: Did you have a 24 question? 25 I do. Mr.COMMISSIONER SMITH: CSB REPORTING Wilder, Idaho 83676 11 COLLOQUY .1 Richardson, I would note that on June 27th, 2007, there 2 was a notice of Staff intent to engage in settlement 3 negotiations that did go to you. 4 MR. RICHARDSON: I received that notice, 5 Madam Commissioner, but I have not been involved in any 6 of these other settlement discussions the Staff has 7 apparently been engaging in and I believe the spirit of 8 that rule requires all parties to be apprised when Staff 9 is actively rounding up parties for settlement. We 10 weren't involved in this latest round. 11 COMMISSIONER SMITH: Do you have any 12 knowledge that Staff was actually engaged in those or.13 that they merely called people and were told that they , 14 had concluded they were going to sign? 15 MR. RICHARDSON: Well, the only indication 16 I have is that Mr. Woodbury called me yesterday and was 17 indicating who would sign. This morning in his opening ,18 statement he indicated he was actively calling people and 19 engaged in discussions with the Company. That sounds to 20 me like settlement discussions. 21 COMMISSIONER SMITH: Thank you, Mr. f 22 Chairman. 23 COMMISSIONER REDFORD: Well, I would beg 24 to differ with you just a little bit. I think that1.25 Mr. Woodbury and, of course, Mr. Woodbury can speak for CSB REPORTING Wilder, Idaho 83676 12 COLLOQUY , . . . 1 himself, but the purpose for Mr. Woodbury i s calls was to 2 get the position of the other parties who had not signed 3 on to the stipulation and it was for the purpose of 4 preparing for today' s hearing and I would let 5 Mr. Woodbury speak for himself as to what the content of 6 those discussions were and whether he was engaged in an 7 effort to gain further positions from the Company as to 8 the stipulation or what. Mr. Woodbury, can you let us 9 know? 10 MR. WOODBURY: Thank you, Mr. Chairman. I 11 would indicate that Staff made an attempt earlier on to 12 determine whether there was a possibility for settlement 13 and we came back and we had workshops in which all the 14 parties were provided notice and we participated in those 15 and Staff came back to the Commission indicating that it 16 didn i t appear that a settlement were possible, was 17 possible.It was Mr. Eddie on behalf of Advocates fot 18 the West that continued to pursue settlement in this 19 matter, contacting the parties, preparing the stipulation 20 documents, circulating them to the parties. 21 Staff didn't actually sign. Staff 22 provided a letter of support for the stipulation and so 23 as far as whether we were involved in the crafting of the 24 documents, that was the utilities and Mr. Eddie, and Mr. 25 Eddie can speak as to who other had involvement, but CSB REPORTING Wilder, Idaho 83676 13 COLLOQUY . . . / 1 Staff reviewed those documents. Staff was informed, I 2 guess, by its participation in this process since late 3 2005, felt that the settlement that was reached was very 4 close to where Staff felt we should wind up and so 5 Mr. Richardson feels like he i s been left out. We 6 provided an indication prior to the workshop that Staff 7 facilitated that we were going to engage in settlement 8 negotiations. We haven i t been meeting behind closed 9 doors with the utili ties or anybody else. 10 COMMISSIONER REDFORD: Okay, I think we've 11 worked that issue long enough. Mr. Richardson, I'd like 12 to know in the event that we rule that you can proceed 13 further, we'd like for you to outline and give us an 14 indication of what issues you intend to present as far as 15 you i re opposing the stipulation which contains the 16 outline and the framework for the settlement, what parts 17 of that are you intending to challenge? And the reason I 18 ask you this is just for the simple purpose of trying to 19 narrow, if we can, issues or is it your position that the 20 entire stipulation is bad and you want to challenge it 21 all? 22 MR. RICHARDSON: Well, as I noted earlier, 23 Mr. Chairman, it's our position that we need to set wind 24 integration rates based upon actual wind integration 25 costs. That will be an issue we will look at. We will CSB REPORTING Wilder, Idaho 83676 14 COLLOQUY . . . 1 look at how to set up a mechanism to identify those costs 2 and incorporate them into some sort of a variable wind 3 integration rate based upon actual wind integration 4 levels and new contracts and perhaps offering that to 5 existing contracts in exchange for concessions, so in 6 essence, Mr. Chairman, we will be looking at the full 7 breadth of what it costs to integrate wind into the 8 system, and I keep going back to the point that today we 9 don i t have wind integration costs and to set rates based 10 upon an assumption that we have eight or nine or 1,000 11 megawatts of wind on the system is fundamentally wrong 12 and we need to address that. 13 COMMISSIONER REDFORD:I understand you, 14 but can I state that notwithstanding the entirety of the 15 settlement, your purpose is to challenge the methodology 16 by which the rates were set and make a determination as 17 to whether there are there is such a thing as 18 integrated costs and trying to determine what the 19 integrated costs are today? 20 MR. RICHARDSON: Both today and going 21 forward, set up a system, a mechanism so that we can have 22 a transparent process for identifying those wind 23 integration costs as Idaho Power actually does bring wind 24 on to its system. 25 COMMISSIONER REDFORD: So what you're CSB REPORTING Wilder, Idaho 83676 15 COLLOQUY . . . 1 telling me is that as to the other issues that may be 2 brought up in those stipulations, you i re not interested 3 in challenging those, you're simply wanting to challenge 4 those two other issues, the method of determining if 5 there are such -- there is such a thing as integrated 6 costs now and in the future and if there is an integrated 7 cost, what the costs and the elements contain because I'm 8 just trying to narrow things down. 9 MR. RICHARDSON: That i s a good summary, 10 Mr. Chairman. We would also be examining the assumptions 11 and inputs into the Idaho Power wind integration study 12 wi th an idea of checking for the reasonableness of those 13 as well and the other -- we're primarily focused on Idaho 14 Power, but we are parties in all three dockets. 15 COMMISSIONER REDFORD: How long do you 16 think that the proceeding that you're envisioning would 17 last? I mean, what i s the length? 18 MR. RICHARDSON: Dr. Reading could be 19 prepared to file prefiled testimony in four weeks, 20 Mr. Chairman. 21 COMMISSIONER REDFORD: And as far as the 22 hearing is concerned, how long do you think the hearing 23 will take? 24 MR. RICHARDSON: It depends upon, 25 Mr. Chairman, if other parties decide that they would CSB REPORTING Wilder, Idaho 83676 16 COLLOQUY 1 like to a take a critical look at Idaho Power's filing or.2 the other two utili ties' filings as well. I don i t think 3 a hearing would take very long. 4 COMMISSIONER REDFORD: Well, in terms of 5 setting the hearing date and its duration, I i m going to 6 ask everyone else what they think as to the time of the 7 hearing. Can you give me an estimate in days or half 8 days or hours or whatever? 9 MR. RICHARDSON: I would estimate two 10 days, Mr. Chairman, maybe two-and-a-half days. 11 COMMISSIONER REDFORD: Mr. Woodbury, do 12 you have any position on how long a hearing would take in 13 the event we do have one? And I want to ask you, if we.14 do have a hearing, would you be calling witnesses? 15 MR. WOODBURY: And I i m unclear as to 16 whether or not the Commission would be requiring prefiled 17 testimony by all parties in support of the stipulation. 18 If that is the case, Staff can file testimony within two 19 weeks and I don i t anticipate any cross of other parties, 20 and I think that we could get through Mr. Reading, cross 21 of him, wi thin maybe an hour, so I don't anticipate that 22 the hearing would go two days. I anticipate no more than 23 a day. It depends upon the length of Mr. Richardson IS 24 cross of other parties. ,25 COMMISSIONER REDFORD: If we do allow. CSB REPORTING Wilder, Idaho 83676 17 COLLOQUY l . . . 1 wri tten comments, of course, the parties have an 2 opportuni ty to file reply comments and we would in 3 order to shorten this, if there were four weeks to file 4 comments, I would suggest that probably we i d shorten the 5 reply time to try to get this matter set. 6 Mr. Ikemoto, do you have any idea what you 7 would be intending and how long you think the proceeding 8 would last? 9 MR. IKEMOTO: I think my concern, 10 Mr. Chairman, is that there's another case out there 11 modifying the calculation of avoided costs that has an 12 intersection with the issues in this case and to the 13 extent we can address those issues, we would want to 14 testify, yes. 15 COMMISSIONER REDFORD: Well, I can tell 16 you that I think that that case was the Idaho Power case 17 that discusses avoided costs. 18 MR. IKEMOTO: Yes, 07-15. 19 COMMISSIONER REDFORD: Okay. Well, that 20 case has been fully submitted and is ready for a 21 decision, so I don't think that would be raised at the 22 next hearing; however, if there are tangential issues 23 that come up as a result of the other hearing that might 24 impact that, certainly, we would not be adverse to 25 hearing it, so would you concur that it would take less CSB REPORTING Wilder, Idaho 83676 18 COLLOQUY . . . 1 than two days or more? 2 MR. IKEMOTO: Yes. 3 COMMISSIONER KEMPTON: Mr. Chairman, I'd 4 like to ask a couple of questions, if I could, that might 5 focus on some of the answers to the questions you're 6 asking. Mr. Richardson, Idaho Power submitted their 7 report addendum that is a part of the record. Did you 8 participate in the work sessions from which that addendum 9 was developed? 10 MR. RICHARDSON: Yes, I did, 11 Mr. Commissioner, and if I could make amends here, if 12 Dr. Reading is the only witness, it's going to take less 13 than a day. 14 COMMISSIONER REDFORD: But you're the one 15 that controls that in terms of whether you want to 16 cross-examine some of the other parties ' witnesses. 17 MR. RICHARDSON: If the other parties are 18 just filing testimony saying that they think the 19 stipulation is a good thing, there's not going to be a 20 lot of cross-examination. 21 COMMISSIONER REDFORD: Okay. 22 COMMISSIONER KEMPTON: Mr. Chairman? 23 COMMISSIONER REDFORD: Yes. 24 COMMISSIONER KEMPTON: May I continue? In 25 those work sessions, were your points overruled by the CSB REPORTING Wilder, Idaho 83676 19 COLLOQUY . . . 1 workings of the group itself? 2 MR. RICHARDSON: The workshops were in the 3 nature of settlement negotiations and there was a robust 4 exchange of ideas, Mr. Commissioner, so in terms of were 5 my ideas overruled, my ideas certainly did not prevail 6 because here I am opposing the settlement, but I would 7 say that the Company was very cooperative and provided 8 information in the workshops and were productive in terms 9 of vetting some of the issues in Idaho Power's filing. 10 COMMISSIONER KEMPTON: Mr. Richardson, 11 when you asked Staff, what I would like to avoid in this 12 is having everybody go back to ground zero and start 13 developing cost estimates once again.I think there's 14 been a tremendous amount of work, not only with what 15 Idaho Power has done but in the region in general and 16 those have all addressed integration costs to include 17 integration costs for Bonneville Power Administration, so 18 that doesn't suggest that I am arguing against your 19 position, I am simply stating a fact. 20 It would be helpful if we confined your 21 areas of concern to the information that has been 22 developed as a result of these, of the work group in this 23 addendum report that Idaho Power gave, because if we can 24 focus where your concern is on specific information that 25 was brought into that, unless you want to provide the CSB REPORTING Wilder, Idaho 83676 20 COLLOQUY . . . 1 reason for rej ecting the information that was considered 2 in that group, I think on that basis we can probably 3 shorten this issue of who has to develop what kind of 4 information to present to the Commission. 5 I think a lot of that has been developed. 6 If you rej ect that information, if you're specifically 7 opposed to it, I think you should present the evidence on 8 which you base that conclusion. I don't see how we can 9 go back and regenerate a whole new cost data sheet and 10 come back and argue the positions from ground zero. 11 MR. RICHARDSON: Mr. Commissioner, we will 12 not start from ground zero. We will use the documents 13 that Idaho Power has presented as the launching point for 14 our presentation. 15 COMMISSIONER KEMPTON: So you're not 16 asking Staff to develop new information, you're willing 17 to use what's on the record now? 18 MR. RICHARDSON: We'll use what's on the 19 record now and either supplement it or cri tici ze it or 20 offer alternatives. 21 COMMISSIONER SMITH: Mr. Richardson, it 22 seems to me that there's a threshold question here that 23 maybe could save us a lot of trouble and that is your 24 posi tion is that the Commission is somehow legally 25 foreclosed from setting any kind of rate in the absence CSB REPORTING Wilder, Idaho 83676 21 COLLOQUY . . . 1 of wind penetration, do I have that right? 2 MR. RI CHARDSON : You do, Madam 3 Commissioner. 4 COMMISSIONER SMITH: Okay; so it seems to 5 me that what the Commission could do is just hit that 6 question straight on and give you an answer, whether we 7 agree with your position, in which case then we go to 8 hearing or whether we disagree with your position, in 9 which case you could go to the Supreme Court, so I guess 10 my question is what information do you think we need to 11 squarely face that question and provide an answer? 12 MR. RICHARDSON: I think you have the 13 information you need to fairly squarely face that 14 question in my answer to the joint settlement and motion 15 to accept answer out of time in which I set out the legal 16 argument relative to the ability of the Commission to set 17 rates based upon an assumed wind integration of several 18 mul tiple hundreds of megawatts when they do not exist. 19 COMMISSIONER SMITH: And this is the 20 posi tion that you stated was not responded to in the 21 filing of Idaho Power? 22 MR. RICHARDSON: That's correct. 23 COMMISSIONER SMITH: Mr. Kline, do you 24 feel a need to respond to Mr. Richardson's filing on that 25 issue? CSB REPORTING Wilder, Idaho 83676 22 COLLOQUY . . . 1 MR. KLINE: Well, to some extent, 2 Madam Commissioner, it is a little bit of a moving 3 target. I know that at the decision meeting 4 Mr. Richardson indicated that Idaho Power currently has 5 12 megawatts of wind operating on its system. That 6 number has increased substantially even since that early 7 November decision meeting and more wind is coming on all 8 the time. The Company has more than 300 megawatts of 9 contracts for wind resources, so to some extent I think 10 that we could augment the record to make sure that the 11 Commissioners understand what is coming down the pike and 12 whether or not Idaho Power will have wind integration 13 costs based on that increased amount of wind that is 14 coming on. 15 COMMISSIONER SMITH: Well, I have some 16 sympathy with Mr. Richardson's position that a contract 17 isn't something on line and occasionally in the past 18 contracts have not resulted in actual kilowatts being 19 delivered to Idaho Power's system. 20 MR. KLINE: Yes, Commissioner Smith. Of 21 the 200 megawatts of contracts, approximately 150 of them 22 belong to Mr. Richardson's client, so at this point he 23 certainly hasn't told us that he's not going to develop 24 those proj ects. We have every reason to believe that 25 they will move forward, but it seems like a very CSB REPORTING Wilder, Idaho 83676 23 COLLOQUY . . . 1 difficul t position for them to be saying that we 2 shouldn't rely on those resources coming on line. 3 COMMISSIONER SMITH: Well, I would 4 appreciate suggestions from either Mr. Richardson, 5 Mr. Kline or anyone else on how to get this updated 6 information. Could it be in the nature of a stipulation 7 of facts by the parties as to what's on line as of the 8 date of filing, what's contracted as of the date of 9 filing so that the Commission could have the updated 10 facts in front of us to, I think, answer what I see as a 11 preliminary question of whether we have the impediment 12 argued by Mr. Richardson or whether we don't? 13 MR. KLINE: I certainly could put together 14 a stipulation of the wind, the status of the various wind 15 contracts and wind resources on our system and the 16 on-line dates, all of that kind of information. I can't 17 imagine that Mr. Richardson would obj ect to the facts 18 that we would present, but we could get you a stipulation 19 tomorrow. 20 COMMISSIONER SMITH: Well, my whole point 21 of this exercise would be that if the Commission 22 disagrees with Mr. Richardson's position, there's no 23 point to go forward and subj ect everyone to a hearing. 24 If we agree, however, then it's a different ball game and 25 maybe we ought to answer that question first before CSB REPORTING Wilder, Idaho 83676 24 COLLOQUY . . . 1 people go to a lot of work. 2 COMMISSIONER REDFORD: Mr. Kline, you 3 stated that you had 12 megawatts on line? 4 MR. KLINE: Actually, it's considerably 5 more than that now. 6 COMMISSIONER REDFORD: How much more? 7 MR. KLINE: On line right now about 120 8 well, on line right now or by the end of this month, on 9 line about 120 megawatts, another 80 megawatts under 10 construction right now and another 200 that are 11 contracted and for which we have no reason to believe 12 they won't come on line when they say they're going to. 13 A number of those contracts got caught up in the 14 integration, transmission issue down in the Twin Falls 15 area. Now that this Commission has resolved that issue, 16 they seem to be moving forward. 17 COMMISSIONER REDFORD: Have you forecasted 18 into the future how many megawatts you will have in, say, 19 five years? 10 years? 20 years? 20 MR. KLINE: We have not, Commissioner 21 Redford. A lot of that depends on the economics of the 22 wind development industry. I think there are certainly 23 lots of indication that there will be more wind developed 24 in Idaho, but at this point I don't think we have any 25 further proj ections of what it would be. Mark Stokes is CSB REPORTING Wilder, Idaho 83676 25 COLLOQUY . . . 1 here with me and Mark is in our planning department at 2 Idaho Power and do you have any better information? 3 MR. STOKES: Just for information, in our 4 integrated resource planning process, we do not forecast 5 what will come to us through PURPA because it is an 6 unknown to us, so we don't attempt to forecast that. 7 COMMISSIONER REDFORD: What was the amount 8 of power on your system from wind farms that was used to 9 develop your integrated costs? 10 MR. STOKES: We looked at several 11 pepetration levels. In the initial study, we looked at 12 300 megawatts, 600 megawatts, 900 megawatts and 1,200 13 megawatts. 14 COMMISSIONER REDFORD: And I believe in 15 your report you said your system could not handle 1,200 16 megawatts? 17 MR. STOKES: Yes, that's correct. In the 18 resul ts of the initial study, the modeling that we did 19 went haywire when we got up to that high of a penetration 20 level, so in the continuation of work that we did to 21 prepare the report addendum, we dropped the 1, 200 22 megawatt level from consideration. 23 COMMISSIONER REDFORD: So your integrated 24 cost was based upon how many megawatts? 25 MR. STOKES: The cost figure that we CSB REPORTING Wilder, Idaho 83676 26 COLLOQUY . . . 1 presented is based on an interpolated result between 300 2 megawatts and 600 megawatts that were a result of the 3 study and it was interpolated based on the amount of wind 4 that we expect to have on line based on what's already on 5 line and that we have signed contracts for. 6 COMMISSIONER REDFORD: And your system has 7 the capacity to take 600 megawatts? 8 MR. STOKES: We believe that 600 may be 9 approaching the upper limit of what we we believe the 10 upper capability of our current system to be somewhere 11 between the 600 and 900 megawatt level. 12 COMMISSIONER REDFORD: Just so I'm 13 straight, you said you interpolated and interpolate can 14 be a variety of different things. I'm not going to 15 consider interpolation because I don't know how you did 16 that, but it's safe to say that your creation of the 17 information was based upon somewhere between 300 and 600 18 megawatts coming on to your system for which you have 19 capaci ty; is that correct? 20 MR. STOKES: Yes. Just to clarify, it's 21 generally understood that the higher the penetration 22 level goes the higher the integration cost is. 23 COMMISSIONER REDFORD: And have you 24 calculated the cost to replace the power in the event the 25 variable wind generators or that the wind generators CSB REPORTING Wilder, Idaho 83676 27 COLLOQUY . . . 1 would not be able to supply? 2 MR. STOKES: I f the proj ects were not to 3 be constructed? 4 COMMISSIONER REDFORD: No, if they 5 promised ten megawatts and only gave you eight, then your 6 integrated cost would be based then on what you'd have to 7 pay to buy that power or generate that power; right? 8 MR. STOKES: Mr. Chairman, the integration 9 cost comes in the form of the amount of regulating 10 reserves that we have to hold on our system to account 11 for the flexibility in that wind. 12 COMMISSIONER REDFORD: You're talking 13 about hydro? 14 MR. STOKES: Yes, we modeled our Hells 15 Canyon complex to come up with the results. 16 COMMISSIONER REDFORD: And was your 17 regulating cost based upon the cost you would lose on 18 those hydro projects if you had to supplement the wind 19 generation? 20 MR. STOKES: Yes, exactly. 21 COMMISSIONER REDFORD: I'm getting far 22 afield and I shouldn't do that. I think to wind this up, 23 the Commission is going to take all these considerations 24 together and we're going to make a decision very soon: 25 one, as to whether this case is fully submitted, CSB REPORTING Wilder, Idaho 83676 28 COLLOQUY . . . 1 notwithstanding Mr. Richardson's position, or we will 2 after we've heard all the people, unless anyone has 3 anything else to present, we've heard that the hearing, 4 if there is one, is going to be based upon the testimony 5 of one witness and possibly the cross-examination of some 6 other witnesses and there will be prefiled testimony by 7 Dr. Reading and in the event we have a hearing, everyone 8 else will have an opportunity to have a shortened period 9 for reply comments. 10 It seems to me that your reply comments 11 probably are mostly contained in your prefiled statements 12 or the testimony and also your comments, so I think -- I 13 can't believe that we would have more than a day of this 14 hearing, but, of course, what we will do is reserve the 15 right to, if it goes over to the next day, we'll hold 16 that day open. I would -~ as far as the narrowing of the 17 issues, we will make a ruling as to what the issues are 18 if we decide to allow this to go further based upon what 19 you've said, Mr. Richardson. I want to make sure that 20 you understand what it is I'm saying, and I'm sure you 21 do, about it's your duty to move forward. 22 MR. RICHARDSON: I understand, 23 Mr. Chairman. 24 25 COMMISSIONER REDFORD: Okay. I don't mean to lecture you on that, and for others in the room, you CSB REPORTING Wilder, Idaho 83676 29 COLLOQUY . . . 10 1 would have the opportunity after Mr. Richardson presents 2 his case then to cross-examine Mr. Reading or present 3 further evidence by way of rebuttal. I don't think that 4 there is anything else to go -- yes, Mr. Miller? 5 MR. MILLER: Mr. Chairman, I would like 6 the opportunity just to make a brief statement for the 7 record, but I don't want to interrupt the flow of your 8 discussion, so just before the hearing is concluded, I . 9 would like just an opportunity for a brief statement. COMMISSIONER REDFORD: Thank you, and 11 you'll have the opportunity to do that, so that we can 12 kind of sum up, I just want to tell you where we're 13 14 going. We're going to make first a threshold determination as to whether or not the cases are fully 15 submi tted without regard to Mr. Richardson's client's 16 position, and in that case, the matter would be 17 determined on what's been presented to the Commission to 18 date. 19 Second, we've established that 20 Mr. Richardson will have the burden of moving forward, 21 which for everyone that means he has the obligation to 22 present his evidence first. We've established that the 23 hearing will probably take, if we have a hearing, it will 24 be one day with the possibility of going into another day 25 and we will also issue in our Order based upon what we've CSB REPORTING Wilder, Idaho 83676 30 COLLOQUY . . . 10 1 heard today what the narrow issues are, and Ilm very 2 serious, the Commission is very serious, in making sure 3 that if we do have a hearing it will be tightly defined 4 as to what's going on, so when you're preparing, whatever 5 you're preparing, make sure you stick to that prehearing 6 Order which we'll put out and we'll try to get that 7 information out to you right away by way of Order. 8 I don't have anything further right now. 9 Mr. Miller? MR. MILLER: I just wanted to briefly make 11 a statement for the record which is this: that in 12 evaluating a complex settlement such as this, parties 13 14 have to take into account a variety of considerations and John Deere has done that and based on that believes that 15 the overall end result is reasonable, and as you noted, 16 it takes an important step in restarting the PURPA 17 program in Idaho. Having said that the overall result is 18 reasonable should not, though, be interpreted necessarily 19 as an agreement or that the methods used to arrive at the 20 overall result are reasonable. 21 Specifically, it should not be deemed to 22 consti tute an acknowledgment by John Deere of the 23 validity or invalidity of any particular method, theory 24 or principle of regulation or cost recovery, nor should 25 it be deemed that the principles or theories arrived at CSB REPORTING Wilder, Idaho 83676 31 COLLOQUY . . . 1 in the stipulation are appropriate for resolving issues 2 in any other further proceedings in the future, so in 3 short, John Deere just wants to make clear that it's 4 supporting the overall result, but is not expressing an 5 opinion on the validity of the methods used to arrive at 6 that result and the position of Intermountain Wind in the 7 PacifiCorp case would be the same. 8 COMMISSIONER REDFORD: Thank you very 9 much, Mr. Miller, for that kind of fuzzy statement, warm 10 fuzzy statement. 11 MR. MILLER: The best we could do. 12 MR. IKEMOTO: Mr. Chairman? 13 COMMISSIONER REDFORD: Yes, Mr. Ikemoto. 14 MR. IKEMOTO: I just would like to express 15 that my concern is that we're really dealing with a 16 single issue here, how do you account for uncertainty 17 wi thin the framework of PURPA and we have here that the 18 issue has been bifurcated and all these proceedings deal 19 wi th how do we account for uncertainty on the cost side, 20 the operational side, and we're coming to a conclusion of 21 whether or not to include the cost of integration, which 22 is the cost of uncertainty, on the cost side. The other 23 proceeding, 07-15, deals with whether we should also 24 include the cost of uncertainty on the benefit side in 25 terms of capturing it wi thin avoided costs, and I'm very CSB REPORTING Wilder, Idaho 83676 32 COLLOQUY . . . 1 uncomfortable that we have this overriding issue split up 2 into pieces and you're saying that 07-15 is fully 3 submitted and yet -- I guess I don't know how to express 4 that.I'm uncomfortable that this thing got divided into 5 two pieces.I don't think it belongs in two pieces. 6 COMMISSIONER REDFORD: Thank you, 7 Mr. Ikemoto, and rest assured that the Commission has 8 taken that into consideration and we certainly want to 9 make sure that there is -- regardless, the result is that 10 one issue of avoided costs and the other issue of 11 integrated costs don't somehow get wrapped into each 12 other.I think we see this as in the previous case as 13 one on avoided costs which are historically set in a 14 certain way and then integrated costs which is a separate 15 item for which I like to say that integrated costs are 16 the costs for balancing the system in the event that 17 there's a shortfall in wind production, so we have been 18 grappling with this as well and I think we're cogni zant 19 of everything that's going on, but I understand and I 20 hear what you're saying. 21 Is there anyone else that would like to 22 comment before we adjourn? Yes, sir, Mr. Eddie. 23 MR. EDDIE: Mr. Chairman, on behalf of 24 Renewable Northwest Proj ect and Northwest Energy 25 Coalition, I just wanted to make a couple of brief CSB REPORTING Wilder, Idaho 83676 33 COLLOQUY . . . 1 statements. This issue is a tremendously intellectually 2 interesting issue and one that's very difficult to stop 3 talking about. Lots of things come up. Lots of things 4 get wrapped into the discussion. We had extensive 5 workshops. We worked very hard in those workshops and do 6 a settlement to get where we are, and part of the purpose 7 for my clients in joining the settlement and promoting 8 the settlement was to end the discussion, to try to move 9 forward to the planning process, the integrated resource 10 planning process, and to avoid a hearing and it's a 11 little bit disconcerting to anticipate a hearing where 12 I'm not sure what exactly will be discussed or promoted 13 14 from Mr. Richardson's client. Part of the reason that we're a little bit 15 alarmed by that is that we are now deeply engaged in the 16 Bonneville Power Administration's wind integration rate 17 case which is ongoing. It's likely to be a protracted 18 and complicated case as well and it will be a burden for 19 my clients and our expert to unravel from that case and 20 come back into this case to perhaps rebut testimony from 21 Exergy or others and so I would like to join in 22 supporting Commissioner Smith's concept of addressing 23 this threshold issue.Is there a cost today? We 24 certainly believe that it is reasonable to say that there 25 is a cost today based on the wind that's on the system CSB REPORTING Wilder, Idaho 83676 34 COLLOQUY . . . 1 and the wind that's under Commission-approved contracts 2 and address that discreet issue and move forward from 3 there. If the Commission agrees with my client, with the 4 Company, I think a hearing would be unnecessary. Thank 5 you. 6 COMMISSIONER REDFORD: Thank you. Any 7 other comment? Yes, sir. 8 MR. RAYHILL: Mr. Chairman, my name is 9 Rich Rayhill. I'm with Ridgeline Energy. 10 COMMISSIONER REDFORD: Why don i t you move 11 up here and use this microphone. 12 MR. RAYHILL: My name is Rich Rayhill. 13 I'm with Ridgeline Energy and I would just like the 14 record to reflect that I showed up. I apologize for 15 being late. 16 COMMISSIONER REDFORD: Thank you. We 17 accept your apology. Yes, sir. 18 MR. ANDREA: Mr. Chair, Commission, my 19 name is Mike Andrea. I'm with Avista. I apologize for 20 having walked in late, our flights were a little bit 21 delayed this morning. I've got Mr. Kalich with me as 22 well and I wanted to make sure that you were aware that 23 we are here this morning and available to answer any 24 questions you might have for Avista. I also wanted to 25 voice my support for the settlements that we've entered CSB REPORTING Wilder, Idaho 83676 35 COLLOQUY . . . 1 into. As Mr. Eddie has expressed and others have 2 expressed, a great deal of work has gone into those and 3 we think they are a good result in this case. Thank 4 you. 5 COMMISSIONER REDFORD: Thank you. Of 6 course, you're aware that your tardiness will be severely 7 punished. 8 MR. ANDREA: Excuse me? 9 COMMISSIONER REDFORD: Your tardiness will 10 be severely punished. 11 MR. ANDREA: I would expect nothing less. 12 Thank you, sir. 13 MR. JACKSON: My name is Brian Jackson. 14 I'm with Renaissance Engineering & Design.I also wanted 15 to apologize for being late. I just had one comment to 16 add and it's in conjunction with Mr. Ikemoto's comment. 17 I'm concerned from a ratepayer standpoint.I do 18 consul ting work for farmers and ranchers and small wind 19 developers that are in this category. As we get down to 20 the last detail of an integration cost issue, which is 21 certainly not inappropriate, we are losing a value part 22 of this equation for the ratepayers that wind brings, a 23 risk reduction in fuel prices and fuel costs and other 24 sources of energy that is completely not being accounted 25 for.I don't know how that could be accounted for to CSB REPORTING Wilder, Idaho 83676 36 COLLOQUY . . . 1 society or to the ratepayers, but as we get down to the 2 last detail on the integration itself and we get down to 3 the last detail on the avoided cost, there's really a 4 third component to society that I believe is really a 5 benefit to the ratepayers from a risk reduction 6 standpoint. 7 The wind is a natural resource that blows 8 across the state. It's there whether we capture it or 9 not and when Idaho is importing 80 percent of its fuel to 10 this state from outside its borders, some element of 11 capturing that energy wi thin the borders without any fuel 12 risk or other elements of deli very, if it can't be 13 accounted for, it should at least be acknowledged, I 14 guess. 15 COMMISSIONER REDFORD: Thank you. Without 16 putting words in your mouth, I think what you're saying 17 is that, notwithstanding the agreements, that one element 18 has not been addressed and that is the value of renewable 19 resources as opposed to non-renewable resources, so 20 you're not opposing the stipulation, you're just 21 reminding us that there should be something taken into 22 account; is that right? 23 MR. JACKSON: Yes, sir. My greatest 24 concern truly from an Idahoan standpoint and 25 multi-generational farming background is we're getting CSB REPORTING Wilder, Idaho 83676 37 COLLOQUY . . . 1 down to the last detail of accountability on what this 2 wind really is and if we end up with a result that 3 ul timately makes these proj ects not buildable because the 4 financial cost is too great, it's okay for the industry, 5 they'll move on to other states. Other states will get 6 these projects and I think that the risk to the Idaho 7 ratepayers of not developing these resources wi thin our 8 state for Idaho ratepayers is very high.I think the 9 Hells Canyon complex was one of the greatest benefits to 10 Idaho ever developed and it was capturing a natural 11 resource in the state for essentially Idaho ratepayers as 12 well as the others that are benefiting from that low cost 13 hydro resource. 14 I believe that wind today is the same 15 opportunity that we are facing and if we disregard it and 16 ultimately create a result that doesn't -- I mean, 17 everybody knows the costs are increasing dramatically for 18 every single energy resource, including wind.If we 19 don't develop that and it's developed for other 20 ratepayers in other states or it just simply doesn't get 21 developed in Idaho while it does get developed in other 22 states, I believe that is a loss to Idahoans. 23 COMMISSIONER REDFORD: Well, thank you 24 very much and I can share your concern.I believe that 25 is one of the reasons for the PURPA Act and this CSB REPORTING Wilder, Idaho 83676 38 COLLOQUY . . . 1 Commission is cognizant of exactly what it is you've said 2 and our decisions will surely include that type of 3 consideration. 4 I had one question of Mr. Kline. 5 Mr. Kline, in your last comment you offered to host a 6 workshop sometime in March. If we approve all these 7 agreements, what's the purpose for a workshop? 8 MR. KLINE: I think the offer to host the 9 workshop, Mr. Chairman, was in conjunction with the 07-15 10 case.I think we've workshopped this one just about as 11 much as we can workshop it. 12 COMMISSIONER REDFORD: So your workshop 13 would not include -- it would include avoided cost 14 issues, not integrated cost issues? 15 MR. KLINE: That's correct. We've built 16 into the settlement stipulation an ongoing series of 17 meetings, both informal and formal, to look at 18 integration costs on an ongoing basis, so we already have 19 that process built into the settlement stipulation. 20 COMMISSIONER REDFORD: Well, I think welve 21 worked this pretty much to death, and like Lewis Carroll 22 said, you begin at the beginning and end at the end and I 23 think we're at least approaching the end and the 24 Commission will take these matters into consideration and 25 on the abbreviated hearing that mayor may not take CSB REPORTING Wilder, Idaho 83676 39 COLLOQUY . . . 1 place. We share your concerns that for all of us, we 2 have to take some role in not getting the wind issues 3 resolved in a timely manner. I can express from the 4 Commission and I believe for others that we want the wind 5 integration. We want the use of renewable resources. 6 Presently the utilities provide to us on a voluntary 7 basis their renewable resource portfolio and we're very 8 mindful of that portfolio and whether or not we continue 9 it on a voluntary basis, I don't know. 10 We've established, the state has 11 established, an Energy Commission. The legislature has 12 developed an energy report through a committee in the 13 legislature and so we're taking all of these things into 14 consideration to the extent that we didn't have any 15 authori ty and we're constantly reviewing our role in 16 energy issues, being mindful that there are some things 17 we can do and a lot of things we can't do, so having said 18 that, if there's nothing to come before this hearing, we 19 will stand adjourned or recessed until if there is 20 another hearing and I want to thank all of you for 21 coming. I know we've all -- everyone has done a 22 tremendous amount of work. Being new on the Commission, 23 you've made it through your comments and through the 24 Staff i s comments able for me, one of the newcomers, to 25 understand this very complex issue of integrated costs CSB REPORTING Wilder, Idaho 83676 40 COLLOQUY . . . 10 11 1 and other costs and so I thank you for that, so hearing 2 nothing else, why, we will stand adj ourned. 3 (The Hearing adj ourned at 10: 05 a. m. ) 4 5 6 7 8 9 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CSB REPORTING Wilder, Idaho 83676 41 COLLOQUY . . . 20 21 22 23 24 25 1 AUTHENTICATION 2 3 4 This is to certify that the foregoing 5 prehearing conference held in the matter of Idaho Power 6 Company' s petition to increase the published rate 7 elegibili ty cap for wind-powered small power production 8 facilities, et cetera, commencing at 9:00 a.m., on 9 Tuesday, December 11, 2007, at the Commission Hearing 10 Room, 472 West Washington, Boise, Idaho, is a true and 11 correct transcript of said proceedings and the original 12 thereof for the file of the Commission. 13 14 15 16 (llD~ =5Å~~~~~ CONSTANCE S. BUCY Certified Shorthand Reporter #1 7 17 18 19 \\\1111\111"""i "'CE '"..' ..,.. C"'," A. r "'. '" " ..' r;"' ",ntH'''"" q~ ~ ~" ~ J ,..' -r A "1 v" ::' ~ ,,"'0 ' h 000" 1"-::: o~~. . ,1.1"'.. '-' ii- ~~ ..--;...=:~ ~;=0; i 't- : ~ "::~.A Of::- -;""u .~..0;' $~. 8 \. ~ ""1" ..:: ~t, .~~~~i.' \\"...... .'t, - ..::.-:?__-4'~ .~~;,I.Hhll\l\\\\\ ____~' ~~::''1,/ 4Ill io.f ..~ '.' .l~'~'¡I. -'" \,\\'"ÜUII,'l\I\ CSB REPORTING Wilder, Idaho 83676 42 COLLOQUY