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HomeMy WebLinkAbout20071113notice_of_consolidated_prehearing_conference.pdfOffice of the Secretary Service Date November 13, 2007 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 IN THE MATTER OF THE PETITION OF ROCKY MOUNTAIN POWER FOR AN ORDER REVISING CERTAIN OBLIGATIONS TO ENTER INTO CONTRACTS TO PURCHASE ENERGY GENERA TED BY WIND-POWERED SMALL POWER GENERATION QUALIFYING FACILITIES TO ELIMINATE THE 90%/110% PERFORMANCE BAND FOR WIND- POWERED SMALL POWER PRODUCTION FA CILITIES IN THE MATTER OF THE PETITION OF VISTA CORPORATION FOR AN ORDER REVISING A VISTA CORPORATION' OBLIGATIONS TO ENTER INTO CONTRACTS TO PURCHASE ENERGY. GENERATED BY WIND-POWERED SMALL POWER GENERATION FACILITIES CASE NO. IPC-07- CASE NO. P AC-07- CASE NO. AVU-07- NOTICE OF CONSOLIDATED PREHEARING CONFERENCE the Idaho Public Utilities Commission has authority under the Public Utility Regulatory Policies Act of 1978 (PURP A) and the implementing regulations of the Federal Energy Regulatory Commission (FERC) to set avoided costs, to order electric utilities to enter into fixed-term obligations for the purchase of energy from qualifying facilities (QFs) and to implement FERC rules. On February 6, 2007, Idaho Power Company (Idaho Power) in Case No. IPC-07- 03 filed a Petition with the Idaho Public Utilities Commission (Commission) proposing a $10.72/MWh wind integration adjustment for reduction to the published avoided cost rates payable to wind QFs. In a report addendum filed with the Commission on October 31 , 2007, the NOTICE OF CONSOLIDATED PREHEARING CONFERENCE Company presents an updated wind integration cost of $7.92/MWh. On April 2, 2007, Avista Corporation (A vista) filed a Petition proposing a wind integration adjustment to published avoided cost rates of 12%; and for QFs agreeing to deliver output on a firm hourly schedule, a percentage reduction of 6%. On April 23 , 2007 , PacifiCorp dba Rocky Mountain Power (PacifiCorp) filed a Petition proposing a wind integration adjustment of $5.04 per MWh. All petitions contained additional elements and conditions, i., elimination of 90%1110% performance band; sharing of costs for wind forecasting services; and QF commitments to provide a "Mechanical Availability Guarantee" demonstrating physical capability and ability to generate at full output during 85% of the hours in a month. Parties of Record The following parties in Case No. IPC-07-03 requested and were granted intervenor status: Exergy Development Group ofIdaho LLC; Renewable NW Project and N. Energy Coalition; PacifiCorp dba Rocky Mountain Power; Ridgeline Energy LLC; Idaho Windfarms LLC; Cassia Gulch Wind Park LLC and Cassia Wind Farms LLC; Avista Corporation; Snake River Alliance; Gerald Fleischman; Renaissance Engineering & Design PLLC; Blue Ribbon Energy LLC; and INL Biofuels and Renewable Energy Technologies. The following parties in Case No. PAC-07-07 requested and were granted intervenor status: Intermountain Wind LLC; Exergy Development Group of Idaho LLC; Renewable NW Project and NW Energy Coalition; Idaho Windfarms LLC; Avista Corporation; and INL Biofuels and Renewable Energy Technologies. The following parties in Case No. A VU-07-02 requested and were granted intervenor status: Exergy Development Group of Idaho LLC; Renewable NW Project and NW Energy Coalition; Idaho Windfarms LLC; and INL Biofuels and Renewable Energy Technologies. Background In Case No. IPC-05-, Idaho Power s Petition to temporarily suspend its purchase obligations for wind generation, the Commission on August 4, 2005 stated Based on the record established in this case the Commission finds reason to believe that wind generation presents operational integration costs to a utility different from other PURPA qualified resources. We find that the unique supply characteristics of wind generation and the related integration costs provide a basis for adjustment to the published avoided cost rates, a calculated figure that may be different for each regulated utility. The NOTICE OF CONSOLIDATED PREHEARlNG CONFERENCE procedure to determine the appropriate amount of adjustment, we find, and the identification of what studies, if any, need to be performed to provide such a number is a matter appropriate for further proceedings. The record reflects that a wind integration study if required may take six months to develop. Idaho Power has requested a suspension period from six to nine months. Order No. 29839 p. 8. In reducing the cap for published rates for wind projects offering power on a non- firmed basis, we found that we had continuing authority to review PURP A rates in order to protect the public interest. 18 C.R. ~ 292.304(a)(l)(i), (c)(1); Order No. 29839 p. 9. recognized further that no utility is required to pay more than its avoided cost for QF purchases. PURPA ~ 210(b); Order No. 29839 p. 9. In commenting on our changing the published rate availability for certain wind QFs we stated We did not eliminate the utility s obligation to purchase from wind QFs, but we established greater administrative control of contracts during the period of our investigation. For wind QFs greater than 100 kW offering power on an unfirmed basis, the door to a purchase contract is not closed. For projects not qualifying for the published rate, individual negotiation of rates under an IRP based methodology is required. Order No. 29872 p. 10. Pursuant to Commission direction Idaho Power in conjunction with A vista and PacifiCorp and in consultation with the other parties scheduled and held four workshops (August , September 20, October 10, and November 18, 2005) and a settlement meeting (January 12 2006). The parties were unsuccessful in reaching mutual agreement on interim settlement issues. No additional meetings were scheduled until completion of the Company s integration study (estimated June 2006). See Phase II Workshop Final Report, January 31 , 2006. See also September 6, 2005 and November 7, 2005 Status Reports. In early 2007 Idaho Power, A vista and PacifiCorp filed integration studies and recommended wind integration adjustments. Case Nos. IPC-07-03 (2-16-07); A VU-07- (4-07); and PAC-07-07 (4-23-07). Workshops ensued. Efforts to obtain a comprehensive generic settlement were unsuccessful.The Commission on August 22, 2007 established comment deadlines to bring the matter to closure. The Commission was notified that Renewable Northwest ProjectlNW Energy Coalition had reached a settlement agreement in principle with NOTICE OF CONSOLIDATED PREHEARING CONFERENCE two of the three utilities and believed that an agreement in principle could be achieved with the third utility. Additional time was requested to complete settlement discussions, to solicit support from other parties and to prepare settlement documents. An additional scheduling Order was issued September 19, 2007. Further negotiation efforts resulted in settlement proposals with only limited support, i., the utilities, Renewable Northwest Project/NW Energy Coalition Idaho Windfarms LLC, and Commission Staff. Given two years of continued effort it appears unlikely to this Commission that the parties will be able to achieve resolution agreeable to all parties. That being said, however, a review of the filings reveals that the protracted process was not without constructive benefit. Studies have been prepared; underlying assumptions have been challenged; a greater understanding of wind integration is evident; and the learning curve has been reduced. To bring this matter to conclusion, we find it reasonable to set a prehearing conference of the parties to identify what issues remain; to determine at what points (if any) consensus exists; and to determine the scope and timeline of further proceedings. YOU ARE HEREBY NOTIFIED that a consolidated prehearing conference in Case Nos. IPC-07-, PAC-07-, and AVU-07-02 will COMMENCE AT 9:00 A. ON TUESDAY. DECEMBER 11. 2007 AT THE COMMISSION'S HEARING ROOM. 472 WEST WASHINGTON STREET. BOISE. IDAHO NOTICE OF CONSOLIDATED PREHEARING CONFERENCE DATED at Boise, Idaho this ATTEST:~ill~Je D. Jewell C mmlSSlon Secretary bls!N:IPC-07-03 _P AC-07-07 - A VU-O7-02 _ NOTICE OF CONSOLIDATED PREHEARING CONFERENCE r/. MARSHA H. SMITH, COMMISSIONER :.._ =--L....,---~. ~"