20120531final_order_no_32560.pdf

Office of the Secretary
Service Date
May 31,2012
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )
CORPORATION’S APPLICATION FOR A )CASE NO.AVU-E-12-04
CERTIFICATE OF PUBLIC CONVENIENCE )
AND NECESSITY FOR ITS SOLAR )
GENERATING RESOURCE NEAR )ORDER NO.32560
RATHDRUM,IDAHO )
On April 20,2012,Avista Corporation filed an Application for a Certificate of Public
Convenience and Necessity (“CPCN”)pursuant to Idaho Code §6 1-526 through 6 1-528 and
IDAPA 31.01.01.112 seeking certification for its previously constructed 15 kW solar generation
test facility (“the Solar Facility”)in Kootenai County located near Rathdrurn,Idaho.
THE APPLICATION
Avista is a Washington corporation providing electrical service to customers in
northern Idaho and western Washington.Avista’s Application states that the Solar Facility
consists of sixty 250-watt poly-crystalline solar panels mounted in fixed arrays and connected
via inverters to the utility grid.The Solar Facility is located in one test block as part of a six-
block test complex directly adjacent to Avista’s natural gas combustion turbine generation site
near Rathdrum,Idaho.The Application further states that the Solar Facility is necessary both to
meet the demand for renewable resources created by “Avista’s Buck-a-Block”renewable energy
program and to provide information on the costs and benefits associated with solar energy
generation.
Because the Solar Facility is already constructed,no additional construction is
required at this time.Avista states that the total cost of construction was less than $80,000.
Avista insists that all costs above the market rate for electricity will be funded through the
“Buck-a-Block”program in accordance with Schedule 95 of Avista’s Idaho tariff.“Buck-a
Block”is a voluntary program that allows customers to purchase 300 kWh “blocks”of
renewable power through special assessments to their monthly bill.Avista does intend to
include investment in the Solar Facility in its rate base in future rate proceedings,but it expects
the effect of the Solar Facility on revenue requirements to be zero.
Although Avista applies for a CPCN “out of an abundance of caution,”Avista asserts
that a CPCN for the Solar Facility is not required under Idaho Code §61-526.Application at 2.
ORDER NO.32560 1
Avista maintains that the Solar Facility constitutes an extension of an existing plant within
territory already served.Avista does not appear to claim that the installation of solar generation
on the site of its existing natural gas combustion plant constitutes an increase of capacity of the
existing plant.
STAFF RECOMMENDATIONS
Based on its review of Avista’s Application and current Idaho tariff,Staff
recommended the Commission grant Avista’s request.Staff believes that the project complies
with the minimum statutory requirements found in Idaho Code §61-526 that:(1)the present or
future public convenience or necessity requires or will require the construction of the Solar
Facility;and (2)the Solar Facility will not interfere with the line,plant or system of another
public utility.’
As a preliminary matter,Staff believes a CPCN for the Solar Facility is required by
the Idaho Code §61-526.Section 61-526 states:
No...electrical corporation...shall henceforth begin the construction...of
a line,plant,or system...without having first obtained from the commission
a certificate that the present or future public convenience and necessity require
or will require such construction
Avista claims that the Solar Facility fits within a statutory exception to this baseline requirement
as an “extension within any city or county within which it shall have theretofore lawfully
commenced operation.”Id.Avista’s argument is that construction of a separate and distinct
solar generation facility on the same site where it currently operates a large natural gas
combustion generation facility and other smaller test facilities constitutes an extension of a pre
existing plant.Staff disagrees.The more practical construction of the statute’s extension
exceptions pertains to extensions of existing transmission lines or the like-for-like expansion of
capacity at an existing generation plant.Accordingly,Staff suggested the Commission treat the
distinct Solar Facility as a new facility under Section 61-526 and require a distinct CPC.
Staff notes that the 15 kW nameplate capacity of the Solar Facility is small with
respect to the total of both the capacity of Avista’s existing generation and customer demand.
Furthermore,this size is consistent with Avista’s “Buck-a-Block”program and Avista’s stated
Consideration of the potential for interference with other public utilities is made unnecessary in this case by the
location of the facility on a pre-existing certificated generation site,the territorial franchise granted to Avista as a
regulated utility,and the absence of any expansion of service area.
ORDER NO.32560 2
desire to gather trial data on the costs and benefits ot’solar generation.To that extent,the Solar
Facility is consistent with both present and future public convenience and necessity.
Staff also notes the de nunimus financial impact of the cost of the Solar Facility.The
reported costs of less than $80,000 are consistent with Avista’s assertion that the Solar Facility
will have zero effect on its revenue requirements.Stall helie es that the benefits of supporting
pre-existing renewable energy programs.combined with the negligible effect on Avista’s rate
base and zero impact on Avista’s revenue requirements.merit the issuance of a CPCN for the
Solar Facility.
Finally,given that the Solar Facility is already-constructed and has a de minimus
financial impact.Staff believes that a hearing pursuant to Idaho (ode 61—528 ‘involving the
financial ability and good foith of the applicant”is unnecessary under these circumstances.
Accordingly.Staff recommended the Commission act on its authority under IDAPA
3 1 .01 .01 .013 to deviate lI’om the rules of normal procedure when “compliance with them is
impracticable,unnecessary or not in the public interest”and to approve Avista’s Application for
a CPCN directly and without further process.
COMMISSION DISCUSSION AN!)FINDINGS
As a preliminar\matter,the Commission agrees with Staff that the Solar Facility
requires a distinct CPCN.3 he extension exceptions in Idaho (ode §61 —526 apply to extension
of existing facilities of the same nature as those already in existence.The construction of a new
generation facility,making use of a different method of generation.constitutes construction of a
new plant for purposes of Section 6 1-526.The fact that the new plant is located adjacent to an
existing plant site.although convenient,is merely incidental.Thus.as a new plant.Avista must
obtain a new CPCN.
The Commission also finds that the completed construction of the Solar Facility and
tie ninimus financial impact To Avista and its customers render a hearing under Idaho Code 61—
528 unnecessary.Pursuant to Rule 13.the Commission finds there is good cause to consider the
Application without a hearing.IDAPA 31 .01 .01 .013.
Finally,the Commission finds that the construction and operation of the Solar
Facility will provide necessary renewable generation resources consistent with Avista’s
previously approved “Buck-a-Block”program under Schedule 95.The Solar Facility also will
provide valuable information to Avista concernlng the costs and benefits of solar generation.
ORDER NO.32560
The Commission also finds that the facility can be operated with zero effect on Avista’s revenue
requirements.
CONCLUSIONS OF LAW
Avista Corporation is an electric corporation and public utility subject to the
regulatory jurisdiction of the Commission pursuant to Title 61 of the Idaho Code and the
Commissionts Rules of Procedure.IDAPA 31.01.01.000 el seq.
The Commission has jurisdiction over the specific issues presented in this matter
pursuant to Idaho Code **61-526 and 61-528.
We find that present and future public convenience and necessity require the
construction and operation ofthe 15 kW solar generation test facility in Kootenai County.
ORDER
IT IS HEREBY ORDERED that the Application of Avista Corporation for a
Certificate of Public Convenience and Necessity authorizing the construction and operation of a
15 kW solar generation test facility,to be located in Kootenai County,Idaho is approved.This
Certificate shall be assigned No.506.
THIS IS A FINAL ORDER.Any person interested in this Order (or in issues finally
decided by this Order)may petition for reconsideration within twenty-one (21)days of the
service date ofthis Order with regard to any matter decided in this Order.Within seven (7)days
after any person has petitioned for reconsideration any other person may cross-petition for
reconsideration.See Idaho Code §61-626.
ORDER NO.32560 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of May 2012.
ATTEST:
MACK A.REDFORD,COMMISSIONER
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MARSHA H.SMITH,COMMISSIONER
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Jean D.Jewell
Commission Secretary
O:AVU-E-I 2-O4bIdh
ORDER NO.32560 5