20150702Comments (2 Total).pdf

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u n o 23jjim.Ill 503.223.4544 Renewable
NorthwestJuly2,
RE:Case No.IPC-E-15-0l,In the Matter of Idaho Power Company’s Petition to
Modify Terms and Conditions of Prospective PURPA Energy Sales
Agreements;
Case No.AVU-E-15-Ol,In the Matter of Avista Corporation’s Petition to
Modify Terms and Conditions of Prospective PURPA Agreements;
Case No.PAC-E-15-03,In the Matter of the Petition of Rocky Mountain
Power for Modification of Terms and Conditions of PURPA Power Purchase
Agreements and for Modification of Its Avoided Cost Methodology
Renewable Northwest appreciates the opportunity to file public
comment on applications filed by Idaho Power Company,Avista Corporation,
and Rocky Mountain Power (collectively,the “Utilities”)to tower the standard
contract term for Qualifying Facilities (“QFs”)under the Public Utility
Regulatory Policies Act of 197$(“PURPA”).The Utilities requested that the
Idaho Public Utilities Commission (“Commission”)reduce the standard
contract term from 20 years to 2 or 3 years for all Qf projects that exceed the
published rate eligibility cap.As discussed in these comments,the
Commission should deny the Utilities’applications in order to (1)encourage
long-term fixed-priced contracts with stable prices for ratepayers;(2)promote
local economic development in Idaho;and (3)broaden Idaho’s options for
complying with the Environmental Protection Agency’s (“EPA”)Clean Power
Plan without any additional costs to Idaho ratepayers.If the Commission finds
that a change is warranted,instead of shortening the contract length,the
Commission should consider a variable component to the energy payment,as
further described herein and in the Rebuttal Testimony of R.Thomas Beach.
If granted,the Utilities’applications would undercut one of the primary
benefits of having PURPA projects as a part of utility portfolios:stable energy
prices for ratepayers that result from having long-term,fixed-price contracts.
Locking in the price of a Qf contract over the long term provides ratepayers
with rate stability and helps businesses better project their energy costs over a
longer period of time.Long-term contracts with renewable QFs help insulate
ratepayers from fluctuating fuel prices that fueled generating resources are
subject to,and thus,provide a good hedge against volatile market prices.
PURPA does not have a rigid concept of what constitutes a long-term
contract.However,based on our organization’s 20+years of experience in the
renewable energy industry as well as informal surveying of our energy
developer members,the industry norm for long-term contracts is at least 20
years.Not only does a shorter contract term make it more difficult to finance
projects,it also prevents ratepayers from realizing the above-described benefits
of long-term contracts with renewable QFs.Going alt the way from a 20-year
contract term to a 2-or 3-year contract term would increase rate instability and
limit the ability of ratepayers to be supplied with energy at avoided cost rates.
Shortening the Qf contract term as proposed by the Utilities would also deprive Idaho
of economic development opportunities.QF projects are a source of economic development
in Idaho that bring jobs and tax revenues to the local area.Moving away from a 20-year
contract term would send a message that Idaho is no longer “open for business,”prompting
QF project developers and the related jobs they support to look elsewhere for opportunities.It
would also limit the opportunities available to the Utilities to earn additional revenues
associated with the export of any excess generation.
In addition,moving away from a 20-year QF contract term would limit the State of
Idaho’s options for complying with the EPA’s Clean Power Plan.The Clean Power Plan
includes greenhouse gas (“GHG”)emissions reduction requirements applicable to each state,
and directs states to develop plans to reduce GHG emissions from existing fossil fuel plants.
The EPA expects to issue the final rule later this summer;the proposed deadline for individual
states to submit compliance plans is June 2016.Environmental attributes that the Utilities
secure from renewable QF projects give Idaho more options for complying with the Clean
Power Plan without imposing additional costs on utilities or ratepayers.Retaining the 20-year
contract term would ensure that the State of Idaho is not giving up an important tool that could
be used for Clean Power Plan compliance.
We have some sympathy with the issues that gave rise to the Utilities’applications;
however,we feel that a better approach to smoothing out PURPA implementation issues
would be to retain a 20-year contract term,but adopt a variable component to the energy rate
beginning in Year 11 of the contract.’Under such an approach,beginning in Year 11,the
portion of the energy price that represents the forecast of Mid-Columbia (“Mid-C”)prices for
a given year would be variable based on actual Mid-C prices for that year.Though this
component of the energy price would vary,the remainder of the indicative energy price for
Years 11-20 of the contract would remain fixed.Such an approach is a much more reasonable
approach than shortening the contract length,as it would do a better job of balancing
PURPA’s interest in encouraging development of new,independent,renewable generation
with its interest in protecting ratepayers and keeping them indifferent,from a cost perspective,
as to whether a utility is supplying its customers with Qf generation or dispatching utility-
owned generation to meet its customers’energy needs.
Drastically reducing the contract length is a blunt tool that simply cuts off the
opportunity for customers to benefit from long-term,stable rate projects that are cheaper than
the Utilities’best alternative.This is not a sensible way to deal with the Utilities’concerns
about Qf supply.We encourage the Commission to deny the Utilities’applications.
Thank you for the opportunity to comment.
Sincerely,
/s/Dina Dubson Keltey
Senior Staff Counsel
Renewable Northwest
‘This approach is further described in the Rebuttal Testimony of R.Thomas Beach at pp.7-8,
lines 3-2.
Jean Jewell
From:ben ©geo-energy.org
Sent:Thursday,July 02,2015 2:45 PM
To:Beverly Barker;Jean Jewell;Gene Fadness
Cc:[e-mail]
Subject:Case Comment Form:Benjamin Matek
Name:Benjamin Matek
Case Number:IPC-E-15-01
Email:ben(algeo-energy.otg
Telephone:[phone]
Address:209 Pennsylvania Ave.SE
Washington DC,20003
Name of Utility Company:Idaho Power Company Acknowledge public record:True
Comment:The Geothermal Energy Association is concerned about Idaho PUC’s pending decision to
shorten PUPRA contracts for all technologies from 20 years to 2 years.The consequences of
this decision will stall the budding geothermal power industry in Idaho by setting precedents
that would make developing geothermal power plants uneconomical.While GEA is not suggesting
Idaho Power purchase electricity it doesn’t need,a different solution should be sought other
than modifying all PURPA energy purchases.
One suggestions,is the Idaho PUC could exempt geothermal power from this decision.There is
a limited amount of geothermal resources currently under development and these projects
cannot physically be disaggregated into smaller and smaller projects to bid into PURPA.
Idaho only has 80 megawatts under development split between three separate companies and four
separate projects.Additionally,only two of these projects have finished any significant
amount of permitting or exploration at this time.The technology and economics of geothermal
power make it impossible for developers to take one large project and reconfiguring it into
smaller and smaller projects to bid into PURPA.Exempting geothermal from shortened PURPA
contracts will not further propagate the over generation problem or force Idaho Power to
procure more electricity than it needs.
Furthermore,Geothermal power bring specific important economic and environmental benefits to
the State of Idaho and its residents that would be lost if geothermal power industry was
unable to grow.
Some specific economic and environmental benefits of geothermal power plants to the State of
Idaho include:
•Geothermal power has one of the smallest footprints on the environment and has operational
values that support an efficient and reliable power system.
•Geothermal power provides clean and baseload power that can substitute for coal or nuclear
plants megawatt for megawatt.
•Geothermal power uses transmission lines 24/7,unlike other renewable technologies that
consume only a fraction of the transmission capacity on a round-the-clock basis.
•Geothermal power plants employ about 1.17 persons per MW at each operating power plant.
These are permanent jobs that last the entire 30-50 year lifetime of the power plant.
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