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March 14, 2002
Jean Jewell, Commission Secretary
Idaho Public Utilities Commission
427 W. Washington St.
Boise, ID 83702-5983
Re: Case No. GNR-02-, Comments of LA W Fund and Idaho Rivers United
Dear Ms. Jewell:
Please accept the following comments for the Commission s review in Case No. GNR-
02-01. The Land and Water Fund of the Rockies ("LAW Fund") and Idaho Rivers United
IRU") generally support economic incentives that encourage private investment in clean
renewable forms of energy. However, we are concerned that instatement of expanded eligibility
for published avoided cost rates, and longer contract lengths, may spawn another era of
hydropower development in Idaho to the detriment of ratepayers, as well as the environment.
Because our over-reliance on hydropower in the Northwest was a major cause of last
year s energy crisis, the Commission should not establish policies that encourage more
hydropower development. The Commission should, however, encourage investment in other
renewable resources such as anaerobic digesters and wind power in order to diversify our
portfolio of generation resources. Indeed, we note that in passing PURP A
, "
Congress' goal was
to accomplish greater diversity in the supply of electric power by providing incentives for
development of small alternative power and cogeneration resources." Ferrey, Law of
Independent Power at ~ 4:1 (WestGroup 2001).
Anaerobic digesters provide firm power, have essentially no variable fuel costs, enhance
diversification of generation, and decrease environmental impacts of sewage treatment and
confined animal operations. Wind power is clean, low cost, and would certainly diversify our
Idaho Office
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Boise, 10 83701
208-342- 7024
Fax: [phone]
E-mail: lawfund~rmci.net
Colorado Office
2260 Baseline Road, Suite 200
Boulder, CO 80302
303-444-1188
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E-mail: landwater~lawfund.org
Utah Office
1473 South 1100 East, Suite F
Salt Lake City, UT 84105
801-487-9911
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E-mail: utah~lawfund.org
LAW Fund and IRU Comments, GNR-02-
March 14 2002
page 2 of 3
portfolio of generation resources. Although wind provides non-firm power, investment in wind
energy would be of great value to ratepayers because the winter months provide the greatest
wind resource in Idaho, thus coinciding with our high winter peak demand.
Hydropower, on the other hand, generally provides its greatest output during the late
spring and early summer, when Idaho and the Northwest typically enjoy a surplus of electric
generation. This is particularly true of many run-of-river hydropower projects, which are most
likely to be constructed if the Commission provides greater economic certainty to developers.
The incremental costs of such power for utilities - and the marginal value of that power to
ratepayers - is extremely small, or even negative. In short, the actual "incremental cost" to
Northwest utilities of acquiring energy during the prime hydropower season is very low.
The Commission should establish PURP A policies which recognize the seasonal
variability of Idaho s generation resources and demand needs - specifically, the surplus of power
we generally enjoy in May and June, and the high peak demands of late summer and mid-winter.
We believe a fair approach to achieving recognition for such seasonal variability is through
approval and publication of seasonally adjusted avoided cost rates.
Federal regulations specifically require these seasonal factors to be taken into account:
In determining avoided costs, the following factors shall, to the extent practicable, be taken into
account: . .. (2) The availability of capacity or energy from a qualifying facility during the
system daily and seasonal peak periods." 18 C.R. ~ 304(e). Moreover, FERC regulations
allow utilities, after proper notice, to refuse to purchase power from qualifying facilities during
periods when it would be cheaper for the utility to acquire that power elsewhere due to
operational circumstances.Id.at ~ 304(f). There may be other creative approaches, however
toward the goal of recognizing seasonal variables in our power system, which would not run
afoul of PURP A's prohibition against discriminating between qualifying facilities.
With respect to the specific issues now at stake in this proceeding, the LAW Fund and
IRU request the Commission (1) increase the QF size limitation for published rate eligibility to
five (5) megawatts ; (2) increase contract length for power purchases from such projects to
twenty (20) years; and (3) require standardized agreements for interconnections of such projects.
We also request that the Commission evaluate a new system for setting avoided cost rates, which
would recognize seasonal variability in generation resources and demand in Idaho.
I Such size limitation should be sufficient to provide opportunities for anaerobic digester installation for most Idaho
dairy or confmed animal feeding operations.
'---"'
LAW Fund and IRU Comments, GNR-02-
March 14 2002
page 3 of 3
We believe the Commission should proceed with caution before establishing policies that
might force ratepayers to purchase power that they simply do not need, at prices that are higher
than utilities' actual incremental costs. We appreciate the opportunity to submit these comments.
Sinc,.elYL
Wil~ia M. Eddie
Land and Water Fund of the Rockies
Also on behalf of Idaho Rivers United
cc:
Robert 1. Lafferty, Avista Corp.
Gregory N. Duvall, PacifiCorp
Barton Kline, Idaho Power Company