20081216notice_of_inquiry_order_no_30705.pdf

Office of the Secretary
Service Date
December 16 2008
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE COMMISSION'
CONSIDERATION OF FOUR CASE NO. GNR-08-
AMENDMENTS TO SECTION 111 OF THE
PUBLIC UTILITY REGULATORY NOTICE OF INQUIRY
POLICIES ACT OF 1978 (PURP A)
CONTAINED IN THE ENERGY NOTICE OF
INDEPENDENCE AND SECURITY ACT OF MODIFIED PROCEDURE
2007.
ORDER NO. 30705
On December 19, 2007, the President signed into law the Energy Independence and
Security Act of 2007 (EISA, the Act). EISA amends the Public Utility Regulatory Policies Act
of 1978 (PURPA) 1 by adding four new federal standards related to: (1) integrated resource
planning (IRP); (2) rate design modifications to promote energy efficiency investments; (3)
consideration of smart grid investments; and (4) smart grid information. EISA also adds a new
section (9 374) to the Energy Policy Conservation Act (EPCA) establishing a standard for
disposition of excess power from waste energy recovery projects.
Pursuant to the mandates proscribed within the Act, the Commission initiates this
proceeding to consider the four new PURP A standards contained in the Energy Independence
and Security Act? The new section of the EPCA added by the EISA will be addressed in
separate proceedings.
As set out in greater detail below, the Commission invites our three applicable
utilities 3 interested stakeholders, and the public to participate in this review process. After the
utilities have initially responded to our inquiry, the Commission will schedule and convene a
public workshop wherein all interested parties may participate. An additional comment and
response period will follow the workshop.
1 Codified at 16 U.c. 92621.
2 The EISA provision amending the Energy Policy and Conservation Act regarding waste energy recovery does not
require an implementation proceeding by a specified date. On the contrary, the new EPCA provision requires that
the State hold a separate proceeding for each request made by a project owner or sponsor. EPCA 9 374(a)(1).
3 The three regulated utilities are Avista Utilities, Idaho Power Company and PacifiCorp dba Rocky Mountain
Power. Atlanta Power does not meet PURP A' s threshold requirement of retail sales of 500 million kilowatt hours in
a calendar year. 16 U.C. 92612(a).
NOTICE OF INQUIRY
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30705
BACKGROUND
This is not the first time that Congress has required state commissions to examine
national regulatory standards. In 1978, Congress enacted PURP A to encourage: (1) the
conservation of energy supplied by electric utilities; (2) the optimum efficiency of electric utility
facilities and resources; and (3) equitable rates for electric consumers. PURPA 9 101 , 16 u.S.
9 2611. The 1978 regulatory standards included: (1) cost of service; (2) declining block rates;
(3) time-of-day rates; (4) seasonal rates; (5) interruptible rates; and (6) load management
techniques. 16 U.C. 9 2621(1) through 2621(6). The Energy Policy Act of 1992 added four
more standards. 16 U.C. 9 2621(7) through 2621(10). Finally, the Electricity Modernization
Act of 2005 added five more federal ratemaking standards for electric utilities. 16 U.C. 9
2621(11) through 2621(15). In response to PURPA, the 1992 Energy Policy Act, and the
Electricity Modernization Act of 2005 , this Commission initiated proceedings to review the
federal standards. Order Nos. 17586, 16611 24729 30108.
The four newest PURP A standards address integrated resource planning (IRP), rate
design that promotes energy efficiency investments, smart grid investments and smart grid
information. 16 U.C. 9 2621(16), (16), (17), and (17).EISA generally requires the
Commission to begin its review by December 19, 2008 , and decide whether to adopt the
standards by December 19, 2009. EISA 9 1307(b)(1). Although the Act requires the
Commission to undertake a review of the new federal standards, the Act does not compel the
Commission to adopt the standards. PURP A recognizes that nothing "prohibits any State
regulatory authority. . . from making any determination that it is not appropriate to implement
any such standard. . .." 16 U.C. 9 2621(a) (emphasis added).
In undertaking our consideration and determination of the four federal standards
PURr A outlines the procedural requirements that the Commission must follow.The
Commission shall issue a public notice of its review proceeding and make its determination
regarding each of the five standards for each regulated utility: (1) in writing; (2) based upon
findings and evidence presented in the proceeding; and (3) make its findings available to the
public. 16 U.C. 92621(b).
4 A technical error occurred in the drafting of the Act that caused the creation of two subsection 16s and two
subsection 17s.
NOTICE OF INQUIRY
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30705
THE NEW PURP A STANDARDS
We initiate this inquiry by noting that many of the basic concepts embodied in the
four "new" federal standards are not new to this Commission. The Commission, the three
regulated utilities and other interested parties have previously addressed IRPs, energy efficient
rate design, and smart grid technology and investments encompassed in the new standards.
Indeed, Congress recognizes that some states may have already considered and/or addressed
implementation of the standards.
The four standards are listed below as set forth in the Energy Independence and
Security Act. Input from the utilities will be the subject of a subsequent workshop open to all
interested parties. The workshop will be followed by an open comment period.
Integrated Resource Planning
(16) INTEGRATED RESOURCE PLANNING.Each electric utilityshall-
(A) integrate energy efficiency resources into utility, State, and regional
plans; and
(B) adopt policies establishing cost-effective energy efficiency as a
priority resource.
We direct each utility to comment on what steps, if any, it has taken to implement
energy efficiency into its integrated resource planning.
Rate Design Modifications to Promote Energy Efficiency Investments
(17) RATE DESIGN MODIFICATIONS TO PROMOTE ENERGY
EFFICIENCY INVESTMENTS.
(A) IN GENERAL.- The rates allowed to be charged by any electric
utility shall-
(i) align utility incentives with the delivery of cost-effective energy
efficiency; and
(ii) promote energy efficiency investments.
(B) POLICY OPTIONS.In complying with subparagraph (A), each
State regulatory authority and each nonregulated utility shall consider-(i) removing the throughput incentive and other regulatory and
management disincentives to energy efficiency;
(ii) providing utility incentives for the successful management of
energy efficiency programs;
(iii) including the impact on adoption of energy efficiency as 1 of the
goals of retail rate design, recognizing that energy efficiency must be balanced
with other objectives;
(iv) adopting rate designs that encourage energy efficiency for each
customer class;
NOTICE OF INQUIRY
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30705
(v) allowing timely recovery of energy efficiency related costs; and
(vi) offering home energy audits, offering demand response
programs, publicizing the financial and environmental benefits associatedwith making home energy efficiency improvements, and educating
homeowners about all existing Federal and State incentives, including the
availability of low-cost loans, that make energy efficiency improvements
more affordable.
We direct each utility to comment on what steps, if any, it has considered and/or
implemented regarding this standard.
Consideration of Smart Grid Investments
(16) CONSIDERATION OF SMART GRID INVESTMENTS.
(A) IN GENERAL.-Each State shall consider requiring that, prior to
undertaking investments in nonadvanced grid technologies, an electric utility
of the State demonstrate to the State that the electric utility considered an
investment in a qualified smart grid system based on appropriate factorsincluding-
(i) total costs;
(ii) cost-effectiveness;
(iii) improved reliability;
(iv) security;
(v) system performance; and
(vi) societal benefit.
(B) RATE RECOVERY.Each State shall consider authorizing each
electric utility of the State to recover from ratepayers any capital, operating
expenditure, or other costs of the electric utility relating to the deployment of
a qualified smart grid system, including a reasonable rate of return on the
capital expenditures of the electric utility for the deployment of the qualified
smart grid system.
(C) OBSOLETE EQUIPMENT-Each State shall consider authorizing
any electric utility or other party of the State to deploy a qualified smart grid
system to recover in a timely manner the remaining book-value costs of any
equipment rendered obsolete by the deployment of the qualified smart grid
system, based on the remaining depreciable life of the obsolete equipment.
We direct each utility to comment on what steps, if any, it has considered and/or
implemented regarding smart grid investments.
Smart Grid Information
(17) SMART GRID INFORMATION.
(A) STANDARD.All electricity purchasers shall be provided direct
access, in written or electronic machine-readable form as appropriate, toinformation from their electricity provider as provided in subparagraph (B).
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(B) INFORMATION.Information provided under this section, to the
extent practicable, shall include:
(i) PRICES.Purchasers and other interested persons shall be
provided with information on-
(I) time-based electricity prices in the wholesale electricity
market; and
(II) time-based electricity retail prices or rates that are available
to the purchasers.
(ii) USAGE.Purchasers shall be provided with the number of
electricity units, expressed in kwh, purchased by them.
(iii) INTERVALS AND PROJECTIONS.Updates of information
on prices and usage shall be offered on not less than a daily basis, shall
include hourly price and use information, where available, and shall include a
day-ahead projection of such price information to the extent available.
(iv) SOURCES.Purchasers and other interested persons shall be
provided annually with written information on the sources of the power
provided by the utility, to the extent it can be determined, by type of
generation, including greenhouse gas emissions associated with each type of
generation, for intervals during which such information is available on a cost
effective basis.
(C) ACCESS.Purchasers shall be able to access their own information
at any time through the Internet and on other means of communication elected
by that utility for Smart Grid applications. Other interested persons shall be
able to access information not specific to any purchaser through the Internet.
Information specific to any purchaser shall be provided solely to that
purchaser.
We direct each utility to comment on what steps, if any, it has taken to document and
provide information consistent with this standard.
NOTICE OF MODIFIED PROCEDURE
YOU ARE HEREBY NOTIFIED that the Commission has preliminarily determined
that the public interest may not require a formal hearing in this matter and will proceed under
Modified Procedure pursuant to Rules 201 through 204 of the Commission s Rules of Procedure
IDAPA 31.01.01.201 through .204.
YOU ARE FURTHER NOTIFIED that each utility shall address the questions set
out in the body of this Order by written response. Each utility s written responses to these
questions shall be filed with the Commission within forty-five (45) days from the service date
of this Order. The utilities' written responses shall contain the case caption and case number
shown on the first page of this Order. Each utility shall also serve interested persons on the
Commission Secretary s service list.
NOTICE OF INQUIRY
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30705
YOU ARE FURTHER NOTIFIED that following receipt of the written responses by
the utilities, the Commission shall schedule and convene a public workshop followed by an open
comment period.
DEADLINE TO BE PLACED ON COMMISSION SERVICE LIST
YOU ARE FURTHER NOTIFIED that persons desiring to receive copies of the
utilities' initial written responses must notify the Commission Secretary by letter no later than
thirty (30) days from the service date of this Order. Persons seeking to be served with copies
of the utilities' responses shall provide the Commission Secretary with their postal address and
e-mail address (if available) to facilitate service in this matter. The letter to the Commission
Secretary should also specify to the extent practical whether the interested person requests the
written responses from all utilities or just specific utilities. After the deadline has passed the
Commission Secretary shall issue the service list in this case.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission s jurisdiction under the Energy Independence and Security Act of
2007; Title 61 of the Idaho Code; and specifically Idaho Code 99 61-302, 61-307, 61-336, and
61-507. The Commission may enter any final Order consistent with its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission s Rules of Procedure, IDAP A 31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that A vista, Idaho Power and Rocky Mountain Power
file their written responses to the questions set out above and supply all supporting documents
within 45 days of the service date of this Order.
IT IS FURTHER ORDERED that persons interested in being served with the
utilities' responses notify the Commission Secretary by letter no later than 30 days from the
service date of this Order. Persons desiring to be placed on the Commission s service list shall
provide their postal mailing address, electronic mailing address (if available), and indicate
whether they desire to receive responses just from specified utilities or all three utilities.
IT IS FURTHER ORDERED that Avista, Idaho Power and Rocky Mountain Power
serve their responses on the interested persons listed in the Commission s service list.
NOTICE OF INQUIRY
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30705
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this It,
Tit
day of December 2008.
MARSHA H. SMITH, COMMISSIONER
ATTEST:
(if.d1Je D. Jewell
Commission Secretary
O:GNR-08-04 ks
NOTICE OF INQUIRY
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30705