20091016Sur-reply Comments.pdf

SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
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UTiliTIES COMMiSSION
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF A REVIEW OF THE )
SURROGATE AVOIDABLE RESOURCE (SAR) )
METHODOLOGY FOR CALCULATING )
PUBLISHED AVOIDED COST RATES )
)
)
)
CASE NO. GNR-E-09-03
SUR-REPLY COMMENTS OF
THE COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilties Commission, by and through its
Attorney of record, Scott Woodbury, Deputy Attorney General, and in response to the Notice of
Further Scheduling issued in Order No. 30922 on October 6,2009, submits the following
comments.
BACKGROUND
On August 6, 2009, the Idaho Public Utilities Commission (Commission) opened a
generic docket (Case No. GNR-E-09-03) to assess the continued viabilty of the Commission's
existing proxy unit or surogate avoided resource (SAR) methodology for calculating published
avoided cost rates. Specifically, the Commission noticed its intent to explore the continued
reasonableness of using published avoided cost rates as presently calculated for all QF resource
types.
STAFF COMMENTS 1 OCTOBER 16, 2009
To establish a basis for discussion and analysis and to determine the nature and scope of
fuher procedure, the Commission solicited input from A vista, Idaho Power, and PacifiCorp and
other interested paries including Staff. Specifically, the Commission sought answers to
questions posed in its Notice. Timely comments were fied by Idaho Power, A vista, PacifiCorp,
Idaho Wind Fars, Sagebrush Energy, and Commission Staff. Late comments submitted by
Idaho Forest Group were also accepted by the Commission.
On September 29,2009, the Exergy Development Group filed reply comments in
response to the initial round of comments submitted by the utilties and other parties. Staff now
wishes to submit sur-reply comments for the purose of correcting Exergy's misrepresentations
of Staff's positions.
CORRCTION OF MISREPRESENTATIONS OF STAFF'S POSITIONS
On page 5 ~ 3 of Exergy's comments, Exergy states "The utilities and Staff now propose
abandoning the published, natural gas-fired, CCCT SAR methodology, and replacing it with a
wind SAR." To be clear, Staff did not propose to abandon the natural gas-fired CCCT SAR. On
page 10 of its comments, Staff clearly states the following: " Staff believes that if a wind SAR is
adopted, it should be used only to compute avoided cost rates for wind QFs. The existing gas
CCCT SAR should continue to be used to compute rates for all other resource types."
Similarly, on this same issue, Exergy also misrepresents the position clearly stated by
Rocky Mountain Power (RMP). RMP in its comments at page 4 ~ 2b stated "In general, RMP
proposes that the Commission consider developing a separate SAR methodology for intermittent
resources such as wind and retaining the existing SAR methodology for thermal and/or baseload
QF projects. This would retain the current SAR methodology model but use two different
surrogate avoided resources - one for wind and one for baseload thermal QF projects."
Exergy also mischaracterizes Staff's comments when it states on page 5 ~ 3 "According to
them (the utilties and StaffJ , the published SAR provides QFs with an avoided cost rate that is
higher than rates awarded to wind energy projects acquired through the competitive bidding
process." In its comments, Staff reached no conclusion about whether the curent avoided cost
rates are higher than the prices paid by the utilties to acquire wind energy through the
competitive bidding process. Instead, Staff simply questioned whether the utilties would incur a
higher price for wind acquired through mechanisms other than PURP A, and suggested that the
utilties provide actual cost information that could be used to determine whether wind generation
STAFF COMMENTS 2 OCTOBER 16,2009
could be acquired for less under other mechanisms than through PURP A. Staff stated the
following in its comments:
Clearly, use of a wind project as an SAR to compute avoided cost rates for
wind QFs makes a lot of sense, but whether it is necessary is a separate question.
Whether the curent published avoided cost rates are a fair price for wind
generation should probably be determined by examining the costs utilties would
incur to acquire wind through mechanisms other than PURP A. If a utility is
acquiring or planing to acquire the same type of resources under RFP processes
as it is being obligated to acquire under PURP A, the prices for the same type of
resources should be similar regardless of the means employed to acquire them.
All three of the utilities should have current cost data for wind projects as a result
of recent acquisitions, RFPs, or unsolicited proposals. Wind project cost and
performance data should be readily available since wind generation has become
common in or around the service territories of all three utilities. Staff is hopeful
that each of the utilities wil provide cost information in this proceeding that wil
permit fair comparisons between current avoided cost rates and prices for wind
acquired through mechanisms other than PURP A.
Staff Comments at 5-6.
As previously stated, Staff submits sur-reply comments strictly for the purpose of
correcting misrepresentations made by Exergy. The fact that these sur-reply comments do not
address any of the other issues raised by Exergy should in no way be interpreted as concurence.
Staff stands by its initial comments which, in fact, oppose many positions taken by Exergy.
rWRespectfully submitted this / lo day of October 2009.
f£;.. , a s:u iA.t ott Woodbury
U Deputy Attorney General
Technical Staff: Rick Sterling
i:umisc:commentsgnre09.3swrps sur-reply comments
STAFF COMMENTS 3 OCTOBER l6, 2009
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 16TH DAY OF OCTOBER 2009,
SERVED THE FOREGOING SUR-REPLY COMMENTS OF THE COMMISSION
STAFF, IN CASE NO. GNR-E-09-03, BY MAILING A COpy THEREOF, POSTAGE
PREPAID, TO THE FOLLOWING:
CLINT KALICH
MICHAEL ANDREA
A VISTA UTILITIES
PO BOX 3727
SPOKANE WA 99220-3727
R BLAIR STRONG
PAINE HAMBLEN ET AL
SUITE 1200
717 W SPRAGUE AVE
SPOKANE WA 99201
BARTON L KLINE
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
RANDY ALLPHIN
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
DANIEL SOLANDER
PACIFICORP
DBA ROCKY MOUNTAIN POWER
201 S MAIN ST STE 2300
SALT LAKE CITY UT 84111
MARK MOENCH
PACIFICORP
DBA ROCKY MOUNTAIN POWER
201 S MAIN ST STE 2300
SALT LAKE CITY UT 84111
GREG DUVALL
LARENHALE
PACIFICORP
825 NE MUL TNOMAH ST
PORTLAND OR 97232
TED WESTON
PACIFICORP
DBA ROCKY MOUNTAIN POWER
201 S MAIN ST STE 2300
SALT LAKE CITY UT 84111
~b~SECRET ÄR --
CERTIFICATE OF SERVICE