20110429IPC Answer to RNP and NIPPC Motions.pdf

DONOVAN E. WALKER,,~ i 'r,r, " ;
C j L.J t)\ .f'1 \.J . j".; tJ V::i ~_'" i ;¡'i~.Lead ounsel IITII 'TIt;';: i'qî,¡r;ii'~:,:,
dwalkertâidahopo~er.cÓi\ ,.,'"ì 'd',_ ,,-"",h."..'
i?lDA~PO~
An IDACORP Company
April 28, 2011
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. GNR-E-11-01
IN THE MATTER OF THE COMMISSION'S INVESTIGATION INTO
DISAGGREGA TlON AND AN APPROPRIATE PUBLISHED AVOIDED
COST RATE ELIGIBILITY CAP STRUCTURE FOR PURPA QUALIFYING
FACILITIES
Dear Ms. Jewell:
¡ Enclosed for filing in the above matter are an original and seven (7) copies of Idaho
P~wer Company's Answer to Renewable Northwest Project's and the Northwest and
Intermountain Power Producers Coalition's Motion to Strike Portions of the Direct
Testimony of Mark Stokes in the above matter.
Donovan E. Walker
DEW:csb
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
DONOVAN E. WALKER (ISB No. 5921)
JASON B. WILLIAMS
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalkercæidahopower.com
jwilliamscæidahopower.com
Attorneys for Idaho Power Company
RECEIVED
201 i APR 28 PM 4: 46
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE COMMISSION'S )
INVESTIGATION INTO DISAGGREGATION )
AND AN APPROPRIATE PUBLISHED )
AVOIDED COST RATE ELIGIBILITY CAP )
STRUCTURE FOR PURPA QUALIFYING )FACILITIES. )
)
)
)
)
)
)
)
I. INTRODUCTION
CASE NO. GNR-E-11-01
IDAHO POWER COMPANY'S
ANSWER TO RENEWABLE
NORTHWEST PROJECT'S AND
THE NORTHWEST AND
INTERMOUNTAIN POWER
PRODUCERS COALITION'S
MOTION TO STRIKE PORTIONS
OF THE DIRECT TESTIMONY
OF MARK STOKES
Idaho Power Company ("Idaho Powet' or "Company") pursuant to RP 56.03 and
RP 256.04 hereby answers the Motion to Strike Portions of the Direct Testimony of
Mark Stokes filed by Renewable Northwest Project ("RNP") and joined by the Northwest
and Intermountain Power Producers Coalition ("NIPPC") (RNP's Motion, joined by
NIPPC, is hereafter referred to collectively as "Motion to Strike"). The Motion to Strike
should be denied because Idaho Power's testimony is properly within the scope of this
proceeding as directed by the Idaho Public Utilties Commission ("Commission").
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 1
Additionally, Idaho Powets testimony is relevant and necessary for a proper
consideration of the issues identified in this proceeding by the Commission. Moreover,
the Motion to Strike improperly characterizes the purpose and meaning of identified
portions of Mark Stokes' testimony so as to apply a blanket "beyond the scope"
objection to essentially the entire testimony.
Alternatively, should the Commission determine that Idaho Powets presentation
of testimony - that application of the Commission-approved Integrated Resource Plan
("IRP") methodology is a viable solution to the identified problem of disaggregation
either by (1) extending the 1 00 kilowatt ("kW") published rate eligibilty cap or,
alternatively, (2) if raising the published rate eligibility cap to 1 0 megawatts ("MW") or 1 0
average megawatts ("aMW"), that published rates be established using the IRP-based
pricing methodology - should be stricken, then Idaho Power hereby objects to the
Commission's segregation of issues into designated "phases" and asks that the May 10,
2011, hearing date be vacated and rescheduled such that a consolidated approach to
the issues, including an examination of valid pricing methodologies for determining the
utility's avoided cost, can be fully heard, considered, and ruled upon.
II. PROCEDURE
On November 5, 2010, Idaho Power, Avista Corporation, and PacifiCorp d/b/a
Rocky Mountain Power ("the Utilties") filed a Joint Petition requesting that the
Commission initiate an investigation into various avoided cost issues regarding Public
Utilty Regulatory Policies Act of 1978 ("PURPA") Qualifying Facilities ("QF").
Additionally, the Utilities requested that the Commission issue an Interlocutory Order
adjusting the published avoided cost rate eligibility cap for QFs from 10 aMW to 100 kW
effective immediately.
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 2
On December 3, 2010, the Commission issued a Notice of the Joint Petition and
Notice of Modified Procedure, Intervention Deadline, and Oral Argument, which set a
Modified Procedure comment schedule with which to develop a record for its decision
regarding the Joint Petition's request to lower the published avoided cost rate eligibilty
cap: Order No. 32131, Case No. GNR-E-10-04. Initial Comments and Reply
Comments were filed by the parties, and Oral Argument was held on January 27,2011.
On February 7, 2011, the Commission issued Order No. 32176 in which it ordered that
the eligibilty cap for published avoided cost rates be temporarily reduced from 10 aMW
to 100 kW for wind and solar QFs, effective December 14, 2010. The Commission
further ordered that a hearing be scheduled the week of May 9, 2011, to address issues
related to disaggregation and the published rate eligibilty cap.
On March 22, 2011, Idaho Power filed the Direct Testimony of M. Mark Stokes in
this case. On April 13, 2011, RNP filed a motion to strike Mr. Stokes' Direct Testimony
on the sole grounds that portions are "outside the scope of the present phase of the
proceeding(.)" RNP's Motion to Strike, p. 3. On April 14, 2011, NIPPC filed a motion to
join in RNP's Motion to Strike Mark Stokes' Direct Testimony. Idaho Power now
submits this Answer to the Motion to Strike, fourteen days from the time of filng of the
last motion or joinder, pursuant to RP 256.04.
II. DISCUSSION
The Direct Testimony of Mark Stokes is properly within the Commission's limited
scope of this phase of the proceedings. It does not challenge the validity of the IRP
methodology but recommends application of that methodology as a solution to the
problem of disaggregation - which is precisely what the limited scope of this phase of
the proceedings is directed at. This recommendation by Idaho Power is aimed at
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 3
addressing the root cause and the motivation that exists for projects to disaggregate
into 10 aMW increments, which is to obtain a higher published avoided cost rate. Idaho
Power's recommendations are to either (1) make permanent the published rate eligibility
cap of 100 kW - a recommendation also made by the other two utilties, as well as by
Commission Staff, which was not objected to by RNP nor NIPPC, or (2) that the most
effective way to assure that QFs do not obtain a rate that exceeds the utilty's avoided
cost by disaggregation if the eligibilty cap is moved back to 10 aMW is application of
the IRP methodology to set published avoided cost prices for QFs. Both of these
recommendations are relevant and within the Commission's stated scope for this
proceeding, and either of these recommendations wil resolve the disaggregation
concerns identified by the Commission.
A. Idaho Power's Testimony is Within the Scope of This Proceeding as
Directed by the Commission.
Mr. Stokes' Direct Testimony precisely responds to the Commission's directives
regarding the scope of this phase of the proceedings. In Order No. 32176, the
Commission reduced the eligibilty cap for published avoided cost rates on an interim
basis from 10 aMW to 100 kW for wind and solar QF. In directing the scope of the
present phase of these proceedings, Order No. 32176 states:
The Commission solicits information and investigation of a
published avoided cost rate eligibilty cap structure that: (1)
allows small wind and solar QFs to avail themselves of
published rates for projects producing 10 aMW or less; and
(2) prevents large QFs from disaggregating in order to obtain
a published avoided cost rate that exceeds a utilty's avoided
cost.
Order No 32176, p. 11. The Commission further clarified this request in Order No.
32195 stating:
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 4
The Commission initiates this proceeding to investigate and
determine in a finite time frame requirements by which wind
and solar QFs can obtain a published avoided cost rate
without allowing large QFs to obtain a rate that is not an
accurate reflection of a utility's avoided cost for such
purchases.
Order No. 32195, p. 1.
Additionally, the Commission offered clarification as to the scope of this phase of
the proceedings in response to Rocky Mountain Power's Motion for Clarification and for
a Protective Order regarding discovery requested by NIPPC. NIPPC sought to
challenge the validity of the IRP methodology in this phase of the proceedings and
through discovery sought information regarding the validity of the IRP methodology.
Rocky Mountain Powets specific objection to the discovery sought by NIPPC was that it
was designed to challenge the validity of the IRP methodology - and that such a
challenge was an impermissible collateral attack upon the Commission's previous final
Orders authorizing the use of, and affirming the validity of, the IRP methodology. Rocky
Mountain Powets Motion for Clarification and for a Protective Order, p. 4.
Commissioner Smith also stated at the March 21, 2011, decision meeting addressing
Rocky Mountain Power's Motion, "that she didn't believe the validity of the IRP
methodology is an issue the Cornmission designated for hearing on May 10th." Minutes
of Decision Meeting of the Commission, March 21,2011, p. 5 (emphasis added).
Idaho Power agrees that the validity of the IRP methodology is not at issue in this
phase of this case and fully expects to address the validity of the IRP methodology in
subsequent phases of this proceeding. However, there is a significant distinction that is
of particular relevance in this instance. The validity of the IRP methodology is not in
question in this phase of the proceedings; thus, the Commission's Order delaying
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 5
discovery responses aimed at this purpose to a later phase of proceedings is
appropriate. However, the Direct Testimony of Mark Stokes does not speak to the
validity of the IRP methodology as a means to set avoided cost rates for QFs. Instead,
Mr. Stokes' testimony, and Idaho Powets advocacy in this phase of the case, is that
application of the IRP methodology is the appropriate solution to the problems and
issues surrounding disaggregation of QF projects. This is what the Commission
specifically requested additional information on and investigation of - solutions to the
issue of disaggregation - and that is exactly what Idaho Power provided in the form of
Mr. Stokes' testimony.
As indicated above, Idaho Power suggests two possible solutions to the issue of
disaggregation, one of which is to make permanent the 100 kW published rate eligibilty
cap. Notably, four of the six parties that submitted direct testimony in this proceeding
recommend making the 100 kW published rate eligibilty cap permanent as a feasible
solution to the issue of disaggregation. Those parties include the three utilities, Idaho
Power, Avista Corporation, and Rocky Mountain Power, as well as Commission Staff.
RNP and NIPPC hold out Staff's testimony as the proper example of testimony that was
within the scope of the Commission's inquiry. However, Staff's testimony also
recommends that one viable solution to disaggregation is to make the 100 kW published
rate eligibility cap permanent. Thus, on the one hand, RNP and NIPPC argue that
Commission Staffs testimony is within the scope and proper in this phase of the case,
while on the other hand, RNP and NIPCC object to a portion of Mr. Stokes' testimony
that advocates the exact same position as Commission Staff testimony.
The current law and procedure, as approved and implemented by this
Commission, is that there are two valid, approved, enforceable, and required
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 6
methodologies for determining a utility's avoided cost under PURPA - the Surrogate
Avoided Resource ("SAR") and the IRP-based methodologies. It is precisely because
of this arrangement that there exists an economic motivation for larger QF projects to
configure themselves into multiple 10 aMW increments in order to obtain a higher
avoided cost calculation reserved for truly small, unsophisticated QFs. Mr. Stokes'
testimony puts forth that a meaningful examination of disaggregation as directed by the
Commission must address the underlying pricing and economic issues to ensure that
QFs do not obtain a rate that is inconsistent with, or above, the utilty's avoided cost. As
long as PURPA developers can select from the different cost and price calculations,
they wil seek out the higher of the two calculations. They wil have a strong e-conomic
incentive to disaggregate in order to avail themselves of the published avoided cost rate
whenever it is higher than the alternative calculation.
By prohibiting or ignoring the underlying economic issues, as suggested by RNP
and NIPPC, all of the issues directed for inquiry by the Commission in this proceeding
are not addressed. The Commission clearly directed three areas of inquiry: (1)
information and investigation of a published avoided cost rate eligibilty cap structure
that allows small wind and solar QFs to avail themselves of published rates for projects
producing 10 aMW or less; (2) information and investigation of a published avoided cost
rate eligibility cap structure that prevents large QFs from disaggregating in order to
obtain a published avoided cost rate that exceeds a utility's avoided cost (Order No.
32176); and (3) requirements by which wind and solar QFs can obtain a published
avoided cost rate without allowing large QFs to obtain a rate that is not an accurate
reflection of a utilty's avoided cost for such purchases. Order No. 32195.
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 7
The most troubling aspect of the Motion to Strike and supposed limitation to
discuss only criteria-based approaches in this docket is that this suggested approach
ignores the Commission's duty to ensure Idaho customers are not paying more than the
electric utilities' avoided costs for PURPA energy. RNP and NIPPC's approach would
be to simply establish a way to allow PURPA developers to continue to develop their
projects and receive the published avoided cost rate with no regard to the effect upon
customers or the utilty's actual avoided costs. This approach, or limitation, put forth by
the Motion to Strike tells only one-side of the PURPA story, the developets side. The
other side of the story is the customets side. It is the customers who ultimately have to
pay for electricity generated by PURPA projects.
The Commission's directive in this proceeding was not simply to devise a way
that further PURPA development could be encouraged and continue, but the directive
was also to make sure that QFs were not - and do not - "obtain a published avoided
cost rate that exceeds a utilty's avoided cost," Order No. 32176, p. 11, nor "obtain a
rate that is not an accurate reflection of a utility's avoided cost for such purchases."
Order No. 32195, p. 1. PURPA requires that utilty customers be economically
indifferent to the effects of whether power is purchased from a QF or otherwise acquired
(generated or purchased) by the utilty. Southern California Edison Co., 71 F.E.R.C. P
61,269, 1995 WL 327268 (F.E.R.C. 1995). Should the underlying economic issues
remain unaddressed, as suggested by the various criteria based proposals, as well as
with the limitation suggested by the Motion to Strike, published avoided cost rates wil
remain subject to exploitation by PURPA developers so as to avail themselves of the
published avoided cost rate to the direct and substantial detriment and financial harm of
all of the utilities' customers. Prohibiting any discussion of proposed solutions beyond
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 8
these Ucriteria"-based approaches, and striking Idaho Powets testimony as suggested
by RNP and NIPPC, would only address the encouragement and development ofQF
projects, and would not address the remaining and most important issues regarding
assurance that QFs not obtain a rate that exceeds the utilty's avoided cost and
assurance that customers truly remain indifferent to the QF transactions.
It is entirely proper, relevant, and within the scope of this proceeding for Idaho
Power to argue that by setting avoided cost rates for PURPA projects based upon the
IRP methodology, assurance can be given to customers that they will not be overpaying
for energy the electric utilties are avoiding by purchasing PURPA energy. Because the
I RP-based methodology addresses the underlying economic issue with the
Commission's current policy on PURPA pricing, PURPA developers wil have no
incentive to exploit disaggregation rules to receive more attractive published avoided
cost rates. This approach addresses both issues that the Commission ordered be
addressed in this docket: (1) it solves the problem of disaggregation and (2)
additionally, provides assurance that customers wil not be overpaying for PURPA
energy by paying a rate that exceeds the utilty's avoided cost.
Idaho Power's testimony is properly within the scope of this proceeding as
directed by the Commission. Moreover, Idaho Power's testimony is relevant and
necessary for a proper consideration of the issues identified in this proceeding by the
Commission. Therefore, the Motion to Strike should be denied in its entirety.
B. The Motion to Strike Improperly Characterizes the Purpose and Meaning of
Identified Portions of Mark Stokes' Testimony so as to Apply a Blanket
"Beyond the Scope" Objection to Essentially the Entire Testimony.
The Motion to Strike references and objects to broad sections of Mr. Stokes'
Direct testimony, makes generalized statements to the effect that the testimony
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 9
advocates for the IRP methodology over the SAR methodology, and improperly
characterizes the purpose and meaning of the referenced testimony. The Motion to
Strike then makes a blanket "beyond the scope" objection and asks that most of Mr.
Stokes' testimony be stricken. An examination of the purpose and meaning of the
referenced sections of testimony demonstrates that Mr. Stokes' testimony is soundly
within the Commission's directed scope for this proceeding, is relevant, necessary, and
proper evidence for the Commission's consideration in this matter, and that the Motion
to Strike should be denied.
1. Page 3, Line 27 through Page 4, Line 9 of Mr. Stokes' Direct
Testimony Should Not be Stricken.
The Motion to Strike seeks to strike page 3, line 27 through page 4, line 9 of Mr.
Stokes' testimony on the grounds that, ''This section of testimony argues that the IRP
methodology is preferable to the SAR methodology. Accordingly, it is beyond the scope
of issues identified for consideration in this proceeding." RNP's Motion to Strike, p. 3.
This section of Mr. Stokes' testimony is actually a summary of Idaho Powets
position to the Commission's inquiry about disaggregation. The testimony sets forth the
recommendations: (1) to make permanent the published rate eligibility cap of 100 kW -
a recommendation also made by the other two utilties, as well as by Commission Staff,
which was not objected to by RNP nor NIPPC; (2) that the most effective way to assure
that QFs do not obtain a rate that exceeds the utility's avoided cost if the eligibilty cap is
moved back to 10 aMW is application of the IRP methodology; and (3) that "criteria"
regarding ownership and geographic proximity wil not work and do not address the real
underlying problems of price, need, and an appropriately set avoided cost rate. These
proposed solutions are not outside the scope of the Commission's direction for this
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 10
proceeding and, in fact, address all of the issues identified by the Commission; those
issues being the published rate eligibilty cap, disaggregation, and preventing large QFs
from obtaining a rate above the utilty's avoided cost rate - not just the one-sided issue
that RNP and NIPPC would have addressed, which is how to move the published rate
eligibility cap back to 10 aMW and promote QF development. This portion of testimony
is relevant and within the Commission's stated scope and should not be stricken.
2. Page 4, line 14 through Page 8, line 24 of Mr. Stokes' Direct
Testimony Should Not be Stricken.
The Motion to Strike seeks to strike page 4, line 14 through page 8, line 24 of
Stokes' Direct Testimony on the grounds that:
This section of testimony repeats arguments advanced by
Idaho Power Company in support of the issuance of Order
No. 32195, reducing the published rate eligibility cap. The
NOI in this case invites comments on whether a mechanism
can be devised to allow 10 aMW project (sic) to receive the
published avoided cost rate while prevent (sic)
disaggregation. It did not invite repetition of previous
arguments in favor of reducing the published rate threshold.
Accordingly, it is beyond the scope of issues identified for
consideration in this proceeding.
RNP's Motion to Strike, p. 3.
This section of Mr. Stokes' testimony demonstrates how the positions taken by
Idaho Power in the GNR-E-11-01 docket, in its suggested approaches for the
Commission to take regarding disaggregation, are consistent with the positions taken -
and address the problems identified in the originating docket, GNR-E-10-04. This
discussion is not only directly relevant to the Commission's inquiry related to potential
solutions that it may implement regarding disaggregation but also because of the
Commission's separation of the issues into different cases. It is relevant, necessary,
and helpful to show that these issues, and narrowing of scope into phases, does not
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 11
happen in a vacuum and has a specific context associated with it that informs and
shapes the consideration, recommendations, and ultimate selection of a solution from
various proposals. The information is relevant and supportive of Idaho Powets
recommendations to address how the Commission can consider solutions to
disaggregation while at the same time maintaining its obligation to assure that
customers are not harmed by paying more than the utilty's avoided cost - which is
precisely within the Commission's stated scope of inquiry in this phase of the
proceedings. This portion of testimony is relevant and within the Commission's stated
scope and should not be stricken.
3. Page 9. Line 1 through Page 11. Line 8 of Mr. Stokes' Direct
Testimony Should Not be Stricken.
The Motion to Strike seeks to strike page 9, line 1 through page 11, line 8 of
Stokes' Direct Testimony on the grounds that, "This section of testimony argues that the
IRP methodology is preferable to the SAR methodology. Accordingly, it is beyond the
scope of issues identified for consideration in this proceeding." RNP's Motion to Strike,
p.3.
This again is a mischaracterization of the purpose and content of the testimony.
This particular section of testimony actually discusses and explains how Idaho Power's
testimony is consistent with, relevant, and responsive to the Commission's specific
directed inquiry in this case. The actual question objected to on page 9 states:
How is the discussion of the avoided cost pricing and
methodology relevant to the Commission's direction in this
docket, Case No. GNR-E-11-01, to "investigate and
determine . . . requirements by which wind and solar QFs
can obtain a published avoided cost rate without allowing
large QFs to obtain a rate that is not an accurate reflection of
a utilty's avoided cost for such purchases"?
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 12
Stokes' Direct Testimony, p. 9, II. 1-8. The remaining portion of this section that was
identified by RNP and NIPPC in their Motion to Strike, through page 11, line 8 discusses
how the underlying motivation, and the cause of the disaggregation of large projects into
10 aMW increments, is the fact that the projects configure themselves in such a way to
take advantage of tl¡e higher avoided cost calculation under the SAR methodology.
Idaho Power's suggested solution for this is to address disaggregation by addressing
the root cause - the economics or price. RNP and NIPPC, in objecting to this section of
testimony, are objecting to Idaho Power's explanation of why the testimony is relevant
and within the Commission's scope of this phase of the proceedings. This portion of
testimony is relevant and within the Commission's stated scope and should not be
stricken.
4. Page 16. Line 1 through Page 16. Line 17 of Mr. Stokes' Direct
Testimony Should Not be Stricken.
The Motion to Strike seeks to strike page 16, line 1 through page 16, line 17 of
Mr. Stokes' testimony on the grounds that, "This section of testimony is, again an
argument for the superiority of the IRP methodology. Accordingly, this section of
testimony is beyond the scope of issues identified for consideration in this proceeding."
RNP's Motion to Strike, p. 4.
Once again, and just as it did in the previously identified, objected to section of
testimony, RNP and NIPPC mischaracterize the purpose and content of Mr. Stokes'
testimony. This section of Mr. Stokes' testimony does not argue the "superiority of the
IRP methodology" as alleged by RNP and NIPPC. This section, much like this Answer
to the Motion to Strike, directly addresses how Idaho Powets testimony is consistent
with the Commission's direction for this docket, and relevant to the determination the
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 13
Commission seeks to make regarding the published rate eligibility cap, disaggregation,
and an appropriate avoided cost rate. This portion of testimony is relevant and within
the Commission's stated scope and should not be stricken.
5. Page 16. Line 18 through Page 25. Line 14 of Mr. Stokes' Direct
Testimony Should Not be Stricken.
The Motion to Strike seeks to strike page 16, line 18 through page 25, line 14 of
Stokes' Direct Testimony on the grounds that, "This section of testimony is, again an
argument for the superiority of the IRP methodology. Accordingly, this section of
testimony is beyond the scope of issues identified for consideration in this proceeding."
RNP's Motion to Strike, p. 4.
Again, a very broad portion of testimony is objected to and misconstrued by RNP
and NIPPC. This section of testimony generally sets forth Idaho Powets second
proposal for the Commission's consideration as a solution that "allows small wind and
solar QFs to avail themselves of published rates for projects producing 10 aMW or less;
and ... prevent large QFs from disaggregating in order to obtain a published avoided
cost rate that exceeds a utility's avoided cost." Order No. 32176, p. 11. This is word-
for-word responsive to the Commission's directive on scope. Idaho Powets testimony,
and Exhibit No.1, in this section puts forth the solution of raising the published rate
eligibilty cap by basing the published rate upon the IRP methodology. The testimony
and Exhibit No. 1 also set forth examples of the resultant price calculation for various
resource types under this proposal. There is nothing in the Commission's direction on
scope for this proceeding that says it only wants to be presented with solutions that
discuss a set of criteria based upon ownership, geographic, or other limitations and
qualifications to qualify for published rates. The proposed solution in this section of
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 14
testimony is a valid, workable alternative that would accomplish the stated goals set
forth by the Commission of raising the published rate eligibilty cap, but also assuring
that disaggregation cannot take place in order for QFs to obtain a rate in excess of the
utilty's avoided cost. It is not a challenge to the validity of the IRP methodology and, in
fact, completely accepts the Commission's previously approved avoided cost
methodology. Idaho Power is entitled to suggest possible solutions that are outside of
the other parties' criteria-based approaches - and the recommendation in this section
was specifically designed to meet the Commission's stated direction from Order No.
32176. This portion of testimony is relevant and within the Commission's stated scope
and should not be stricken.
6. Page 25, Line 15 through Page 26, Line 9 of Mr. Stokes' Direct
Testimony Should Not be Stricken.
The Motion to Strike seeks to strike page 25, line 15 through page 26, line 9 of
Stokes' Direct Testimony on the grounds that, "This section of testimony introduces the
idea of using nameplate rating rather than average megawatts. Accordingly, this
section of testimony is beyond the scope of issued identified for consideration in this
proceeding." RNP's Motion to Strike, p. 4.
Once again, Idaho Power is not aware that the Commission placed any
limitations as to scope such that alternative solutions that are not based upon some set
of criteria could not be brought forth and considered. In this section of testimony, Idaho
Power recommends that should the published rate eligibilty cap be raised, that the
Commission consider 10 MW rather than 10 aMW or, in other words, based upon the
actual nameplate rating of the generation project. Nameplate rating had been the
standard measurement to determine eligibility in the past, and the change in use to
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 15
average MW has added to the problem of disaggregation by allowing much larger
projects, in some cases up to 30 MW, to individually qualify for published rates. The
use of nameplate MW rather than average MW is more likely to truly capture the
smaller, more unsophisticated developers that the Commission intends to capture with
published rates. This portion of testimony is relevant and within the Commission's
stated scope and should not be stricken.
7. Page 26. Line 10 through Page 27. Line 4 of Mr. Stokes' Direct
Testimony Should Not be Stricken.
The Motion to Strike seeks to strike page 26, line 10 through page 27, line 4 of
Stokes' Direct Testimony on the grounds that, "This section is a summary of the
previously identified irrelevant testimony. Accordingly, this section of testimony is
beyond the scope of issues identified for consideration in this proceeding." RNP's
Motion to Strike, p. 4.
This portion of testimony summarizes Idaho Powets recommendations
contained in the testimony. It puts forth the recommendation to make permanent the
100 kW published rate eligibilty cap and advocates that it is a straightforward way to
quickly address the issues surrounding disaggregation as directed by the Commission.
It also urges Idaho Powets alternative recommendation that should the published rate
eligibilty cap be raised, that the IRP methodology be employed to set a resource
specific published avoided cost rate for those projects. As discussed above, these
recommendations are entirely responsive and within the Commission's directed scope
for this proceeding, as well as necessary for a full and complete consideration of those
issues. This portion of testimony is relevant and within the Commission's stated scope
and should not be stricken.
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 16
8. Exhibit No.1 to Mr. Stokes' Direct Testimony Should Not be Stricken.
The Motion to Strike also seeks to strike Exhibit NO.1 to Mr. Stokes' testimony
on the grounds that, "This Exhibit is offered in support of Idaho Powets argument that
the IRP methodology is preferable to the SAR methodology. Accordingly, this exhibit is
beyond the scope of issues identified for consideration in this proceeding." RNP's
Motion to Strike, p. 4.
As stated in Section 5 above, Exhibit No. 1 coincides with and informs about
Idaho Powets second proposal for the Commission's consideration as a solution that
"allows small wind and solar QFs to avail themselves of published rates for projects
producing 10 aMW or less; and . . . prevent large QFs frOm disaggregating in order to
obtain a published avoided cost rate that exceeds a utilty's avoided cost." Order No.
32176. P. 11. This is word-for-word responsive to the Commission's directive on scope.
Idaho Powets testimony, and Exhibit NO.1, put forth the solution of raising the
published rate eligibilty cap, but basing the published rate upon the IRP methodology.
Mr. Stokes' testimony and Exhibit No. 1 also set forth examples of the resultant price
calculation for various resource types under this proposal. As is the corresponding
testimony, Exhibit No. 1 is relevant and within the Commission's stated scope and
should not be stricken.
C. If the Commission Grants the Motion To Strike, the Commission Should
Vacate the Hearing Date and Consolidate the Issues in this Case
As described herein and in Mr. Stokes' testimony, Idaho Power's position is that
the proper way to deal with the problems of QF disaggregation is to address the
underlying economic issues associated with setting an appropriate avoided cost rate.
As stated above, Idaho Power believes that its proffered testimony is soundly within the
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 17
scope of this proceeding as identified by the Commission and should not be stricken.
However, should the Commission determine that Idaho Powets presentation of
testimony is outside of its designated scope and should be stricken, then Idaho Power
hereby objects to the Commission's segregation of issues into the designated "phases"
and asks that the May 10, 2011, hearing date be vacated and rescheduled such that a
consolidated approach to the issues including an examination of valid pricing
methodologies for determining the utilty's avoided cost can be fully heard, considered,
and ruled upon.
Because the underlying economic issues of avoided costs and published Tates
provide the underlying motivation for disaggregation, they are a necessary and integral
part of any proper examination of the Commission's directed scope in this proceeding,
that being issues related to the avoided cost eligibilty cap, disaggregation, and
assurance that projects do not obtain a rate above avoided cost. It would be improper
for the Commission to decide these very important issues, with very large ramifications
for customers, without reference to, or consideration of, the underlying economics of
avoided costs for PURPA energy. If the May 10 hearing is limited, as alleged by RNP
and NIPPC, such that it only addresses disaggregation "criteria" without examining the
underlying economic issues related to current avoided cost pricing, it will be impossible
to have a full, fair, and determinative examination of the issues related to disaggregation
and the published rate eligibilty cap. Indeed, at the Commission's March 21, 2011,
Decision Meeting, Commissioner Smith foreshadowed the dilemma posed by the
Motion to Strike by stating "if it turns out that the Commission cannot truly separate the
disaggregation issue from other avoided cost issues and handle it quickly, then the
other option is to cancel the hearing and consider everyhing at issue, which will prolong
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 18
the process considerably." Commission Minutes of Decision Meeting, March 21, 2011,
p.2.
While Idaho Power recognizes that vacating the hearing and taking a proper
consolidated approach to the issues, including an examination of valid pricing
methodologies for determining the utilty's avoided cost, would require additional time
and prolong the process, given what is at stake in this docket for the Utilties, Idaho
customers, and QF developers, Idaho Power believes that the Commission's duty to not
only implement PURPA but also to ensure Idaho customers pay no more than the
Utilities' avoided costs for PURPA energy by comprehensively addressing avoided cost
issues in this proceeding outweighs any adverse impact that may result by delaying this
matter for a more comprehensive and proper consideration of the issues. Ultimately,
even should the Commission agree with Idaho Power's recommendations, then Idaho
Power stil fully anticipates that this Commission would need to conduct additional
phases of this docket to determine the issues previously raised by the intervenors
associated with the alleged shortcomings of using the IRP methodology to determine
avoided cost rates. As indicated above, because Mr. Stokes' testimony only advocates,
as a policy matter, that the IRP-methodology addresses the problem of disaggregation
by dealing with the underlying economic concerns, the Commission, Staff, and
intervenors wil have a subsequent opportunity to examine the mechanics of the IRP
methodology, and challenge its validity should they so choose.
iv. CONCLUSION
The Commission did not limit the scope of this proceeding, nor its inquiry into
disaggregation, to only a discussion of ownership and geographic "criteria." Certainly,
discussion of these criteria, and single project versus multiple project determinations is
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 19
one possible route that the Commission could decide to take when addressing the
issues identified in this docket. However, it is not the only solution, and as argued by
Idaho Power, not the best solution out there. Idaho Powets testimony itself addresses
these issues and explains how its proposed solutions to the Commission's inquiry
regarding disaggregation and published rate eligibilty fit within the scope of the
Commission's inquiry. Idaho Power does not challenge the validity or mechanics of the
approved IRP methodology, but suggests its application as a viable and preferred
solution to the stated issues of disaggregation and the published rate eligibilty cap.
Even Commission Staff, who RNP and NIPPC held out as the proper example of
testimony that was within the scope of the Commission's inquiry, put forth the same
suggested remedy as the Utilties - that is to maintain the temporary published rate
eligibilty cap on a permanent basis as a viable solution to the problems of
disaggregation. By implementation of this recommendation, the IRP methodology is the
avoided cost methodology for all projects that exceed the 100 kW published rate cap.
But somehow when the Utiities discuss this same possible solution, it now becomes
objectionable and the target of a motion to strike. The Motion to Strike is without merit,
and Idaho Power respectfully asks that it be denied in its entirety.
DATED at Boise, Idaho, this 28th day of
DONOVAN E. WALKER
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS COALITION'S MOTION TO STRIKE
PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 20
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 28th day of April 2011 I served a true and correct
copy of IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST
PROJECT'S AND THE NORTHWEST AND INTERMOUNTAIN POWER PRODUCERS
COALITION'S MOTION TO STRIKE PORTIONS OF THE DIRECT TESTIMONY OF
MARK STOKES upon the following named parties by the method indicated below, and
addressed to the following:
Commission Staff
Donald L. Howell, II
Kristine A. Sasser
Deputy Attorneys General
Idaho Public Utilities Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
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-- Email don.howeiicæpuc.idaho.gov
kris.sassercæpuc. idaho.gov
Avista Corporation
Michael G. Andrea
Clint Kalich
Avista Corporation
1411 East Mission Avenue - MSC-23
P.O. Box 3727
Spokane, Washington 99220-3727
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-- Email michael.andreacæavistacorp.com
cI i nt. kalichcæavistacorp. com
PacifiCorp dlbla Rocky Mountain Power
Daniel E. Solander
J. Ted Weston
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
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-- Email daniel.solandercæpacificorp.com
ted. westonCãpacificorp.com
Kenneth Kaufmann
LOVINGERKAUFMANN, LLP
825 NE Multnomah, Suite 925
Portland, Oregon 97232
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Bruce Griswold
PacifiCorp
825 NE Multnomah
Portland, Oregon 97232
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-- Email bruce.griswoldCãpacifiCorp.com
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
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Exergy, Grand View Solar, J. R. Simplot,
Northwest and Intermountain Power
Producers Coalition, & Board of
Commissioners of Adams County, Idaho
Peter J. Richardson
Gregory M. Adams
RICHARDSON & O'LEARY, PLLC
515 North 2ih Street
P.O. Box 7218
Boise, Idaho 83702
Exergy Development Group
James Carkulis, Managing Member
Exergy Development Group of Idaho, LLC
802 West Bannock Street, Suite 1200
Boise, Idaho 83702
Grand View Solar II
Robert A. Paul
Grand View Solar II
15960 Vista Circle
Desert Hot Springs, California 92241
J.R. Simplot Company
Don Sturtevant, Energy Director
J.R. Simplot Company
One Capital Center
999 Main Street
P.O. Box 27
Boise, Idaho 83707-0027
Northwest and Intermountain Power
Producers Coalition
Robert D. Kahn, Executive Director
Northwest and Intermountain Power
Producers Coalition
1117 Minor Avenue, Suite 300
Seattle, Washington 98101
Renewable Energy Coalition
Thomas H. Nelson, Attorney
P.O. Box 1211
Welches, Oregon 97067-1211
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greg((richardsonandolearv.com
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-- Email robertapaul08((gmail.com
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-- Email don.sturtevantcæsimplot.com
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-- Email rkahn(Çnippc.org
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IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
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John R. Lowe, Consultant
Renewable Energy Coalition
12050 SW Tremont Street
Portland, Oregon 97225
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~ Email jravenesanmarcos(gyahoo.com
Cedar Creek Wind, LLC, & Dynamis
Energy, LLC
Ronald L. Willams
WILLIAMS BRADBURY, P.C.
1015 West Hays Street
Boise, Idaho 83702
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Cedar Creek Wind, LLC
Scott Montgomery, President
Cedar Creek Wind, LLC
668 Rockwood Drive
North Salt Lake, Utah 84054
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~ Email scott(gwesternenergy.us
Dana Zentz, Vice President
Summit Power Group, Inc.
2006 East Westminster
Spokane, Washington 99223
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~ Email dzentz(gsummitpower.com
Dynamis Energy, LLC
Wade Thomas, General Counsel
Dynamis Energy, LLC
776 East Riverside Drive, Suite 15
Eagle, Idaho 83616
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~ Email wthomas(gdynamisenergy.com
Idaho Windfarms, LLC
Glenn Ikemoto
Margaret Rueger
Idaho Windfarms, LLC
672 Blair Avenue
Piedmont, California 94611
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~ Email glenni(gEnvisionWind.com
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Interconnect Solar Development, LLC
R. Greg Ferney
MIMURA LAW OFFICES, PLLC
2176 East Franklin Road, Suite 120
Meridian, Idaho 83642
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~ Email greg(gmimuralaw.com
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
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Bill Piske, Manager
Interconnect Solar Development, LLC
1303 East Carter
Boise, Idaho 83706
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-l Email bilpiske((cableone.net
Intermountain Wind LLC and
Renewable Northwest Project
Dean J. Miler
McDEVITT & MILLER LLP
420 West Bannock Street
P.O. Box 2564
Boise, Idaho 83701
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Paul Martin
Intermountain Wind LLC
P.O. Box 353
Boulder, Colorado 80306
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-l Email paulmartin((intermountainwind.com
North Side Canal Company and Twin
Falls Canal Company
Shelley M. Davis
BARKER ROSHOLT & SIMPSON, LLP
1010 West Jefferson Street, Suite 102
P.O. Box 2139
Boise, Idaho 83701-2139
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-l Email smd((idahowaters.com
Brian Olmstead, General Manager
Twin Falls Canal Company
P.O. Box 326
Twin Falls, Idaho 83303
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Ted Diehl, General Manager
North Side Canal Company
921 North Lincoln Street
Jerome, Idaho 83338
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IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
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Board of Commissioners of Adams
County, Idaho
Bil Brown, Chair
Board of Commissioners of
Adams County, Idaho
P.O. Box 48
Council, Idaho 83612
Birch Power Company
Ted S. Sorenson, P.E.
Birch Power Company
5203 South 11 th East
Idaho Falls, Idaho 83404
Blue Ribbon Energy LLC
M. J. Humphries
Blue Ribbon Energy LLC
4515 South Ammon Road
Ammon, Idaho 83406
Arron F. Jepson
Blue Ribbon Energy LLC
10660 South 540 East
Sandy, Utah 84070
Conventional Renewable Energy Group
Gary Seifert
Kurt Myers
Idaho National Laboratory
Conventional Renewable Energy Group
2525 Fremont Avenue
Idaho Falls, Idaho 83415-3810
Idaho Conservation League
Benjamin J. Otto
Idaho Conservation League
710 North Sixth Street
P.O. Box 844
Boise, Idaho 83701
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Kurt. MyersCâinl.gov
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Renewable Northwest Project
Megan Walseth Decker
Senior Staff Counsel
Renewable Northwest Project
917 SW Oak Street, Suite 303
Portland, Oregon 97205
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Snake River Allance
Ken Miler
Clean Energy Program Director
Snake River Alliance
350 North 9th Street #B610
P.O. Box 1731
Boise, Idaho 83701
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cfú/~_
Donovan E. Walker
IDAHO POWER COMPANY'S ANSWER TO RENEWABLE NORTHWEST PROJECT'S AND THE
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PORTIONS OF THE DIRECT TESTIMONY OF MARK STOKES - 26