20021230Decision Memo.doc

DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
COMMISSION STAFF
LEGAL

FROM: SCOTT WOODBURY

DATE: DECEMBER 30, 2002

RE: CASE NO. IPC-E-02-8 (Idaho Power)
INTEGRATED RESOURCE PLAN (IRP) YEAR 2002
BIENNIAL COMPLIANCE FILING

On June 28, 2002, Idaho Power Company (Idaho Power; Company) filed its year 2002 Integrated Resource Plan (IRP) with the Idaho Public Utilities Commission (Commission). The Company’s filing is pursuant to a biennial requirement established in Commission Order No. 22299, Case No. U-1500-165. The IRP describes the Company’s loads and resources, provides an overview of technically available resource options including purchases of power from the wholesale market, the acquisition of additional generating resources and, to a lesser extent, pricing options and demand-side management programs.
Under the Company’s planning assumptions, the Company contends that existing resources are likely to be insufficient to meet expected peak energy requirements as early as 2003.
2002 INTEGRATED RESOURCE PLAN
The 2002 Integrated Resource Plan assumes that during the planning period, from 2002 through 2011, Idaho Power will continue to be responsible for acquiring sufficient resources to serve its customers and will continue to operate as a vertically-integrated electric utility. One of the Company’s stated goals is to ensure that resources selected are cost effective, low risk and meet the increasing electrical energy demands of its customers. The number of households in the Company’s service territory is expected to increase from 310,000 today to nearly 380,000 by the end of the planning period in 2011. Under the 70th percentile water and load conditions, the Company projects that peak hour loads may cause peak hour transmission overloads from the Pacific Northwest presenting significant difficulties during the summers of 2003 and 2004. A combination of purchases from the eastside, demand reduction programs, and temporary generation resources may be required to meet the projected summer peak hour loads in 2003 and 2004.
In the Company’s 2000 Integrated Resource Plan, Idaho Power identified a need for additional generating resources located close to the Treasure Valley load center beginning in June 2004. The identified need was the basis upon which Idaho Power issued a request for proposal. The Garnet Energy LLC proposal was selected. A Power Purchase Agreement (PPA) between Idaho Power Company and Garnet Energy LLC was negotiated and filed with the Commission in December 2001. The Garnet project had it gone forward would have allowed the Company to purchase up to 250 MW of capacity and associated energy during periods of peak need.
Future resource options identified by the Company include market purchases, generation and transmission resources, and targeted demand side management, targeted conservation measures and pricing options.
In the near term, the Company has identified six items to address its resource needs:
1. Continuing to make seasonal purchases of wholesale market power of about 100 average megawatts during the utility’s peaking months of June, July, November and December. A megawatt is enough energy to power about 750 homes.

2. Integrate demand side (conservation) measures, where economical, to address the short duration peaks of the system load.

3. Solicit proposals and initiate the siting and permitting for about 100 megawatts of a utility owned and operated peaking plant to be available beginning in 2005.

4. Purchase up to 250 megawatts of capacity from the Garnet project, if approved, for use during peak periods beginning June 2005.

5. Add a new ten-mile transmission line between Brownlee and Oxbow that will add 100 megawatts of transmission capacity. The transmission upgrade is planned to be in service in the fall of 2004.

6. Proceed with an upgrade at Shoshone Falls, expected to be in service in 2007. This will result in an average increase in output of about 30 megawatts.

Additionally, the Company notes that it supports the Green Power Program. To meet the needs of customers desiring green energy, the Company has identified two specific near term actions to be initiated during the next two years:
1. Idaho Power anticipates participating in several educational and demonstrational energy projects with a focus on green resources.

2. Idaho Power intends to dedicate up to $50,000 to explore the feasibility of constructing a pilot anaerobic digester project within the Company’s service territory.

Idaho Power states that the Company and the Commission must agree on mechanisms that ensure prompt recovery of prudent costs incurred for the pilot and demonstration projects.
Idaho Power notes that it will continue to pursue cost effective incremental upgrades at its existing generation facilities. The Company will also continue to use the short-term regional market to balance system load and generation, as well as take advantage of the long-term energy market to secure energy at reasonable prices.
The Company’s Integrated Resource Plan filing includes the plan, sales and load forecast, a technical appendix, conservation plan and an economic forecast.

COMMENTS
On July 18, 2002, the Commission issued a Notice of Filing in Case No. IPC-E-02-8 and established a comment deadline of August 30, 2002. Comments were filed by Idaho Rivers United, Northwest Energy Coalition and the Land and Water Fund of the Rockies, collectively the Clean Energy Advocates or Advocates, Jay C. Hormel, Windland, Inc., Citizens for Responsible Land Use, Windworks, Inc., Idaho Rural Council, Advanced Energy Strategies and Commission Staff. Pursuant to request and Commission scheduling, Idaho Power filed reply comments on October 23, 2002.
The comments of the parties and reply comments of the Company can be summarized as follows:

Idaho Rural Council
Rural Council contends that the Company’s 2002 IRP is not an “Integrated Resource Plan.” What it is, the Rural Council contends is a resource plan to justify a particular project, a particular course of action. The Rural Council contends that the 2002 IRP is flawed for three primary reasons: (1) the public process was flawed; (2) the assumptions are flawed; and (3) with flawed process and flawed assumptions the analysis aspect of the plan and product was flawed.
Regarding “public process” the Rural Council states that Idaho Power’s ratepayers rely on the Company to meet their electrical needs, as citizens of the area in which they live and also rely on the Company to meet those needs not only in terms of costs, reliability, and safety, but to help steward the resources and quality of life that might be impacted by the Company’s management decisions. The Commission oversees this relationship, but also, the Rural Council contends, relies on an interactive relationship between Idaho Power and its customers.
As part of the process of developing the Integrated Resource Plan, Rural Council states that the Company was to hold a number of public meetings, ostensibly to get public input as to what should be considered in the plan. The Rural Council states that it was looking forward to this process and intended to participate fully in the discussion. At the first public meeting, it states that discussion was limited to Idaho Power’s agenda, which was to discuss the water/weather data they should use for planning purposes. That discussion centered on whether to use the mean averages or to skew the planning process toward a more severe prospect. What the Rural Council asked for at that meeting was to also look at what Idaho Power could do in terms of conservation, efficiencies, shaping of demand curves and alternatives to meet projected shortfalls. The Rural Council was told that that would happen at other meetings in the future. Rural Council contends that there was only one more meeting and that was a public meeting to unveil the draft plan. There were no discussions on alternatives. There was no public discussion of the options available. Rural Council contends that the trust relationship was broken by the Company and the process is flawed. The whole public input aspect was merely a charade, the Rural Council contends, to say that public meetings were held. The public was allowed to comment on the draft IRP, but it came out unchanged.
Regarding “flawed assumptions,” the Rural Council states that the demand curve assumptions of the Company seem to be cast in stone, that the Company is contending that they are real and solid and that nothing can be done to shape those curves. The Rural Council notes that Idaho Power advanced nothing in the 2002 IRP to encourage conservation. If there had been true public discussions about conservation, efficiency, load shaping and alternative production, then the Rural Council contends that the demand assumptions that Idaho Power relied on in their IRP would have been different and that would have led to various other analyses of possibilities not only in terms of load projections but assumptions about how to meet those loads.
Regarding the “flawed analysis,” the Rural Council contends that to have a valid analysis or assessment of any scenario, one has to have some criteria on which to assess the situation. Here again, the public meeting process, the Rural Council contends, would have played an important role; there the public could have helped to define the scenario. There is where the assumption about demand would have gotten defined as well as some sense of what the goal of the IRP should be. Left to Idaho Power and IDACORP, that goal was to build the Garnet facility. With public input it would have been to implement energy efficiency and conservation efforts, to shape the load curves and implement some renewables before looking to other means of production. The analysis done on the 2002 IRP, Rural Council contends, was limited by both the process of defining demand and the assumptions made about the demand. A false assumption was made that only one option existed to deal with demand and that was to build a power plant to meet wasteful, thoughtless consumption. Yet there was a host of evidence in the region, the Rural Council contends, that the demand curve could be shaved and shaped with other alternatives. Those alternatives were not discussed.
The Rural Council contends that public hearings without listening are a serious disservice. What is needed, it states, is a full, honest and open discussion of the issue. Rural Council recommends that a new docket be opened to explore ways to bring the public’s concerns into the planning process.
Jay C. Hormel
Mr. Hormel characterizes the public process for development of the Company’s IRP as inadequate and completely one sided. To assume that future plans reflect more than the Company’s narrow perspective of energy power, Mr. Hormel suggests that the Commission require the Company to hire an outside facilitator to manage a process that would consider not only energy production, but also energy conservation, demand side management and alternative/clean energy sources.

Windworks, Inc.
Windworks in its comments stresses the need for Idaho Power to conduct a fair and detailed analysis of the benefits and costs of wind power. Windworks notes that the Company has failed to identify a utility-scale wind power project as a viable competitive resource in its IRP. The Company, it states, has also erred in its evaluation of wind power project costs. Instead, the Company addresses an interest in a “pilot” wind project, possibly followed by a utility-scale (50-100 megawatts) wind project. A pilot project, Windworks states, is not needed and if not sized appropriately would not obtain the cost benefits of economy of scale.
Windworks owns and operates wind turbines (900 turbines in California and 150 megawatts under contract to BPA) and in its comments provides information as to the competitiveness of wind power as a generation resource. Windworks also details other related economic and environmental benefits of wind generation.
Wind power, Windworks states, is a mature technology with over 25,000 megawatts installed worldwide, including 4,000 megawatts in the United States. Last year alone, Windworks contends that about 1700 megawatts of wind power was installed in the United States. In the Northwest and Western United States, utility-scale wind power projects have been installed or are in the advanced planning stages in Washington, Oregon, Montana, Nevada, California, Wyoming and Colorado.
Windworks suggests that wind power will integrate efficiently with Idaho Power’s hydropower energy storage system. When the wind blows, the hydropower system can store energy if necessary, and when the wind is absent, the hydropower system provides the necessary peaking and load following capability.
Windland, Inc.
Windland has owned and operated utility-scale wind farms in California and is presently developing a wind farm in southeast Idaho. Windland contends that the Company’s IRP could be improved by correcting deficiencies and errors in its assessment of wind power as a generation resource. The Idaho Power study produces estimates of wind power costs of production in the $60-80 per megawatt hour range when levelized over 30 years. This estimate, Windland contends, overstates the cost of wind generation by 50-100 percent. Recent experience in the Northwest, it states, has resulted in multiple contracts, amortizing capital over shorter durations, at closer to $40 per megawatt hour.
A proper analysis of rural economic benefits and societal costs, Windland contends, would further improve the standing of wind generation relative to other generation alternatives.
Wind generation facilities (often sized to produce 25 to 75 megawatts) approximate the average annual load growth projected in the IRP. If the Company, Windland states, were to conduct multiple, competitive, long-term fixed price procurements in amounts approximating short-term load growth, Idaho Power ratepayers, it contends, could be protected from both future price volatility and expensive temporary under utilized facilities.
As currently portrayed in Company planning figures 11 and 12, Windland contends that the risk adjusted cost of fossil fueled alternatives are understated by the magnitude of the unhedged risk of future fuel price variability. Adding costs, to provide certainty to future gas prices (like the certainty available for future hydro and wind “fuel” prices), it states, is necessary before a fair comparison can be made. Not valuing the price certainty wind provides, Windland contends, biases the current analysis and will lead to sub-optimal resource planning decisions.
While acknowledging that intermittency in wind generation poses operational challenges, Windland contends that the intermittency has often been incorrectly associated with a lack of predictability. Windland contends that when measured on a seasonal or annual basis, wind is a more “firm” resource than hydro. Annual variation in streamflows are four or more times larger than the plus or minus 5% annual variability of annual wind energy. Adding wind resources and diversification to Idaho Power’s generation portfolio, it states, offers better mitigation of hydro resource volatility than would be provided by adding more of the same type of resource that produced the risk exposure in the first place.
Windland rejects the Company’s stated need to perform a pilot project to verify what, it states, is a well-proven, fully operational technology. What Idaho Power characterizes as “prudent” corporate behavior, Windland sees as wasteful management.
Advanced Energy Strategies
Also filing comments was Jeffrey C. Brooks of Advanced Energy Strategies, Inc. Mr. Brooks concludes that it is apparent that Idaho Power Company is not truly interested in developing an IRP that best serves the interest of ratepayers. Half truths, misinterpretations, misapplication of strategies and technologies, failure to do a comprehensive base case research, and a desire to limit the discussion of the options available to address our energy situation, Mr. Brooks contends, all smack of a company that is less than inspired or committed to act reasonably on behalf of their captive customers. Mr. Brooks urges the Commission to reject Idaho Power’s 2002 Integrated Resource Plan on the grounds that it fails to meet its basic objective of providing an objective and complete, side-by-side analysis of resource options facing us in today’s energy marketplace, and admonish Idaho Power Company for failing to fully meet their responsibility as a regulated monopoly cloaked in the public interest, to act as responsible stewards on behalf of the ratepaying public.
Citizens for Responsible Land Use (CFRLU)
CFRLU prefaces its comments by noting that it was an intervenor in the Idaho Power Garnet Case, Case No. IPC-E-01-42. That case was dismissed pursuant to CFRLU motion on July 24, 2002. Reference Order No. 29085.
The 2002 IRP, CFRLU contends, makes no effort to integrate supply side and demand side planning. In the entire draft there is only a very brief discussion of conservation and demand side management. Idaho Power concludes by saying that “conservation, demand side measures, and pricing options must be carefully designed and targeted to cost effectively address the projected deficits.”
For all practical purposes, the IRP, CFRLU states, appears to be formulated as a justification for the questionable Garnet Energy facility – a project that the Company for economic reasons has now abandoned.
Energy Advocates (Advocates)
The Energy Advocates recommend that the Idaho Power 2002 IRP be rejected and that formal proceedings be initiated. Specifically, the Advocates identify three reasons for rejecting the plan:
1. Idaho Power’s failure to identify and analyze (with any specificity or rigor) potential load management and conservation resources. The IRP includes no analysis of DSM measures or their cost effectiveness. The Advocates note that Idaho has the highest per capita energy use of any state in the nation.

2. The Company’s IRP assumes that IDACORP’s 250 megawatt Garnet combined cycle facility would be constructed in the near future. If Garnet is not an available resource, the IRP must be redrafted to identify alternate resources, including load management and conservation.

3. The Company’s proposed change in water planning criteria (moving from median water to more extreme water and weather conditions) represents a significant change which deserves closer scrutiny.

The Advocates express concern that the IRP does not outline a plan to meet customer energy needs in a cost effective manner, but instead is presented as a justification for the Company to sell more energy from IDACORP controlled facilities. Contingency planning focusing on load management, the Advocates contend, should be the cornerstone of the Company’s approach. The Company, it states, should plan for critical water and load conditions using varied and innovative approaches. Several suggestions such as employing financial instruments as an effective “low water insurance,” creating interruptible power rates to deal with transmission constraints or supply short falls and other load management programs (e.g., time of use) were made in the IRP public meetings, yet go without mention in the Company’s IRP.
A rational, risk minimizing strategy, the Advocates state, would rely on a diversity of tools and resources to plan for future power needs, including both demand-side and supply-side resources and a diversity of power sources. Instead, Idaho Power, it states, has focused on supply side measures from traditional generating resources. The Company proposes to rely almost entirely on constructing new generating resources or market purchases to meet deficiencies.
One of the most glaring deficiencies in the Company’s IRP, the Advocates contend, is the Company’s failure to include a load analysis. The Company cannot effectively plan for meeting its load in the most cost effective manner, the Advocates state, without adequately understanding the character of that load. Load analysis, it states, can particularly assist the Company in determining whether to respond with supply side measures or demand side measures.
The Advocates note that Idaho Power currently has no ongoing programs or pricing structures (apart from a small pilot time-of-use plan) to encourage customers to shift their energy use to off-peak hours. Constructing new generating resources, they note, is expensive and if the Company relies on fossil fuels, exposes customers to fluctuating fuel prices. Reliance on the market also exposes customers to price uncertainty and raises transmission constraint issues. This uncertainty, the Advocates states, could be lessened by greater reliance on demand side measures (including conservation and efficiency measures as well as load shifting measures), and distributed and utility-scale renewables, which are not dependent on market fuel prices.
The Advocates state that another glaring deficiency of the IRP is its failure to seriously consider any non-hydro power renewable energy. The Company unfortunately, it states, appears to view non-hydro renewable sources of generation as charitable undertakings, not as a real resources.
Noting that the Company has proposed constructing a small pilot wind project, the Advocates counter that wind is no longer an experimental source of energy. A small pilot project, they state, would not accurately reflect the cost of a utility-scale project. Instead of a pilot, the Company, it states, should invest money in analyzing potential wind site information and then use that data to actually construct a utility-scale wind project; or contract to purchase power from commercial wind developers. The Advocates note that the Company did not propose constructing a pilot gas plant to determine whether it is a cost effective generating resource. It simply looked at existing data on those sources.
To the extent that new generating resources are necessary, the Advocates recommend that the Company focus on creating a new diversified power base to include more renewable energy such as wind, solar and bio-mass. The Company, it notes, relies almost exclusively on thermal and hydropower generation. Such a homogenous generation base, it states, can only exacerbate extreme conditions. Distributed renewable generation, the Advocates state, should also be an integral part of diversifying Idaho Power’s generation resources. This would help relieve supply shortfalls as well as relieve transmission constraints, provide voltage support and boost grid reliability.
Commission Staff
Staff recommends that the Commission reject Idaho Power’s 2002 IRP. The IRP, it states, does not contain a serious discussion of demand side opportunities and instead relies primarily on a contract for 250 megawatts of peak power from the proposed Middleton-Garnet plant and market purchases to meet its growing demand. Given transmission constraints on power purchases from outside its own system and the risk on relying upon purchases from Garnet (now defunct), it appears, Staff contends, that the viability of the Company’s IRP is in serious jeopardy.
Staff recommends that the Commission return the IRP to Idaho Power and require the Company to revise it in recognition of current conditions and to comply with the Commission’s 1989 requirement that IRPs include a balanced consideration of demand side and supply side resources. Reference Commission Order No. 22299, January 27, 1989.
As reflected in Staff comments, in the Commission’s Order No. 29085 dismissing the Company’s application in the Garnet case (Case No. IPC-E-01-42), Idaho Power was required to report to the Commission by October 23, 2002 on the status of efforts to acquire financing for Garnet and the project’s continued viability. Without Garnet, Staff notes that the IRP would not be representative of the Company’s load resource condition and would fall 250 megawatts short of meeting load during critical periods. The IRP assumes that the Commission would approve the Garnet contract. The four resource strategies analyzed by the Company for satisfying future resource deficits are based on that assumption. None of the strategies are viable, Staff contends, if an additional 250 megawatts is needed to replace Garnet.
Apart from its request that the Company’s IRP be rejected, Staff makes the following specific comments on the Company’s IRP filing.
Planning criteria
In the Idaho Power 2002 IRP, the Company is emphasizing the 70th percentile water conditions and 70th percentile load conditions for resource planning. In previous IRPs, a median water planning criterion was used. Staff agrees with the Company’s decision to plan using more conservative water and load condition criteria as a way of reducing planning risk and rate volatility. Planning based on more conservative criteria, however, Staff notes, will result in more resources being added sooner.
Load Forecast
In the Company’s 2000 IRP, the expected ten year average annual load growth was forecasted at 1.8 percent. In the 2002 IRP the rate is 2.3 percent. The new forecasted growth rates are based on a new economic forecast, the prediction of sales and load figures on a monthly basis, rather than a seasonal or an annual basis, use of a median peak day temperature in its analysis instead of an average day temperature, and modifications to more accurately account for differences between when energy is actually used and when meters are read and bills prepared.
Staff points out a perceived incongruity and overstatement in the Company’s residential load forecast, which when corrected for would reduce projected usage.
Market Purchases
The Company’s IRP reflects a decision to reduce its reliance on market purchases. The Company, Staff contends, recognizes the substantial risks associated with over reliance on the market. The Company’s decision also reflects that substantial investment in additional transmission facilities would be required to relieve existing transmission constraints.
Staff agrees with the Company’s decision to reduce its reliance on the market. While too much reliance is undesirable, however, Staff notes that some reliance is still appropriate. If Garnet is abandoned, Staff would like to see greater scrutiny of possible transmission upgrades and additions, that would give the Company better access to the market, especially during critical peak periods. The Company’s analysis, Staff notes, shows that there are times during the summer beginning in 2003 when the transmission system is not adequate to import power to serve load. The IRP offers no specific plan to satisfy these deficits. Without Garnet, transmission constraints, Staff contends, are even more critical.
DSM – Conservation Efficiency and Pricing Options
Idaho Power mentions DSM in most chapters of its IRP, but other than an irrigation time of use pricing trial does not list or describe any new measures that it is currently investigating to help meet its future resource requirements. Omitted from the IRP is any suggestion that Idaho Power will investigate or implement any DSM that is not targeted at reducing short duration peak loads. The Company in its IRP states that it is waiting for the issuance of customer funding for DSM to be resolved before it will initiate DSM measures. The Company is also concerned about the revenue effects of reduced sales resulting from DSM. In Order No. 29026, issued May 13, 2002, over six weeks before the IRP was filed, Staff notes that the Commission approved a Company proposal to implement a 0.5 percent surcharge to fund DSM projects. More importantly, Staff contends that the Company’s position of waiting for “customer funding” is contrary to the first ordering clause in Commission Order No. 22299, issued January 27, 1989, in Case No. U-1500-165, which requires that electric utilities “give balanced consideration to demand side and supply side resources when formulating resource plans and when procuring resources.” Order at p. 20.
Staff believes that during peak load hours, Idaho Power customers use electricity, often inefficiently for many purposes other than cooling buildings and irrigating crops. Staff contends that in order to design the most cost efficient incentives and time-of-use rates the Company must conduct an end use load research study. Such a study was not performed to the surprise of both Staff and other commenting parties. Staff notes that the Company considers such a study to be an imprudent expenditure. Reference Idaho Power Rebuttal Testimony, Case No. IPC-E-01-42. Staff believes that an end use load resource study is integral to any IRP that seriously considers cost effective DSM measures, especially those targeted to peak load hours, and that the cost recovery of this research should not be restricted to DSM surcharge monies.
Staff believes that Idaho Power should re-evaluate various DSM alternatives, targeted conservation and pricing options, this time assigning appropriate value to each alternative’s potential to displace or defer the need to add new generation, transmission and distribution facilities. The burden should be on Idaho Power, Staff contends, to demonstrate why peak load reduction measures are not viable. Demand side alternatives should be thoroughly evaluated as part of the IRP process, and the IRP should contain the results of that analysis.
Because Idaho Power, Staff contends, has been acquiring much less than its theoretical share of DSM resources over the past several years (reference NWPPC Conservation Goals), Staff believes the Company may have the potential to achieve a DSM peak load reduction goal in the range of 150 aMW to 400 aMW over the next few years.
Shoshone Falls Upgrade
Idaho Power in its IRP proposes pursuing a 64 megawatt upgrade of its Shoshone Falls plant. The Company states that this is a non-deferrable project. Staff contends that more information is necessary to judge whether upgrading the plant is reasonable. It would seem, Staff states, that most of the increased generation would not be during either the peak summer or winter months when the Company expects to have deficiencies. In the summer time, flows are diverted upstream of Shoshone Falls for irrigation. In the wintertime, flows are normally quite low due to the weather.
Peaking Plants
The IRP indicates that the Company plans to solicit proposals and initiate the siting and permitting of approximately 100 megawatts of a utility owned and operated peaking resource to be available beginning in 2005. Given the short duration of system peaks that this plant needs to satisfy, along with the advantages cited by the Company in the Garnet case of having an affiliate own and operate the plant, Idaho Power’s intention, Staff contends, seems contrary to its prior position. At a minimum, Staff recommends that the Company be required to solicit bids for a variety of ownership options.
Additional Strategies
Staff further supports the Company’s plans as reflected in additions to its earlier draft IRP to
1. Make firm purchases for the system (possibly sourced from areas other than the Pacific Northwest) while simultaneously making a non-firm off system sale. This provides Idaho Power with the ability to interrupt the non-firm sale during critical peak-hour conditions.

2. Accelerate construction of the Brownlee to Oxbow No. 2 transmission line from its originally planned completion date in 2005 to the summer of 2004.

3. Continuing investigating opportunities for cost effective power exchanges as a method to manage projected surpluses and efficiencies.

4. Incorporate into its planning the short-term peaking capability of the C J Strike, Bliss and Lower Salmon hydro plants.

These additions, Staff contends, may represent viable alternatives to help relieve peak hourly deficiencies.
Idaho Power Reply Comments
Idaho Power addresses the following subjects in its reply:
Garnet Power Purchase Agreement
The Company acknowledges that the removal of Garnet from its 2002 resource stack will require expeditious pursuit of cost effective alternative resources. (Reference Order No. 29085 – Commission direction to Company to file Garnet Report.) Idaho Power notes that contemporaneous with its reply comments, the Company has filed its Garnet Report where in it has presented several alternative resource strategies to the Commission. As a result of changes in the wholesale energy markets, the Company is optimistic that it will be able to replace the seasonal purchases specified in the Garnet Power Purchase Agreement with a combination of resources including, but not limited to, seasonal wholesale firm power purchase contracts and exchange contracts at prices equal to or less expensive than the cost of the Garnet PPA. Idaho Power represents that it is actively pursuing negotiations to secure some of these resource options. Negotiation particulars were provided to the Commission under separate confidential seal.
Conservation
Idaho Power believes that using estimated conservation savings to defer or displace other resources in the IRP would be inconsistent with prior Commission Orders and has the potential to short circuit the Commission’s recently approved Energy Efficiency Advisory Group (EEAG) process. In support of its decision to not evaluate and assign specific values to potential DSM, conservation programs and new energy pricing options (e.g., time of use pricing, inverted rates, etc.) and use assigned values to displace or defer the need to add new generation, the Company cites Commission PURPA Order No. 22636 wherein the Commission stated:
All three of the utilities plan to use conservation as their next resource. Yet we are unaware of a single electric utility that has documented a reliable, predictable conservation resource procurement program. We applaud the Idaho electric utilities for their newfound enthusiasm for conservation. However, until there is sufficient industry experience in estimating the quantity, quality, and cost of conservation resources so that they are procurable and reliable, we will not consider them avoidable resources: You can't avoid what you can't procure. Therefore, only conservation resources actually contracted for shall be used to extend the time until load/resource balance; estimated future conservation resources shall not. Utilities are expected to contract only for reasonably confirmable conservation resources.

Order No. 22636, pp. 51-52.
For many years, the Company states, it has prepared and filed a Conservation Plan with the Commission that is separate from the IRP and identifies possible conservation load reductions. A copy of the Conservation Plan has been included with the Company’s 2002 IRP. Under the existing conservation planning regime, the benefits of existing conservation, the Company states, are reflected in the IRP as reduced load forecast. Additional estimated or projected conservation savings are not treated as resources to defer or replace future planned resources. The Company expects that the written reports generated in conjunction with the recently approved Energy Efficiency Advisory Group process will be an integral part of the Company’s annual conservation reporting process.
The Company notes that the Commission and Company have created a method to fund conservation (tariff rider) as well as an advisory group (EEAG) to ensure that the Company’s conservation programs are realistically assessed and conservation funds are wisely spent – to ensure that Idaho Power “contracts only for reasonably confirmable conservation resources.” Idaho Power states its intention to work closely with EEAG to evaluate potential demand reduction and energy conservation programs.
Idaho Power believes that the proper forum for identifying and promoting new conservation programs is the EEAG process. Requiring the Company to develop conservation plans within the IRP process, it contends, would render the EEAG process meaningless. The Company contends that the EEAG process should be given an opportunity to succeed before it is discarded and replaced by energy goals or targets developed in the IRP.
Attached to the Company’s reply comments are copies of all Commission Orders pertaining to Idaho Power and conservation.
End Use Research
Idaho Power disagrees that end use studies are a critical part of the integrated resource planning process or are necessary to make good resource planning decisions. The term “end-use,” it states, is not mentioned in Commission Order No. 22299 directing utilities to submit resource management reports or integrated resource plans.
There is significant agreement among all parties, the Company states, that the primary contributors to Idaho Power’s summer peak are residential and commercial air conditioning and irrigation load. For current resource planning purposes, the Company therefore contends that it is more productive to focus immediate attention and programs on air conditioning and irrigation loads, where there is the greatest likelihood to reduce summer peak demand.
Idaho Power states that it is presently investigating demand reduction pilot programs focusing on residential air conditioning and irrigation loads. An end use study is not essential, the Company states, for developing these pilot programs.
Planning Criteria
The Company notes that the Advocates in their comments were critical of the Company’s proposed change in water and load condition planning criteria. The Company indicates that this change was suggested and discussed at numerous public meetings following the 2000-2001 run-up in market prices. Under median planning, the Company states, it was understood that if streamflows were below median or loads were higher than forecast, the Company would meet deficiencies with market purchases. Reliance on market purchases as a contingency was a reasonable and time-tested planning consideration. The changes to the planning criteria in the Company’s 2002 IRP assume that lower than median water conditions and higher than expected load conditions are the starting point for planned additional resources. By acquiring resources based on the new starting point, the Company has less reliance on market purchases.
The Advocates contend that “contingency planning” should be “the cornerstone” of the IRP and that the Company should plan for critical water and load conditions. The Company states that it is involved in “contingency planning.” However, the Company views contingency planning as a relatively near term process rather than a long-term process. The Company believes that changing the nature of the IRP from a long-term planning document to a contingency evaluation document is inappropriate.
Alternative Rate Structures
It was suggested by several commentors that Idaho Power evaluate alternative rate structures to reduce peak loads. The Company states that it has looked at time-of-use pricing and submitted its report to the Commission. Reference Case No. IPC-E-02-12. The Company’s conclusion in its report was that until an automated meter reading system is in place that allows for the economic recording and collection of customer usage by time of day, residential time-of-use pricing is not economically viable. Idaho Power believes that Case No. IPC-E-02-12 and not this case is the proper form in which to consider comments regarding time-of-use pricing.
It is the Company’s stated position that alternative rate structures to the extent that they result in load shifting, must not have a negative impact on the Company’s revenues and expenses.
Load Forecast
Idaho Power agrees with Staff that its forecasted residential growth rate is in error. The Company corrects for the error. The Company presents new growth rates for Idaho households, Idaho Power service area households, the number of residential customers, and residential electricity sales.
The Company notes that electricity demand varies inversely with electricity prices. Higher prices have reduced customer use on an annual basis. Summer months, however, continue to show increasing use. Once electricity prices return to closer to historical normal levels, Idaho Power expects residential use per customer to increase for a time before stabilizing and returning to a slow pattern of downward descent on an annual basis.

Shoshone Falls
Idaho Power believes that the Shoshone Falls upgrade should be pursued. It is an opportunity to provide additional renewable energy and it is the lowest cost opportunity for the Company to add additional generation at existing hydro facilities. While the Shoshone Falls expansion would provide limited peaking capacity, the Company states that it continues to spill significant volumes of water over the falls during winter and spring months and during high water years during the whole year. The Company projects that the increased energy generated will be at or below market rates. In the long-term, the Shoshone Falls project, the Company states, is expected to reduce overall power supply costs. If Idaho Power declines to pursue the expansion development at Shoshone Falls, the Company states that the opportunity becomes available to other generation developers.
Market Purchases
The Company plans to continue to utilize long and short-term market purchases throughout the planning period to supplement existing and future Company resources. The Company agrees with Staff that excessive reliance on the market, especially excessive reliance on the real-time or spot market, carries excessive risk. The Company intends to reduce reliance on the short-term or spot market by acquiring resources, including long-term firm market purchases from entities that own generating resources. The Company is presently investigating opportunities to secure long-term firm commitments for capacity, energy and transmission. (See Garnet Report.)
For determining system deficiencies, the 2002 IRP assumes that all market opportunities are in the Pacific Northwest power market. The Northwest is Idaho Power’s preferred market for two reasons – liquidity and price. Northwest transmission constraints, the Company contends, may result in purchases from the northeast, east or south power markets.
Renewable Resources
Idaho Power does not dispute the fact that wind developers with detailed analysis and monitoring of specific proposed projects should have more accurate data than the generic data Idaho Power relied on to develop its estimates of the cost of wind generation. For future IRPs Idaho Power will meet with local wind developers to gather additional site specific data.
Idaho Power notes that its resource needs in the near term are primarily of a peaking nature. Since wind, the Company contends, is considered an intermittent resource, wind generation is not Idaho Power’s preferred resource to meet seasonal hourly peak needs.
It was suggested that the Company could use wind generation to displace hydro generation, in effect storing the wind energy within the hydro system. The Company notes that in its 2002 IRP, the Company assumes that the hydro systems peaking capacity is fully used. It is therefore unlikely, the Company states, that a wind resource will significantly increase the peaking capacity of the hydro system given the present physical and operating restrictions.
Idaho Power agrees with comments suggesting that wind generation is a mature technology and that there is no need for a pilot project. Although present in the draft 2002 IRP, the Company intended to remove pilot wind project from the final IRP. It failed to do so and apologizes for the confusion. The Company anticipates adding a utility-scale wind project within its service territory sometime in the future. However, the Company does not view such a resource as addressing the seasonal and peak nature of the Company’s near term-projected deficiencies.
The Company agrees that wind generation will reduce the fuel related volatility associated with its resource mix. A properly structured power or market purchase agreement, the Company states, will also reduce the fuel related volatility. The difference, the Company states, is that a power or market purchase agreement can provide firm power whereas a wind generation option can provide only intermittent power.
Idaho Power states that it has developed a mechanism, the Green Power Program, whereby demand for green energy, such as wind can be fostered. It is designed to provide a voluntary choice for customers who wish to support new, renewable resources. The Green Power Program, the Company states, is a crucial first step in the assessment of customer’s interest in supporting a more expensive, renewable resource. At present, Idaho Power has approximately 1600 customers participating in the Green Power Program requiring about 1 aMW to serve.
While the economies of wind generation are steadily improving, the decision to incorporate the higher cost wind generation in its resource portfolio, the Company states, is primarily a societal and political one. Should the Commission authorize its inclusion for ratemaking purposes, the Company states, it will do so.
GARNET REPORT
Idaho Power requests that the Commission take administrative notice of the Garnet Report in making its ultimate determination as to whether or not to acknowledged the Company’s 2002 IRP. The Garnet Report outlines the Company’s plans for replacing the Garnet PPA in the Company’s resource stack. As noted in the Garnet Report, the Company is currently pursuing several wholesale firm purchase contracts and exchange agreements. As those contracts are concluded, they will be presented to the Commission for approval for ratemaking purposes.
Idaho Power contends that it is now optimistic that it will be able to replace the seasonal purchases specified in the Garnet PPA with a combination of resources including but not limited to seasonal firm purchase contracts and exchange contracts in the wholesale market that will allow the Company to obtain the capacity and energy that previously would have been supplied under the Garnet PPA at prices that are equal to or less than the cost of the Garnet PPA.
Idaho Power has investigated a number of potential alternatives to replace the Garnet PPA. The alternatives investigated include acquiring firm transmission rights and firm wholesale purchases, energy exchanges, adding or acquiring the output of generation resources located within the Company’s control area, and integration of demand side measures where cost effective.
Given the current forward market prices and the projected market clearing prices calculated by the Company’s Aurora Analysis Model, the Company contends that firm intermediate term wholesale purchase contracts and exchanges are the Company’s lowest cost options at this time. Given the projected market clearing prices for electricity, building generation resources, it states, is not the least cost option in today’s market and environment. However, it notes, a solution based on firm wholesale purchases and exchanges, while perhaps the lowest cost alternative at this time, is not equivalent to having a dispatchable generation resource located inside the Company’s control area.
The need for additional internal generation or construction of new transmission lines, the Company contends, is inevitable. The Company notes that there are risks associated with building new transmission and relying on a robust wholesale market to supply its future needs. However, if the firm exchange and wholesale purchase agreements identified in the Company’s Garnet Report can be consummated at current price levels, then the Company states that a commitment to construct new facilities can be reasonably deferred for a period of time.
In the near term, the Company states it will attempt to acquire available firm transmission rights and move expeditiously to negotiate firm exchange and wholesale power purchase agreements. If firm energy exchanges and wholesale purchases cannot be secured at favorable prices in the near term, the Company contends that it will need to immediately pursue acquisition/development of additional internal generation.
Based on the assumption that the Garnet PPA is cancelled, the Company has identified the following measures as potential alternatives to replace the Garnet PPA and to meet future resource needs:
Additional transmission & power purchase agreements
Build additional generation facilities inside Idaho Power’s service territory
Energy exchanges
Wholesale purchase contracts
Demand side measures
Interruptible sales
Build a jointly owned generation facility

The confidential portion of the Report further narrows and identifies the options the Company is actively pursuing.
Motion to Initiate Formal Proceedings
Motions to initiate a formal proceeding were filed by AARP and the Clean Energy Advocates on August 30, 2002. A similar recommendation was made by the Idaho Rural Council. Idaho Power filed an answer to the motions to which the Advocates responded.
AARP contends that the IRP does not provide a basis for concluding that the cost of future resources identified by the Company are prudent. AARP requests that a new docket be created and full scale hearings be held on the IRP, and on alternative resources more compatible with a least cost scenario for ratepayers. The present proceeding impacts future rate change requests, AARP contends, because it identifies the magnitude of loads to be met and the resources that will be chosen to serve them. Once those decisions are made, AARP contends that it will be too late to challenge the rate increases that follow. The time for public participation and full Commission deliberation, AARP contends, is now. AARP recommends that hearings be held and conducted in the service areas to be affected with an opportunity for all consumers to express their views. AARP identifies the following issues that need to be addressed at hearing: (1) capacity constraints: generation versus transmission; (2) load growth; (3) renewable resources such as wind power and bio-mass; (4) demand side measures and conservation; and (5) cogeneration. AARP notes that the IRP ascribes 0 megawatts to wind power, 0 megawatts to bio-mass, 0 megawatts for load reductions due to demand side measures, pricing options or buy back irrigation programs, 0 megawatts to cogeneration and 0 load reduction to conservation measures. The resultant IRP, AARP contends, is so seriously flawed that it cannot serve as a planning tool for future resource acquisition by the Company.
The Clean Energy Advocates believe that the Company’s 2002 IRP does not present a reasonable and prudent plan to meet Idaho Power’s customer load in a cost effective manner. Moreover, the Advocates believe that the IRP’s deficiencies, as well as the important changes in planning direction reflected in the IRP, are of a significant magnitude to warrant greater scrutiny. The Advocates ask the Commission to open a formal docket and hold hearings for the purpose of investigating cost effective resources which should be pursued in the short and long-term to the benefit of ratepayers but which Idaho Power has chosen to disregard in its IRP. The Advocates note that although the IRP repeatedly recognizes that peak power demands will likely drive the need for more resource acquisition, the IRP does not include any meaningful analysis of load management and other demand side resources. The Advocates believe that it is also appropriate to investigate the prudence of Idaho Power’s planning assumptions in the IRP, including the Company’s move toward more extreme water and weather conditions.
The Advocates reference testimony filed in Case No. IPC-E-01-42 and note that the extensive testimony filed in that case addressed many of the issues relevant to Idaho Power’s 2002 IRP. Because of the manner in which that case was ultimately resolved, the Advocates note these issues were never substantively addressed by the Commission. It seems regrettable, the Advocates contend, for that analysis to go to waste.
The Advocates propose that Idaho Power’s 2002 IRP be sent back to the Company pending the outcome of formal proceedings. The Advocates believe such proceedings could encompass numerous issues but request that the Commission investigate the following: (1) changes to the IRP development process, including more rigorous public and Commission review, as well as meaningful development of alternative methods of meeting loads; (2) specific DSM (both load management and general efficiency) resource alternatives; (3) specific alternative resource options, including increased acquisition of non-hydro power renewable energy resources and other distributed generation; (4) Idaho Power’s plans for meeting peak loads in the absence of the Garnet facility; and (5) investigation of the prudence of Idaho Power’s new planning criteria for more extreme water and weather conditions.
The Advocates believe that it would be in best interest of customers of regulated electric utilities in Idaho if the docket were generic and involved all the major electric utilities. It is not the Advocates intent for this formal proceeding to be adversarial, but rather more investigatory in nature, leading to a revised IRP process and the implementation of load management and alternative resource development.
Idaho Power’s Answer to Motions to Initiate Formal Proceeding
Idaho Power notes that the two motions and accompanying comments of the Advocates and AARP make essentially the same arguments. First, that the Company’s 2002 IRP is fatally deficient because the plan does not include sufficient consideration of demand side management and renewable resource acquisition as alternatives to the acquisition of capacity and energy from more traditional generating resources; and second, that the potential unavailability of the Garnet contract justifies initiating a greatly expanded formal proceeding to revisit the entire 2002 IRP as presented by the Company.
The Company states that the motions fail to recognize that the Commission has already issued Orders and initiated proceedings to address the issues that the Advocates and AARP desire to pursue through “full scale hearings, with testimony and cross-examination available to all parties.” The hearings requested by the motions, the Company contends, will require substantial amounts of Commission time and resources to duplicate processes the Commission has already put in place. The proposal that the hearings be expanded to include all three jurisdictional electric utilities in a single proceeding, the Company contends, will only exacerbate the problem. Idaho Power requests that the motions be dismissed without prejudice.
Idaho Power believes that once the Garnet Report is prepared and the Company’s reply comments filed, the Commission will be in a much better position to make a determination as to whether or not it has all the information it needs to make a decision to acknowledge the 2002 IRP.
Regarding demand side management and renewable resources, the Company contends that the motions fail to recognize that the Commission has already established a process for considering potential demand side management programs for Idaho Power. In Case No. IPC-E-01-13 (the DSM case), the Company states that after a long and detailed review of the Company’s demand side management programs, the Commission established a process by which potential demand side management programs are proposed and reviewed by a customer centered Energy Efficiency Advisory Group (EEAG). Reference Order No. 28894. As those programs are developed, funded and implemented, the Company contends that they will be included in the Company’s plans for meeting load.
The EEAG process, the Company contends, is the proper venue for Advocates and AARP to propose new DSM programs and to advocate increased expenditures for DSM programs. Granting Advocates and AARP’s motions, the Company contends, would by-pass this established EEAG process and would, in reality, render the EEAG process moot.
Advocates Reply
The Advocates contend in reply that neither argument put forth by the Company is a valid excuse for the Company’s deficient IRP. If the Company is permitted to file an IRP grounded on a resource which in all likelihood will not be acquired, and also lacking in any serious discussion of potential cost effective DSM and renewable resources, then the Advocates contend that the IRP process itself is rendered meaningless. If Garnet is a defunct resource, the Advocates contend that the 2002 IRP should be rejected for that reason alone. Idaho Power’s statement that DSM resources will be “developed funded and implemented” some time in the future, the Advocates contend, highlights the concerns expressed by the Advocates in their motion and comments submitted in response to the Company’s IRP. The critical point for purposes of the current motion, the Advocates contend, however, is that the IRP fails to discuss what those resources might be, even in the most general terms. Excellent information, the Advocates contend, is available through regional studies, experience of other regional utilities during the Energy Crisis of 2000-2001, and Idaho Power’s historical experience in DSM, all of which could have informed the IRP, but were ignored by the Company. Should the Commission grant the pending motion and hold formal hearings in this matter, the Advocates intend to present testimony of Tom Power, Bill Chisholm and Jeff Brooks, as well as Ms. Nancy Hirsch, Policy Director of Northwest Energy Coalition.
The Advocates understand and anticipate a reluctance to open a new docket, but believe that the IRP process, and perhaps general rate cases, are the only proceedings in which the Commission and the public must take a comprehensive look at Idaho Power’s resources and plans. The IRP process, they contend, is one of the few opportunities we have to take a step back, and ensure that the Company’s long-term planning is just and reasonable. IRPs are filed every two years, and the Company is not required to update the data contained therein during the interim.
The Advocates contend that they are not suggesting that the Commission “micro-manage” Idaho Power’s resource acquisition decisions. Nonetheless, the Advocates strongly urge the Commission to take a more pro-active role in scrutinizing Idaho Power’s IRP and ensuring that ratepayers interests are properly addressed therein. The Advocates contend that Idaho Power has a fundamental statutory mandate to provide “adequate, efficient, just and reasonable” service. Idaho Code § 61-302. The Advocates view the IRP as ideally a roadmap toward that mandate, which should include alternative routes. At present, they contend, the map is incomplete.
Based on its review of the Garnet Report, the Advocates filed a Sur-Reply Brief on December 3, 2002. The Advocates query what meaning the IRP holds if Idaho Power’s actual plans to meet customer loads change radically between the time the Company submits its IRP and the Commission reviews it? The Advocates are concerned that the IRP process is now reduced to a paper exercise, and a waste of the Company’s, the Commission’s, and the public’s time. Advocates believe that the IRP should be a truly integrated look at the Company’s resources and plans to meet customer loads; and further should be a document upon which the Commission and the public can rely when actual acquisition of resources are proposed. The 2002 IRP filed by the Company, the Advocates contend, fails that test.
The Advocates disagree with the Idaho Power’s contention that consideration of energy efficiency measures in the IRP would “short circuit” the EEAG. It is plain that consideration of the Garnet facility in the IRP, the Advocates contend, did not “short circuit” the Company’s negotiations over the Garnet PPA. As with its other resource acquisition efforts, the Advocates contend, that the Company should have taken the detailed information that is available for energy efficiency investments (including information developed at the EEAG) for analysis and consideration in the IRP. Unfortunately, it states, such analysis did not occur.
The Advocates contend that the Commission should also reject the Company’s argument that Commission precedent precludes the Company from closely considering potential investments in energy efficiency. Of course, the Advocates state, the Commission’s prior Orders are precedental to the extent that the facts and circumstances to the prior cases are applicable to the current matter. The circumstances of 2002, however, the Advocates state, are markedly different from the circumstances in 1989, when the Commission issued Order No. 22636, from which the Company prominently quotes. Indeed, the 2002 IRP, the Advocates note, plainly demonstrates that Idaho Power has done a reversal since the time when it planned to “use conservation as [its] next resource” and generally had “new found enthusiasm for conservation.” Reference Order No. 22636 at pp. 51-52. Moreover, the Advocates contend that the Commission’s historic findings that there is not “sufficient industry experience in estimating the quantity, quality and cost of conservation resources so that they are procurable and reliable,” must be re-evaluated under the circumstances of 2002. The energy efficiency industry, the Advocates contend, has matured sharply in recent years. Indeed, increasingly precise information, they state, is available about the potential for investments in energy efficiency in the Northwest; but this information, the Advocates contend, was disregarded by Idaho Power in its IRP. Available energy efficiency resources today, the Advocates contend, are certainly “reasonably confirmable” and should have been considered in the IRP.
The Advocates note that Idaho Power also eschews the need for and importance of “end use” studies. However, it is plain, the Advocates contend, that one must first ascertain the magnitude and character of a given DSM resource so that targets worth pursuit can be determined, strategies designed, budgets and implementation plans developed and resources acquired. If the first step – customer load research – is not taken then the follow up steps will not be forthcoming and no demand side resource will accrue.
DECISION
Idaho Power on June 28, 2002 filed its 2002 IRP with the Commission. The Company on October 30, 2002 filed its Garnet Report. Based on the supplemental information provided, Idaho Power recommends that the Commission acknowledge and accept its 2002 IRP. The Rural Council, Advocates, Commission Staff and Advanced Energy Strategies recommend that the IRP be rejected. Commentors suggest that the plan is flawed in the following respects:
1. That the public process was one sided and flawed.

2. That the plan fails to present a balanced consideration of demand side and supply side resources.

3. That the IRP failed to incorporate an end use load analysis.

4. That the IRP does not adequately address transmission constraints and related plans to remedy same.

5. That the IRP failed to consider what the Company could do in terms of conservation, efficiencies, shaping of demand curves and alternatives to meet projected shortfalls.

6. The wind industry contends that the IRP fails to recognize wind resources as a mature technology able to provide energy for utility-scale projects at a competitive price.

The following recommendations were made:
1. Require the Company to hire an outside facilitator to manage a process that would consider not only energy production, but also energy conservation, DSM and alternative/clean energy sources.

2. Recommend that the Company focus on creating a new diversified power base to include more renewable energy such as wind, solar, and bio-mass.

3. Recommend that the Company be required to conduct an end use load research study.

4. Recommend that the Company be required to evaluate various DSM alternatives, targeted conservation and pricing options – this time assigning appropriate value to each alternative’s potential to displace or defer the need to add new generation, transmission and distribution facilities.

5. Recommend that the Company evaluate DSM as part of the IRP process and include the results of that analysis in the IRP.

6. Recommend that the Company be required to solicit bids for peaking plants.

Idaho Power recommends that the IRP be acknowledged. Perceived shortcomings or holes in its IRP, it states, are remedied by its Garnet Report (and the alternative resources identified therein) and for lack of DSM and conservation by the recently formed Energy Efficiency Advisory Group. Idaho Power notes that it has filed with its IRP a Conservation Plan. Existing conservation is reflected in the IRP as reduced load forecast. The Company believes that using estimated or projected conservation savings to defer or displace other resources in the IRP would be inconsistent with prior Commission Orders and would short circuit the newly formed EEAG process. The Company believes that the EEAG process is the correct form for identifying and promoting new conservation programs, not the IRP.
AARP, the Advocates and the Rural Council recommend that the Commission initiate a formal proceeding or docket to explore the issues presented in their comments including the proposed change in water planning and load condition criteria and to provide a process for meaningful public participation.

Q. Should the 2002 IRP be accepted or rejected?
Q. If rejected, should the Company be directed to rework (with public process) and resubmit?
Q. Should the Company be directed to comply with any of the commenting party recommendations?
Q. Should formal proceedings or a new docket be initiated?

Scott D. Woodbury

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DECISION MEMORANDUM 26