20040329Renaissance.pdf

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FAX NO. : 2087453525
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Mar. 12 2004 05: 01PM Pi
RENAISSANCE ENGINEERING & DESIGN PLlC
March 12, 2004
Idaho Public Utilities Conunission
O. Box 83720, Boise. ID 83720
Fax [phone]
CASE REFERENCE: IPC-O4-
Dear Commissioners:
Th1s letter is to simply comment and provide some observations about the contract agreement
between Idaho Power and United Materials in seeking approval for energy purchases from a wind
project in Montana.
I spent 11 years working for Idaho Power up to the last two years with my own consulting finn.
Most of my career has been focused on renewable energy sources. Right now I'm presenting at my
7th meeting this week talking about wind generation throughout the state. The first meeting was in
Boise, then Twin, Pocatello, Idaho Falls, Salmon Coeur D' Alene, and now here. I've talked to
hundreds of people this week about their opportunities in wind power. Most of the farmers and
ranchers l've been dealing with in the past two years are very interested in PURP A contracts at
about 10MW or slightly smaller.
I'm the project manager on the Sehwendiman Wind Farm going up in Idaho Falls this summer
which v..ill be 3MW and as you know the first mid scale commercial generation project in Idaho.
I've teamed up with development companies as well as investors and my thoughts are that this
industry is poised for great growth.
I'm confused about the obvious conflicts in dealing with Utilities even though from my own
experiences at the utility I know some of their issues. My confusion comes from the resistance the
utilities tend to show even despite their own acknowledgements that we arc facing serious if not
severe energy shortages in our future. 1 don t think the existing and new Natural Gas peaking plants
will meet the needs.
Often the utilities point out the varying output from a wind project as if it were flashing on and off
the grid moment to moment, which is not the case. Idaho Power in particular has a. tremendous
ability with the existing hydro system to deal with wind energy. At the PURP A level of 10MW and
under, however none of this really matters. In fact these small units are often simply modeled as
negative loads because they act on and affect the grid in similar manners. New turbines actually
have the ability to provide grid support and can be set at unity power factor or even leading or
lagging to help the grid -- even beyond that, an option exists even to provide volt:lge control.
During the nineties I was working mOTe with photovo1taics and there were numerous snldies about
7800 Alfalfa Lane, Melba Idaho 83641 phone [phone] fIDe 208-495.1555 email brian(g)clever-ideas.com
FROM : SACAJAWEA MOTOR INN FAX NO. : 208 743 3520 Mar. 12 2004 04: 19PM P3
the benelits of distributed generation sourccs like these PURP A projects become. Such benefits are
seldom discussed, but can be very significant.
I have several comments and suggestions about the value and issues needed to support growth of a
signitical)t wind generation industry in Idaho that would help reduce the risks to Idaho Ratepayers
for future energy price increases. The most significant benc1it to Idaho Ratepayers for wind is
obviously the elimination of fuel price risks. There arc a host of other benefits both short and long
term from environmental issues; indigenous generation sources; supporting farmers and ranchers
that are being squeezed financially from a host of issues (not the least of which are rising energy
costs); local jobs and revenues from paying for energy sources within the state instead of paying for
fuel and energy itself from out of state, etc, etc. By far the easiest argwnent. however, focuses very
simply ~U"ound the iact that commercially viable projects can be developed which have ~table costs
at established PURP A rates in a manner that the tOtal energy produced on an annual basis can be
estimated with quite a bit of accuracy. As the industry develops and more anemometers and wind
projects are built, the accuracy would impmvc as the hydro production modeling has over the past
50+ years. In fact, I have heard statistics that the year by year variability in wind resource
productions can be less than the variability with hydro itself.
My specific comments about this contract document are focused on the way the requirements on the
producer don t ill any way match the natUral characteristics of the resource itself and how they
actually seem to blatantly contradict my own understanding of what PURPA was implemented for.
In fact the only parl1:hat matched the intent of PURP A is in the last sentence of paragraph I of the
application where it simply states "Under PURP A, Idaho Power is obligated to purchase the
projects' electrical energy (1) when. the project is able to deliver energy to the Idaho Power
electrical SY$tel11 and (2) when Idaho Power bas adequate capacity at the point of delivery to accept
the Projects' energy deliveries.
All of the discussion offinn and non-firm and the creative iiPplication of the concept of'.surplus
and "shortfall" energies seem to be much more appropriate 10 a merchant power agreement, not
PURP A.
I am especially concerned about the absence of page 4 in the application, particularly when this
introduces such neW idea5. It is hard to tell how concerned I or any of my customers should be
about this concept (or the extent of the comments we should be making) when it is missing
infonnation. but ii'om what we see, it is a point of great c()ncern.
The requirement to submit monthly forecasts is logical. The penalizing of payments for over or
wlder production based on those estimates on natural resources seems to lack logic since those
sources are anticipated in the PURPA rules. The requirement to provide monthly hourly schedules
and day ahead preschedules is beyond comprehension and doesn t even make sense at the 10MW
and under level. This size is more noise on the grid and scheduling is a burden on the producer that
has no acmal benefit to the ratepayers especially and the utility particul.arly. Dispersed lOMW
projects will come on and off the grid just as the existing loads already do.
Also the 60 day cancellation if the Idaho Power monopoly is threatened would result in unbankable
projects in other places. The issue over environmental attributes is concerning, since nothing has
ever indicated historically that they could be a:tt.u;hed to the energy sold lmdel' P1 JRP A law.
7800 Alfalfa Lane, Mdba Idaho 83641 phone [phone] fax [phone] email brian~clevel'-ideas.com
FROM FAX NO. : 2087453525 Mar. 12 2004 05: 02PM P2
I don t know how this suppl1er can promise all these things, but my recommendation to the
commission is to check it out in more detail than is presented here. It is being held up by Idaho
Power as a triumph, but my fear is that it will result in a very substantial failure for the industry
itself. At the least it shouldn t be advertised as the wind project it is being sold as since really it is a
modified energy product provided by the transmission provider.
The wind industry in this state is very real in potential and could make a serious contribution to the
grid at a meaningful level. It would take a long time before this could threaten the grid in any way
and my professional opinion is that it would be a welcome addition ifIdabo Power and others could
get some real pr~iects in place and spend some time studying them.
Unfortunately this is all the time T have now to comment, but there are many things here which
could !'jet a very poor precedent for the entire industry itself and result in holding things back from a
development standpoint.
T am availablc at your request to discuss these and any other ideas that might involve promotion of
rencwablc energy projects or simply providing a reasonable opportunity for their developmellt
under existing laws.
7800 Alfalfa Lane, Melba Idaho 83641 phone [phone] fax [phone] email brian~c1c1(cr-ideas.com