AARP Motion.pdf

IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-02-
IN THE MATTER OF THE FILING BY
IDAHO POWER COMPANY OF ITS
2002 INTEGRATED RESOURCE PLAN
(IRP )MEMORANDUM IN SUPPORT
OF MOTION TO INITIATE
FORMAL PROCEEDING
ON JUNE 28, 2002, Idaho Power Company ("Idaho Power ) filed its year 2002
Integrated Resource Plan ("IRP" or "the Plan ). The Idaho Public Utilities Commission ("PUC"
or "the Commission ) has requested comments on the IRP.
It is the position of AARP Idaho (" AARP") that the IRP is so seriously flawed that it
cannot serve as the planning tool for future resource acquisition by Idaho Power. The Plan does
not identify those resources that will provide the least-cost, most reliable electric power for Idaho
ratepayers.
AARP therefore moves the Commission for an order opening a new docket to perform a
comprehensive review of this IRP and the planning process used by Idaho Power. In the
alternative AARP seeks Intervenor status in the present proceeding and requests that the
proceeding be transformed from a notice-aDd-comment procedure to one providing full-scale
hearings, with testimony and cross-examination available to all parties.
INTEREST OF AARP
AARP's goal for its 147 000 dues-paying members in the State ofldaho is that electrical
utility services be "affordable and available to all households"; that such services conform to
high standards for service quality and r:eliability"; and that utility rate structures "fairly distribute
costs among customer classes (and be) easy to understand and non-discriminatory.The Policy
Book: AARP Public Policies 2002 11-4 and 11-
AARP stands for an open process of public participation, with "broadly publicized
hearings on public utility rate change requests that are conducted in the service areas to be
affected (with an opportunity for) all consumers to express their views.
The present proceeding impacts future rate change requests 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, it will be too late to challenge the rate increases that follow. The time for
public participation and full Commission deliberation is now.
ISSUES
AARP has identified the following issues to be included in a full-scale hearing in which
the public can fully participate once Idaho Power provides more data than is in the IRP, with an
opportunity to cross-examine Idaho Power employees who are responsible for the IRP.
A New Situation
The most striking feature of the IRP is that it reveals Idaho Power as capacity
constrained. This fact drives the IRP and changes many of the rules under which Idaho Power
has operated for the decades during which it has had excess capacity. The PUC needs to explore
the implications of this new development, which is never analyzed in the IRP, and which has not
previously been examined before the Commission.
Load Growth
The IRP assumes that the 2.2% load growth of the past decade will hold true for the next
decade. It assumes further that irrigation loads will hold constant for the coming decade -
especially important projection, given the fact that the company s peaking problems are during
the irrigation season. Neither assumption is supported or justified in the IRP. Both should be
examined in a hearing before the Commission.
Capacity Constraints: Generation vs. Transmission
The IRP provides no analysis as to whether its alleged capacity constraints are primarily
generation-caused or transmission-caused. The IRP justifies construction of Gamet in large part
identifies 32% as the more realistic capacity rating - which would significantly reduce the per
kwh unit cost. More importantly, the IRP denigrates the value of wind power because "the wind
intensity at a given location is inconsistent" and therefore wind power is "less useful than energy
produced from resoUrces that can be dispatched to meet system load requirements." However, on
the same page, the IRP concedes that wind power ~ feasible "due to the generation and storage
flexibility of Idaho Power s hydroelectric system." No effort is made to quantify the value that
wind power enjoys because of the storage flexibility of a hydro system.
The IRP ascribes zero megawatts to wind power in the coming decade.
Biomass
The IRP candidly concedes that "interest in using animal waste or municipal sewage to
produce methane for power production is increasing and !PC anticipates that some farms and
feedlots may bring anaerobic digesters on-line during theIRP planning period." However
despite this concession, the IRP ascribes zero megawatts to biomass generation in the coming
decade.
Demand-side Measures and Conservation
Since the company s peak load problems are worst in the summer months, anything that
can be done to address the summer peaks can dramatically change the IRP's projected peak load
growth and the costly resource acquisitions needed to meet it. This is particularly true with
regard to irrigation loads.
The IRP notes that "Demand-side measures and pricing options that target peak-hour
demand reduction" - such as Time of Use rates for irrigators - can "address the peak deficiencies
facing Idaho Power Company." More importantly, the company s Voluntary Irrigation Load
Reduction program is said to have been "very effective in reducing summer demand during 2001.
Similar demand-side measures targeting peak reduction may also be effective.
Despite the success and promise of these programs, neither past results nor future
projections are quantified in the IRP. The document ascribes zero megawatts for load reductions
due to demand-side measures, pricing options, or buy-back irrigation programs in the coming
decade.
Cogeneration
The IRP concedes that it has benefited from nearly one hundred megawatts of energy
from "qualified facilities" with which it has PURP A contracts. The IRP provides no analysis as
to the reliability or cost-effeCtiveness of this energy. Despite many years' experience , and the
Commission s newly authoriZed expansion of the PURPA program, the IRP ascribes zero
megawatts to cogeneration in the coming decade.
Conservation
The IRP ascribes zero load reduction to conservation measures during the coming
decade. This is all the more inexplicable given recent studies identifying sizable amounts of low-
cost conservation measures available throughout the region.
CONCLUSION'
AARP stands for the proposition that ratepayers should provide "compensation only for
prudent costs." The IRP does not provide a basis for concluding that the cost of future resources
identified by Idaho Power Company are prudent. AARP therefore requests 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.
DATED this 30th day of August, 2002.
On behalf of AARP,
~7i.I 7J~
. cMahon
AARP Idaho