20060201Phase II Workshop Final Report.pdf

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IDAHO POWER COMPANY
P.O. BOX 70
BOISE, IDAHO 83707
BARTON L. KLINE
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C: - L:: ~ior Attorney
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An IDACORP Company
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January 31 , 2006
Jean D. Jewell , Secretary
Idaho Public Utilities Commission
472 West Washington Street
P. O. Box 83720
Boise , Idaho 83720-0074
Re:Case No. IPC-05-
Phase II Workshop Final Report
Dear Ms. Jewell:
Please find enclosed for filing an original and seven (7) copies of the
Phase II Workshop Final Report regarding the above-entitled case.
I would appreciate it if you would return a stamped copy of this transmittal
letter for our files in the enclosed self-addressed stamped envelope.
pojY ~r
Barton L. Kline
BLK:jb
Enclosures
Telephone [phone] Fax [phone] E-mail BKlinMPidahopower.com
BARTON L. KLINE, ISB # 1526
MONICA B. MOEN, ISB # 5734
Idaho Power Company
1221 West Idaho Street
O. Box 70
Boise , Idaho 83707
Telephone: [phone]FAX: [phone]
E-mail: BKline (g) idahopower.com
MMoen
(g)
idahopower.com
Attorneys for Idaho Power Company
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF
IDAHO POWER COMPANY FOR AN
ORDER TEMPORARILY SUSPENDING
IDAHO POWER'S PURPA OBLIGATION
TO ENTER INTO CONTRACTS TO
PURCHASE ENERGY GENERATED BY
WIND-POWERED SMALL POWER
PRODUCTION FACILITIES.
CASE NO. IPC-05-
PHASE II WORKSHOP - FINAL
REPORT
BACKGROUND
On August 4 , 2005 , the Idaho Public Utilities Commission ("Commission
entered Interlocutory Order No. 29839 in which the Commission made initial
determinations on several issues relating to entitlement to published avoided cost rates
for wind-powered small power production facilities. In Order No. 29839 , the
Commission deferred a final determination on other issues raised in the case pending
the completion of a workshop process in which the parties would address needed
PHASE II WORKSHOP - FINAL REPORT, Page
studies, identify issues and discovery parameters. The Commission s Order provided in
relevant part:
Idaho Power, in conjunction with the two utilities and in
consultation with other parties to this case, is directed to file a
proposed schedule for initial workshop to identify issues , required
studies , and discovery parameters , to be filed as a proposal for
further procedure and related time line. An initial report
proposing same shall be filed with the Commission within thirty
days. Subsequent status reports should be filed every sixty days
thereafter. (Order No. 29839 at p. 10.
In conformance with this Order, Idaho Power submits the
following report.
PARTICIPANTS
The following people have attended one or more workshops, receive
meeting materials and summaries , and are considered active workshop participants:
Name and Affiliation
Mark Ahlstrom, WindLogics
Randy Allphin, Idaho Power
Bart Kline, Idaho Power
Bill Batt, Batt & Fisher
Dave Bergh, Elmore County Agribusiness
Karl Bokenkamp, Idaho Power
Dean Brockbank, PacifiCorp
James Carkulis, Exergy
Don Doskeland, Windland
Armand Eckert, Magic Wind
Bill Eddie, Advocates for the West
Gerald Fleischman , IDWR-Energy Division
Troy Gagliano , Renewable Northwest Project
Ric Gale , Idaho Power
James Gall, Avista
Mary Godwin , Advocates for the West
Name and Affiliation
LeRoy Jarolimek, Wind Advantage
Clint Kalich, Avista
Mike Youngblood , Idaho Power
Bob Lafferty, Avista
Bob Lively, PacifiCorp
Randy Lobb, IPUC
David Meyer, Avista
Jim Miller, Idaho Power
Joe Miller, McDevitt & Miller
Ken Miller, NW Energy Coalition
Monica Moen, Idaho Power
Tom Noll, Idaho Power
Lisa Nordstrom , PacifiCorp
Rich Rayhill, Ridgeline Energy
Peter Richardson , Exergy
Gary Seifert, Idaho National Laboratory
PHASE II WORKSHOP - FINAL REPORT, Page 2
Bruce Griswold , PacifiCorp
Jared Grover, Cassia Wind
John Hanson
John Hammond, Jr., Batt & Fisher
Mike Heckler, Windland
J. Humphries, B., Inc.
Glenn Ikemoto, Energy Vision
John Steiner, Idaho Wind
Rick Sterling, IPUC
Richard Storro, Avista
Blair Strong, Paine Hamblen
John Wirt
Scott Woodbury, IPUC
Brian Jackson, Renaissance Engineering
& Design
PROCESS
Four workshops and a settlement meeting have been held in Phase II of
this proceeding. The initial workshop was held on August 29 2005 and included
representatives from the three electric utilities, the Commission Staff and various other
parties interested in the development of wind-generating resources. By letter dated
September 6, 2005 , in compliance with Commission Order No. 29839 , Idaho Power
advised the Commission of the August 29 2005 workshop and the status of the
proceedings.
Between August 29 , 2005 and October 10, 2005 , the parties participated
in two additional workshops , the first on September 20 2005 , and the second on
October 10 2005. By letter dated November 7 2005 and in compliance with
Commission Order No. 29839 , Idaho Power advised the Commission of these two
workshops and described the status of the proceedings , including the issues list
developed by the parties.
On November 18 , 2005 , the parties participated in a fourth workshop. At
this workshop, the parties participated in providing information on local and regional
wind energy production forecasting, in clarifying funding for and the parameters of Idaho
PHASE II WORKSHOP - FINAL REPORT, Page 3
Power s Integration Study, in determining the protocol for upcoming settlement
discussions and in sharing and clarifying initial settlement proposals.
On January 12 , 2006, the parties participated in a meeting to discuss four
settlement proposals submitted by RNP and the Northwest Energy Coalition
PacifiCorp, Windland and Idaho Power Company. The parties received these
settlement proposals prior to the January ih meeting. In conformance with IPUC
Rule 272 , the parties to the January 12, 2006 workshop agreed that all discussions and
negotiations concerning the settlement proposals would be confidential. The group
emphasized that it was incumbent upon each party to maintain the confidential nature of
the workshop negotiations among each party s consultants, experts and advisors.
PROGRESS
Since the inception of the workshops on August 29 2005, participants
have achieved the following:
Established and accepted a set of operational principles that guide
the workshops.
Met with the consultant Idaho Power has retained to conduct the
wind integration analysis contemplated by Order No. 29839. At several of the meetings
participants have discussed the parameters of the analysis and offered suggestions as
to the design and objectives of the study.
Identified the issues to be addressed.
Provided information on wind production forecasting for purposes of
framing potential settlement proposals.
Explored several potential settlement options.
PHASE II WORKSHOP - FINAL REPORT, Page 4
OUTCOME OF THE JANUARY 12, 2006 SETTLEMENT MEETING
The parties to this case were unsuccessful in reaching a consensus
concerning an interim settlement agreement.
TIMELINE
The participants are not scheduled to meet again prior to completion of
Idaho Power s Integration Study in June 2006. Idaho Power has agreed to provide
periodic informal and e-mail status reports to a smaller group of interested persons
concerning the ongoing status of the preparation of the Integration Study.
Copies of the minutes of the November 18 , 2005 workshop have been
reviewed and approved by the participants and are attached to this report. A summary
of the January 12 , 2006 settlement meeting prepared by North Country Associates is
also attached. This Final Report to the Commission has been submitted to all of the
parties to this proceeding.
DATED at Boise, Idaho, this day of January, 2006.
~~(~
BARTON L. KLINE
Attorney for Idaho Power Company
PHASE II WORKSHOP - FINAL REPORT, Page 5
WIND/OF SETTLEMENT MEETING
PHASE 2 OF CASE No. IPC-O5-
JANUARY 12 2006,9:00 A.M. TO 1 :00 P.
AUDITORIUM EAST, IDAHO POWER CORPORATE HEADQUARTERS, BOISE, ID
Facilitation
Documentation
Susan Hayman , North Country Resources, Inc.
Natalie Chavez, Chavez Writing & Editing, Inc.
MEETING OBJECTIVE
To clarify, discuss, and make decisions regarding settlement proposals on issues related to Case
No. IPC-O5-22.
MEETING OUTCOMES
Susan Hayman, North Country Resources, welcomed participants and provided copies of four settlement
proposals. She reviewed the agenda and requested clarification on the confidentiality of the meeting. Per
the Idaho Public Utility Commission, settlement discussions were privileged and confidential. Parties to
the case agreed to be responsible for ensuring that any consultants or experts they brought to the
meeting maintained the confidentiality of the proceedings. Parties were unable to reach settlement on the
case.
PARTICIPANTS
Name and Affiliation Name and Affiliation
Randy Allphin, Idaho Power
Karl Bokenkamp, Idaho Power
Dean Brockbank, PacificCorp
James Carkulis , Exergy
Armand Eckert, Magic Wind
Bill Eddie, Advocates for the West
Gerald Fleischman, private citizen
Bart Kline, Idaho Power
Bob Lafferty, Avista
Randy Lobb, IPUC
Joe Miller, McDevitt & Miller
Ken Miller, NW Energy Coalition
Monica Moen, Idaho Power
Ric Gale, Idaho Power
Bruce Griswold, PacifiCorp
Lisa Nordstrom, PacifiCorp
Peter Richardson, Exergy
Celeste Schwendiman, Idaho Power
Brian Jackson , Renaissance Engineering & Design
LeRoy Jarolimek, Wind Advantage
Gary Siefert, Idaho National Laboratory
John Steiner, Idaho Wind
Rick Sterling, IPUC
Scott Woodbury, IPUC
Mike Youngblood, Idaho Power
Jared Grover, Cassia Wind
Mike Heckler, Windland
J. Humphries, B., Inc.
Glenn Ikemoto, Energy Vision
a Participated via conference call
January 12, 2006, Settlement Meeting
WIND/OF SETTLEMENT MEETING
(Case No. IPC-O5-22)
January 12, 2006
9:00am-12:30pm
Auditorium East
Idaho Power Corporate Headquarters
Boise, Idaho
Objective: To clarify, discuss and make decisions regarding settlement proposals on issues related to
Case No. IPC-O5-22.
Agenda
Time Topic Process
8:30am Coffee/Tea available in meeting room
9:00am Welcome, Meeting Overview - Susan Hayman
9:15am Settlement Proposals
RNP and NWEC - Bill Eddie
Key elements of proposal, including which Workshop Issues
the proposal addresses
Clarifying Q&A
Discussion
Idaho Power Company - Bart Kline
Key elements of proposal Key elements of proposal,
including which Workshop Issues the proposal addresses
Clarifying Q&A
Discussion
PacifiCorp - Lisa Nordstrom
Key elements of proposal, including which Workshop Issues
the proposal addresses
Clarifying Q&A
Discussion
10:30am Break Caucus opportunity
11 :OOam Resolution of Settlement Proposals
12:00pm Next Steps
12:30pm Wrap-up Adjourn
01112/2006
Information
Information, discussion
Discussion, decision
Information
WIND/QF WORKSHOPS ISSUE LIST1
Case No. IPC-E-05-22
1. Integration Costs
1. What are the utility's incremental costs, if any, for ancillary services needed to integrate
intermittent wind resources?
2. Should wind OF purchase prices be discounted for the cost of ancillary services? If so,
by how much?
3. If wind OF purchase prices are discounted for the cost of ancillary services, will the
90/110% band be eliminated?
1.4. What are the ancillary service benefits, if any, of geographically diverse wind projects
that should factor into the ancillary services cost calculation?
2. Avoided Costs
1. Is it discriminatory and/or illegal to set avoided cost rates for wind resources using a
methodology different from that used for other resources? (Removed)
2. Since RFP acquisition of power is outside of PURPA, should impacts of RFP
acquisitions even be considered when setting avoided cost rates?
3. If an interim avoided cost rate for PURPA projects is established until completion of the
integration study(s), would PURPA contracts under the interim rate be potentially
subject to a revised avoided cost rate in the future?
3. Published Rates Availability
Could the availability of published rates be limited in the interim2 to ensure that some
portion of total wind resource acquisitions come from RFPs? If so, how?
4. Project Configuration
Should the Commission take action to prevent developers of large OF projects from
configuring those projects into multiple smaller projects to qualify for the published rates? Is
it discriminatory or illegal to do so? If not, what action should be taken?
5.. Firm
What is the definition of firm for purposes of entitlement to published rates?
(T abled until integration study is complete)
1 Revised at Workshop #3, October 14, 2005
2 Interim = Between now and when the integration study results are in and the Commission issues an order.
Last Updated 01/1212006 Page1of1
Final Wind Energy Workshop
WIND ENERGY WORKSHOP #4, PHASE 2 OF CASE No. IPC-O5-
NOVEMBER 18,2005 9:30 A.M. TO 4:00 P.
AUDITORIUM WEST, IDAHO POWER CORPORATE HEADQUARTERS, BOISE, ID
Facilitation
Documentation
Susan Hayman, North Country Resources, Inc.
Natalie Chavez, Chavez Writing & Editing, Inc.
WORKSHOP OBJECTIVES
1) Clarify the parameters of the integration study by responding to a participant question list (including
who will pay for the study and the accessibility of study results, plus others raised by participants in
advance of the meeting)
2) Provide information on wind energy production forecasting for participant consideration when framing
potential settlement proposals
3) Determine the protocol for settlement proposal discussions
4) Share and clarify settlement proposals
WORKSHOP DECISIONS AND OUTCOMES
Wording of the fourth bullet on page 3 of the October 14 workshop minutes will remain as is.
Participants agreed at Workshop #2 on the purpose and products of the workshop series, but
discussion at this workshop showed some disagreement on whether the third purpose ('To look for
opportunities to identify an interim solution for factoring integration costs into PURPA avoided cost
calculations until such time as an adequate integration cost study(sj can be completed and a final
decision rendered") included settlement discussions.
The segment of the next meeting about study parameters will be open to all participants, but the
segment for settlement discussions will be open to parties to the case only.
ACTION ITEMS
Action Item Responsible Party Deadline
Communicate (via e-mail initially) with workshop Karl Bokenkamp ASAP
participants as study parameters are decided or
narrowed. Organize a meeting of the smaller
interested group, if needed.
Contact Karl Bokenkamp with comments All ASAP
regarding integration study parameters.
Prepare a status report on study parameters for Karl Bokenkamp Next meeting
the next meeting.
Notify Susan Hayman to schedule the settlement Bart Kline When ready
discussion (preferably in early January)
Submit requests for intervener status (contacting Participants who do not yet ASAP
Scott Woodbury for help, if needed)have intervener status
WELCOME, INTRODUCTIONS, AND OVERVIEW
Susan Hayman, North Country Resources, welcomed participants (Appendix 1). She then had people
introduce themselves fbr guests from 3TIER Environmental Forecast Group based in Seattle. She also
reviewed the agenda (Appendix 2) and principles of meeting conduct. Hayman encouraged people to be
as succinct as possible in their discussions at this workshop, given the technical nature of the subject and
size of the group.
Hayman asked about the accuracy of the fourth bullet on page 3 of the October 14 workshop minutes
Comparing to a case where wind generation does not have variability or uncertainty attributes (e.
block-loaded third-party generator)"). This issue had resulted in a flurry of e-mails between meetings, and
she wanted to ensure that verbiage in the minutes accurately reflected what was said during the
workshop, regardless of whether people agreed with the task. Bart Kline, Idaho Power, believed that the
verbiage accurately represented what was said at the meeting. Furthermore, the minutes were already
filed as part of a report to the IPUC. That report mentioned it as a point of contention. He also thought that
the issue could be discussed during the time dedicated to the integration study.
Hayman commented that, between meetings , she had sensed some confusion or differing perceptions on
the workshop purpose and products to which the group had agreed at Workshop #2. She reviewed that
information , asking for discussion. At that time, there was no dissension from the group regarding the
purpose and products of the workshop series.
WIND ENERGY PRODUCTION FORECASTING
Before the presentation from 3TIER Environmental Forecast Group, Hayman reviewed questions about
forecasting that had been included on the agenda, as well as several that she received via e-mail (see
Appendix 5 for these questions). She requested that people record additional questions on green cards
on the table and ask them after the presentation. Bill Eddie, Advocates for the West, then introduced
Pascal Storck and Rich Krauze. He had heard 3TIER representatives speak at a recent conference in
Seattle, was struck by their information about forecasting, and thought that their work related to several
issues that this group has discussed.
Storck used a PowerPoint presentation (see Appendix 3) to discuss 3TIER, other projects on which the
company has worked, and benefits and limitations of forecasting wind power. Wind power by nature has
highly variable output, with no output about 10% of the time and output of :020% of capacity half the time.
Forecasting does help deal with variability and explain a good amount of it so that wind can be integrated
into a utility s portfolio.
Forecasting involves several different time frames: short range (hours), medium range (days), long range
(weeks and months), and assessment (years). The accuracy of short-range forecasting is much higher
but that accuracy declines with longer time frames. Storck talked about using neural networks for hour-
ahead forecasting, numerical weather simulation for day-ahead forecasts, and statistical methods for
week- and month-ahead forecasting. He also reviewed oscillations that influence weather at different
temporal and spatial scales.
Storck then focused his presentation on each of the time frames , the methods and data required at each
time frame, and the relative level of accuracy at each (for forecasts based on climatology, persistence
and the advanced forecast system of 3TIER). Climatology looks at historical patterns of weather, while
persistence uses data from the National Weather Service. Short-range forecasts depend heavily on good
local data feeds for a project, using SCADA or some other system, while medium-range forecasts depend
on the best regional and global predictors of changes in the wind. When clients position meteorological
towers with anemometers , 3TIER can increase its ability to forecast for upwind projects. In the early
stages of a project, 3TIER can collect data and figure out the best locations for these towers. Long-range
forecasting requires modeling that incorporates the Pacific Decadal Oscillation and EI Nino Southern
Oscillation. Storck showed numerous graphs depicting relative accuracies of the various methods, as well
as graphs developed to provide clients the kinds of information they require for scheduling/trading. He
emphasized that the best value for forecasting lies at the day- and week-ahead time frames.
One participant asked about data sharing and confidentiality issues among projects. Storck said that
3TIER has developed some complex confidentiality agreements with clients and parameters guiding
which data can be used where. When asked about the value of geographic dispersion, Storck thought
that results of the integration study would probably provide the best answers. The issue of whether
forecasting is sufficiently accurate to entertain elimination of the 90/110% band was raised. Because
Storck wasn t very familiar with the 90/110% band , he was unable to address the issue.
Hayman reminded participants that the issue of changing or eliminating the 90/110% band had been
removed from the issues list. She then revisited the questions that she had reviewed earlier and had
Storck address any that hadn t already been answered through the presentation. During his responses
the following information was provided:
Local vs. regional variability of wind-Results of the integration study are likely to help address this
issue.
Forecasting services available to utilities/developers-only a few credible forecasting companies exist
in the United States. The Bonneville Power Administration, Avista , PacifiCorp, and several non-
utilities in the Northwest are currently using forecast services.
Use of forecasting by small wind projects-Storck commented that wind projects tend to cluster, so
3TIER has set up a modeling framework for the region.
. Costs-If costs can be shared, the price per developer/utility drops. If one developer owns all the
wind projects , 3TIER offers a discount because of economies of scale. If all the power generated is
going to Idaho Power, then it may make sense to have the utility pay for the forecasting, but if power
is also dispersed to other utilities, then it may make sense to have the developer pay.
Ability of forecasting to reduce need/cost for ancillary services-To the extent that forecasting can
shave off some of the deviations, fewer ancillary services can be dispatched. Also, because days with
lots of ramping result in the greatest need for regulation reserve, forecasting can be especially helpful
in predicting those days with no wind or consistent wind when less regulation reserve is needed for
the system to carry on. The cost for forecasting starts at about $2 000 per month per project.
Transference to other projects-Forecasts are highly specific to a certain site , but the system is
transferable worldwide. If several projects are clustered, the system can be set up for that cluster, an
approach that significantly reduces cost. A cluster might cover a fairly large area (e.
100 km x 100 km).
INTEGRATION STUDY
Hayman called participants' attention to flip charts with questions pertaining to the integration study (see
Appendix 5). Some of these questions were carried over from the October 14 workshop; others came via
e-mail in the interim. Questions 8 and 9 were bin items at the last workshop. She directed these questions
to Karl Bokenkamp, Idaho Power, and Bob Zavadil, EnerNex. Zavadil participated via telephone. She
also recorded on flip charts any options that were suggested during the discussion (Appendix 5).
Questions and responses are provided in numerical order below.
1) Does the base case assume that wind is block loaded?
Yes, for another client, EnerNex had used a flat block of wind for the base case (incorporated as a
purchase would be). They propose to do the same here, based on the questions to be answered. Then
case 2 is the actual wind energy produced but it is shaped by the weather. Both cases incorporate the
same amount of wind , but in case 2, the variability is included (and therefore the costs of that variability).
Some kind of forecast is also included in the second case. Some participants believed that the base case
should incorporate hourly block loading rather than daily block loading. Hayman suggested that people
interested in the details contact Bokenkamp.
2) Over what time frame do you propose to model wind?
EnerNex had planned to use daily blocks rather than a month-long flat block. Participants pointed out that
this design does not provide an estimate of the value of the forecasting service. Bokenkamp responded
that determining the value of forecasting has not been a question to be answered through the integration
study up to this point. Mike Heckler, Windland , reminded the group that, according to Mark Ahlstrom
Wind Logics , the model would use wind data for every 10 minutes over two years. Which two years hasn
been determined yet, but they should be years with actual meteorological data available.
3) Over what geographic area will WindLogics be developing the historical wind speed data?
Zavadil said that the area would cover all of Idaho Power s service territory and likely the margin around
the edges for the intermediate grid. Within that area, they would identify areas that have some potential
for wind development, depending on wind characterization, as well as areas that have been suggested for
wind projects. He added that they aren t going to come up with a grid and start the computers without a
review, especially from Idaho Power.
4) How many, and where, will wind turbines be located in the model that converts WindLogics
wind-speed data into estimated wind generation amounts?
Heckler reiterated that there would be no one integration cost; results would depend on the assumed
level of penetration. He wondered what assumption would be used for the model. Zavadil responded that
the base case scenario was 300 MW. Many participants didn t believe that this assumption was
adequate. Bokenkamp clarified that the intent is to consider multiple iterations with differing levels of
penetration. The group began talking about hourly vs. daily block loading again. One option that was
suggested was to look at different time frames to see trends, calculate the sensitivity, and see where the
actual wind production was best described. Zavadil commented that load was uncertain as well. He has
heard that the Aurora model used by Idaho Power is relatively efficient and gives hourly shape
information. Ultimately, the wind model would be designed based on the questions to be answered.
Hayman reminded people to provide input to Bokenkamp.
5) How will the value of a wind forecasting service be estimated?
This issue was not contemplated for the original study. Zavadil commented that in a New York study,
scenarios were included for wind "just showing up" and for some forecast. Results indicated considerable
benefit, even without having a perfect forecast.
6) Does the natural variability of monthly output predicted by WindLogics wind speed data
exceed the current QF requirement to predict monthly output within a :!:10% band?
Zavadil knows that WindLogics expected to forecast next-day wind rather than hour-by-hour wind for the
next day. He wondered if people wanted a net of 30 next-day forecasts. Several participants commented
that they were concerned about a quarter-ahead forecast since the 90/110% band applies monthly.
Heckler clarified that developers want to understand whether the IPUG is asking for a term that can t be
verified through physics. Under the current band, if projects fall outside the 90/110% band, they are
penalized on price. He believed the issue should be addressed in the study. Gary Seifert, Idaho National
Laboratory, added that, on an annualized basis , wind might be :1:10%, but monthly it could be off by 40%
with no warning. Fleischman suggested comparing integration costs with the 90/110 rules and minimum
availability guarantee (MAG) rule to determine whether integration costs change with those rules. IPUG
staff asked how this question was related to integration costs. To them, it seemed a contractual issue
related not to integration costs but to reliability protection.
7) How will the integration study results be used in the current IPC IRP process, and can the
results be used to define an "IRP" price term in any interim solution.
Bokenkamp said that Idaho Power staff haven t developed a set plan at this point. Results would be used
in the Integrated Resource Plan if they were available in time. He thought that the IRP would include
integrated costs associated with different levels of wind and penetration. The last IRP had a scenario with
000 MW of wind. Results should help Idaho Power refine costs associated with integrating wind project.
8) What information from the integration study will be available to workshop participants?
Hayman suggested that the group talk further about who "owns the study." Participants agreed that the
study belonged to Idaho Power. Kline said that, although the IPUG charged Idaho Power with hiring a
consultant, he wanted to ensure that participants could provide input to the study. The company would
have to account for how it responded to that input. However, ownership of the study didn t mean that
results would be unavailable. Kline foresaw filing the report in its entirety if the company believed that the
report was accurate and defensible. Others could criticize the report if they wanted. Zavadil commented
that WindLogic s computers have a time slot available this fall. He d like to get started right away setting
study parameters and collecting archival data from Idaho Power. He anticipated that parts of the analysis
would be available after the first of the year. Part of the study would involve working with Idaho Power
analysts to set up the Aurora market simulation. He wasn t sure but thought results would probably be
coming out around February or March. Bokenkamp added that the study was expected to be completed
in June.
Hayman suggested that people interested in the details of the integration study coordinate with
Bokenkamp. Several people volunteered to do so (Heckler, Fleischman, Ikemoto, James Carkulis, Jarod
Grover, Bruce Griswold, and Brian Jackson). Bokenkamp said that he hadn t envisioned holding separate
meetings. He would e-mail information out to the larger group and anyone interested can contact him with
input. If the situation warranted a meeting, he would schedule one. He will also report on final study
parameters at the next workshop. Hayman offered facilitation support, if needed.
9) What is the cost for "adding" to the study (i., workshop participants ' suggestions)? How will
this be covered?
(See the response for question 8 above.
PROTOCOL FOR SETTLEMENT PROPOSAL DISCUSSIONS
Hayman said that several people have talked to her about concerns for settlement discussions , especially
regarding confidentiality. Kline added that protocols already exist for cases before the IPUC. Negotiations
are considered privileged, and information cannot be used or discussed outside the meetings. The IPUC
can take action against parties violating the confidentiality of proceedings. But this workshop series has
been open to participants who are not parties to the case. He wondered what protocols could be
implemented to encourage active participations but ensure confidentiality. Several issues were raised in
the ensuing discussion:
Although the deadline for intervention has passed, Scott Woodbury, attorney for the IPUC, believed
that the Commission would entertain late application for intervener status if there were settlement
proposals before the group.
Some sort of nondisclosure agreement might be developed to cover participants who are not parties
to the case.
Gerald Fleischman , Idaho Department of Water Resources, didn t think that his agency would apply
for intervener status or sign a nondisclosure agreement. Nor did he think that his interests could be
fully represented by others who are party to the case.
IPUC staff are not certain that all issues are appropriate for settlement. Woodbury added that a
discussion of which issues are appropriate for settlement could occur in a workshop prior to any
settlement discussions. Randy Lobb, IPUC, said Commission staff believe that the IRP method
provides an interim means for obtaining a contract, although not at the published rate. The
Commission order had not specified that an interim published rate was to come out of the workshop
series. Other workshop participants disagreed, pointing to the third purpose agreed to by participants
at Workshop #2 ("To look for opportunities to identify an interim solution for factoring integration costs
into PURPA avoided cost calculations until such time as an adequate integration cost study(s) can be
completed and a final decision rendered). Lobb agreed that the first and second purpose developed
at Workshop #2 had been specified to in the order, but the third one was added by this group.
Participants can talk about it, but it isn t an IPUC requirement. Woodbury commented that, if
Commission staff are going to participate in settlement discussions, they have to first apprise the
Commission of their intent and get input from the Commissioners.
Developers are concerned about the time frame. They are looking at a "cliff on December 31 2007
and wanting to get their projects on the ground. Lobb cautioned against expanding the scope of the
workshop since the settlement process could last longer than the integration study if the Commission
opened up a settlement proposal for public comment. Glenn Ikemoto, Energy Vision , pointed out that
negotiating an IRP-based price might take just as long.
Hayman asked about meeting on December 2, as planned, to talk about the proposal that Eddie had
provided before the October 14 workshop (see Appendix 4). Kline commented that Idaho Power is
working on some aspects of interim settlement (addressing concerns about disaggregation as well as
other issues) but would not be ready by December 2. He believed that the company s work would be
completed sometime in December, so a settlement discussion could occur in early January. In the
meantime , any participants who are not already parties to the case may apply for intervener status or
provide their concerns and interests to someone who already has intervener status. Once Hayman hears
from Idaho Power that staff are ready with their proposal, she will coordinate with participants on the time
and date of the next meeting. The settlement discussion will be open to parties to the case only.
Woodbury said that, if participants arrive at a consensus position, that position could be included in the
report to the IPUC with recommendations.
Eddie asked that participants consider how the process ends. It would be unproductive to continue
workshops for the next eight months. Yet litigation would also be unproductive. He hoped that people
could work out some arrangement that would "tide people over" until the study was complete and
conclusions drawn from the results.
NEXT STEPS
Hayman reiterated that the date of the settlement discussion has not yet been set. Once she hears from
Kline, she will work with parties to the case to plan that meeting, probably in early January. There will be
at least two proposals to consider, one presented by Idaho Power and the other presented by the
Renewable Northwest Project and Northwest Energy Coalition (through Eddie). Participants pointed out
that Bokenkamp had agreed to share details of the integration study at the next workshop. Hayman
agreed to start the meeting with these details so that anyone interested could participate in that segment
of the meeting.
WRAP-UP AND EVALUATION
Before adjourning, Hayman asked for evaluative comments on today s workshop. Although many
participants shared positive aspects of the meeting (such as progress made and the interesting
forecasting presentation), the following input and constructive suggestions were provided:
The afternoon was sluggish. Morning and afternoon agenda items could have been switched.
There appears to be significant disconnect between parties' expectations.
Further integration study discussions should be conducted with a smaller group of workshop
participants who understand nuances of the issues.
The integration study is unlikely to solve all problems.
Many of the problems identified in this group have been resolved elsewhere in the United States. But
this group is "reinventing the wheel " which is taking too long.
Everyone knows that the integration cost will likely be somewhere between $2.50 and $5.00 per MWh
of wind energy delivered. But this group is spending considerable time trying to nail that number down
and ignoring other parts of the contract. Idaho will lose out because windmills will go elsewhere.
WindLogics has a window in NovemberlDecember for use of its computer. Hopefully, Idaho Power
will have the integration study details worked out to make use of that window. "Delay is the enemy of
wind in Idaho.
ApPENDIX 1-PARTICIPANTS
Name and Affiliation
(Shading indicates people who did not participate in person or by phone.
Name and Affiliation
Mark Ahlstrom, WindLogics
Randy Allphin, Idaho Power
Jeb Allred, Idaho Power
Bill Batt, Batt and Fisher
Dave Bergh, Elmore County Agribusiness
Karl Bokenkamp, Idaho Power
Dean Brockbank, PacificCorp
James Carkulis, Exergy
Roald Doskeland, Windland
Armand Ecker, Magic Wind
Bill Eddie, Advocates for the West
Gerald Fleischman, IDWR-Energy Division
Troy Gagliano, Renewable Northwest Project
Ric Gale, Idaho Power
James Gall, Avista
Mary Godwin, Advocates for the West
Bruce Griswold, PacifiCorp
Jared Grover, Cassia Wind
Rick Haener, Idaho Power
John Hanson
John Hammond, Jr., Batt and Fisher
Mike Heckler, Windland
J. Humphries, B.R.E., Inc.
Glenn Ikemoto, Energy Vision
Brian Jackson, Renaissance Engineering & Design
LeRoy Jarolimek, Wind Advantage
" Participated via conference call
Clint Kalich, Avista
Bart Kline, Idaho Power
Rich Krauze, 3TIER Environmental Forecast Group
Bob Lafferty, Avista
Bob Lively, PacifiCorp
Randy Lobb, IPUC
David Meyer, Avista
Jim Miller, Idaho Power
Joe Miller, McDevitt & Miller
Ken Miller, NW Energy Coalition
Monica Moen, Idaho Power
Tom Noll, Idaho Power
Lisa Nordstrom, PacifiCorp
Rich Rayhill, Ridgeline Energy
Peter Richardson, Exergy
Gary Seifert, Idaho National Laboratory
John Steiner, Idaho Wind
Rick Sterling, IPUC
Pascal Storck, 3TIER Environmental Forecast Group
Richard Storro, Avista
Blair Strong, Paine Hamblen
John Wirt
Scott Woodbury, IPUC
Mike Youngblood, Idaho Power
Bob Zavadil, EnerNex
ApPENDIX 2-AGENDA
WINo/QF WORKSHOP #4 (Case No. IPC-O5-22)
November 18, 2005
9:30am-4:00pm
Auditorium West
Idaho Power Corporate Headquarters
Boise, Idaho
Objectives:
1) Clarify the parameters of the Integration Study by responding to a participant question list
(including who will pay for the study and the accessibility of study results , plus others raised by
participants in advance of the meeting)
2) Provide information on wind energy production forecasting for participant consideration when
framing potential settlement proposals
3) Determine the protocol for settlement proposal discussions
4) Share and clarify settlement proposals
Agenda (breaks taken as needed)
Time Topic Process
9:00am CoffeelTea available in meeting room
9:30am Welcome, Introductions and Meeting Overview Susan Hayman Information
9:45am Wind Energy Production Forecasting - 3 Tier Environmental Consultants
What are the forecasters learning about the local versus regional
variability of wind?
What forecasting services are available to utilities and
developers?
How are other utilITies and developers using forecasting to
integrate wind into their system
What are the lessons learned?
Information, discussion
11:45am Lunch (on your own)
1 :OOpm Integration Study
Clarify study parameters - Idaho Power
study funding -Idaho Power
Access to study informationlresults
Information, discussion
2:30pm Protocol for SetUement Proposal Discussions Information, discussion
Parties decision
3:00pm
3:30pm
3:45pm
4:00pm
Agenda (confd)
Settlement Proposals
Share proposals
Clarifying questions about the proposals
Next Steps
Workshop schedule
Agenda items for next workshop
Information
Information, discussion
group decision
Wrap-Up and Evaluation - Susan Hayman Discussion
Adjourn
Final Wind Energy Workshop
ApPENDIX 3-WIND ENERGY FORECASTING PRESENTATION
Wind Energy Forecasting
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3TIER Group
Incorporated June 2001
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best of academic research into prac6ce
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2400 MW IAind energy forecasting
2000 lAW hyctopower forecasting
11 employees nearly aI/with advanced
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Overview of methods, reasons, and definitions
Observations
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EI Nino Southern Oscillation
Pacific Decadal Oscillation
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Hours Days Years
S~inning or Tronsmis.ionfirming resenres scheduling
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20 min value -NO ASSUMPTIONS REGARDING FORM OF
RELATIONSHIPS
Time ofDay.
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METHODOLOGY MUST BE CAREFULLY
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WIND FORECASTING TECHNOLOGIES
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Sub-project Description: Identify and
develop statistical space-time methods
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energy forecast accuracy at wind energy
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Network University of Washi'1gton .
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Persistence Forecasting: 95% confident that power swing less than 75 MW
3TIER Forecasting: 95% confident that power swing less than 50 MW
Distribution of Hour Ahead Errcrs for a 100 MW Project(Summer)
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Forecast available by 5 AM Local Time
Total MWH for next day (midnight to midnight)
Day Ahead Forecasts Errors
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ApPENDIX 4-INTERIM SETTLEMENT PROPOSAL
INTERIM SETTLEMENT PROPOSAL
(presented by RNP and NWEC 11/18/05)
TI1e purpose of this interim settlement agreement ("Agreement") is to foster the growth
of renewable energy generation resources in the State of Idaho, consistent with the Public
Utilities Regulatory Policy Act ("PURP
),
(Uld in a manner that is fair and reasonable
for customers of electric utilities subject to the jurisdiction of the Idaho Public Utilities
Commission ("IPUC") and all interested parties; and to ensure ratepayers can benefit
from the federal production tax credit for wind energy before it expires.
1. Idaho Power agrees to complete its culTcntly pending Request for Proposals
("RFP") for wind resources by January 31, 2006, by annOlmcing the completion of a
signed power purchase agreement (or other agreement for acquisition of wind resources),
or by otherwise announcing the final outcome of the RFP. No specific result from the
RFP is required by this paragraph. 'Ihis paragraph shall not be constmed to impact in any
way the full authority ofthe IPUC with respect to its review of any power purchase
agreement or other outcome ofthe RFP.
2. No later than June 30, 2006, Idaho Power agrees to complete a study of the costs
and benefits of integrating wind generation resources within its service teITitory as part of
the 2006 Integrated Resource Plan ("IRP") development process. Idaho Power agrees to
provide reasonable updates to and seek input from the parties of record in IPUC Case No.
IPC-OS-22 and the 2006 IRP Advisory ColU1cil on such study. It is the intent of the
parties to this Agreement that the study, together with the results of similar studies
undertaken by other utilities and other new infonnation, may form the basis for new
policies on the implementation of PURPA as it applies to wind resources; however, no
party waives any right to challenge any policy change proposed in response to such
study.
3. During this Agreement's effectiveness , any PURPA qualifying facility utilizing
wind as the motive source of power which does not hold a power purchase agreement
PPA") signed by a utility ("New Wind QF'shall be eligible for the published avoided
cost rates as described in IPUC Order No. 29632, subject to the following additional
terms limitations:
a. All QFs seeking to receive a 20-year PPA per IPUC Order No. 29632 must
have separate points of interconnection to a utility s system. The purposes of this
subparagraph are to ensure the IPUC's 10 aMW eligibility limitation provided in
Order No. 29632 cmmot be circumvented; and to ensure the ratepayers can benefit
from the potential cost savings otTered by larger conuncrcial renewable energy
projects acquired through competitive processes.
b. PP As for New Wind QFs shall not include the "9011100./0 band" described in
Order No. 29632.
INTERIM SETILEMENT PROPOSAL -- I
c. 111.:: published avoided cost rates paid to New Wind QFs shall be reduced by
/0 as a reasonable interim estimate of the cost of integrating wind power to the
electric grid at a system-wide wind integration level of 15%, based upon the
results of available studies conducted by other utilities and entities. For example
the levelized published avoided cost rate in 2006 of $60.99/MWh is reduced to
$57.94/MWh.
d. PP As for Ne\v Wind QFs shall include a mechanical availability guarantee
similar to that proposed by PacitiCorp and Schwendiman Wind LLC in IPUC
Case No. PAC-O5-09.
e. To ensure the acquisition of electric power from Wind QFs is fair and
reasonable to ratepayers and in the public interest, Idaho Power shall not be
required under this settlement to enter a PP A with a New Wind QF at the
published avoided cost rates if such PP A would cause the total amount of
intennittent wind power resources for which Idaho Power has entered enforceable
contracts for purchao;;e and/or construction, together with intennittellt wind power
resources that have been installed on Idaho Power s system to serve Idaho Power
customers, to exceed 450 MW of installed capacity prior to the expiration of the
temlS of this Paragraph per subparagraph 3(h). In consultation with the parties of
record in IPUC Case No. IPC-05-, Idaho Power shall establish a wind power
integration priority list for implementation of this interim cap. To maintain
position on the wind power integration priority Jist, wind projects will be required
to achieve appropriate development milestones and commercial operation by
dates certain.
f. Unless otherwise provided in this Agreement, the tenns and limitations on
PPAs approved by the IPUC in Order No. 29632 shall remain effect.
g. Subject to regulatory approval, any Wind QF which holds a PP A signed by a
lItil ity may rescind slIch prior PP A ,md receive a new PP A under the tenus of this
Agreement; provided however that such Wind QF will be subject to subparagraph
3(a) of this Agreement.
h. TIle tenns and requirements of subparagraphs 3 (a) through (g) shall expire
upon the IPUC's issuance of a final and unappealable order in Case No. IPC-
05-, or on December 31, 2006, whichever is earlier.
i. A New Wind QF that becomes eligible for a PP A pursuant to the above
provisions shall not be required to satisfy the "grandfathering" criteria set forth in
IPUC Orders No. 29851 and 29872.
4. Idaho Power agrees to enter appropriate agreel11ent(s) with a qualified fiml to
establish a centralized wind power forecast system ("Forecast System ) for the Idaho
Power service territory. The intent of the Forecast System is to provide Idaho Power with
hour-ahead, day-ahead, or other forecasts of wind capacity and energy production from
INTERIM SETTLEMENT PROPOSAL -- 2
all wind facilities larger than 5 MW in size (instalIed) to best optimize the integration of
wind power into Idaho Power s electric transmission system. AIl New Wind QFs shall
be required to provide any necessary infonnation to the Forecast System provider
(subject to appropriate confidentiality tenns); and other wind projects may also opt-in to
the Forecast System.
INTERIM SETILEMENT PROPOSAL -- 3
Final Wind Energy Workshop
ApPENDIX 5-Fup CHART NOTES
Wind Energy Production Forecasting
1) What are forecasters learning about local vs.
regional variability of wind?
2) What forecasting services are available to
utilities/developers?
3) How are other utilities/developers using
forecasting to integrate wind into their systems?
4) What are the lessons learned?
Study Questions
1) Does the base case assume that wind is block
loaded?
2) Over what time frame do you propose to model
wind?
3) Over what geographic area will WindLogics be
developing the historical wind speed data?
4) How many, and where, will wind turbines be
located in the model that converts WindLogics
wind-speed data into estimated wind generation
amounts?
5) How will the value of a wind forecasting service be
estimated?
Questions Holding for Bob
How is EnerNex determining how much wind will
be block loaded on a particular day?
In what time increments? (10-minute increments
over 2 full years) ~ wind speed and direction
Options
1) Hourly instead of daily
at least for one month
monthly, daily, weekly, hourly
2) Differences: base actual
base ~ forecast
3) Haven t selected which years to use for 10-minute
increments
4) Broaden beyond service area
5) Multiple penetration-iterations of model with
different levels of penetration
Wind Energy Production Forecasting
5) How can small wind projects procure/use
forecasting?
6) Who pays? Cost?
7) Can it reduce need/cost for ancillary services? If
so, how much?
8) How accurate? Capabilities?
9) How localized are forecasts? Transferable to other
projects/places?
Study Questions
6) Does the natural variability of monthly output
predicted by WindLogics wind speed data exceed
the current QF requirement to predict monthly
output within a :!:10% band?
7) How will the integration study results be used in
the current IPC IRP process, and can the results
be used to define an "IRP" price term in any
interim solution.
8) What information from the integration study will be
available to workshop participants.
9) What is the cost for "adding" to the study (Le.
workshop participants' suggestions)
How will this be covered
Protocols
1) Settlement negotiations are privileged-cannot be
disclosed2) Parties to case only involved in settlement
discussions
parties and interveners
3) All workshop participants involved in settlement
discussion
4) Ask Commission to allow for late interveners
Options
6) Does variability on monthly output exceed the
current QF requirement to predict monthly output
within :!:10% band?
7) Compare integration costs under 90/110% and
MAG
Study is to identify integration costs (same energy in
both cases)
Case 1
Block loaded, daily
Base
Case 2
Forecasted, actual simulated
Action Items
1) Karl will communicate (e-mail, initially) with
workshop participants as study parameters are
decided/narrowed. Those with comments
communicate with Karl. If a small group needs to
meet face-to-face, Karl will arrange this. Susan is
available for support as needed.
2) Idaho Power will provide status reports on study at
subsequent workshops
3) Idaho Power will notify Susan when ready to
schedule settlement discussion. Susan will
schedule with parties.
4) Those not currently parties can submit request for
intervener status. Check with Scott for information.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 31 ay of January, 2006, I served a
true and correct copy of PHASE II WORKSHOP - FINAL REPORT upon the following
named parties by the method indicated below, and addressed to the following:
Scott Woodbury
Deputy Attorney General
Idaho Public Utilities Commission
472 W. Washington Street
O. Box 83720
Boise, ID 83720-0074
scottwoodburv(g) puc.ldaho.qov
Hand Delivered
S. Mail
Overnight Mail
FAX [phone]
E-mail
Peter J. Richardson
Richardson & O'Leary PLLC
515 N. 27th Street
O. Box 7218
Boise, I D 83707
peter~ richardsonandolearv.com
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x U.S. Mail
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FAX [phone]
E-mail
James T. Carkulis
Exergy Development Group of Idaho LLC
1424 Dodge Avenue
O. Box 5212
Helena, MT 59604
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x U.S. Mail
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FAX
Richard L. Storro
Director, Power Supply
Avista Corporation
1411 E. Mission Avenue
O. Box 3727, MSC-
Spokane , WA 99220-3727
dick.storro (g) avistacorp.com
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FAX [phone]
E-mail
R. Blair Strong
Paine , Hamblen , Coffin , Brooke & Miller
717 West Sprague Avenue , Suite 1200
Spokane , WA 99201-3505
r.blair.stronq (g) painehamblen.com
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Dean J. Miller
McDevitt & Miller LLP
420 W. Bannock Street
O. Box 2564
Boise , ID 83701
joe (g) mcdevitt-miller.com
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E-mail
CERTIFICATE OF SERVICE, Page
Jared Grover
Cassia Wind LLC and
Cassia Gulch Wind Park LLC
3635 Kingswood Drive
Boise, ID 83704
Hand Delivered
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FAX
Armand Eckert
Magic Wind LLC
716-B East 4900 North
Buhl , ID 83316
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FAX
Glenn Ikemoto
Energy Vision LLC
672 Blair Avenue
Piedmont, CA 94611
qlenni
(g)
pacbell.net
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FAX [phone]
E-mail
Bob Lively
PacifiCorp
One Utah Center, 23rd Floor
201 S. Main Street
Salt Lake City, UT 84140
bob.lively(g) pacificorp.com
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Lisa Nordstrom
PacifiCorp
825 N.E. Multnomah , Suite 1800
Portland , OR 97232
lisa.nordstrom (g) pacificom.com
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FAX [phone]
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William M. Eddie
Advocates For the West
1320 W. Franklin Street
O. Box 1612
Boise, ID 83701
billeddie(g) rmci.net
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Troy Gagliano
917 S.W. Oak Street, Suite 303
Portland, OR 97205
troy (g) rnp.orq
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FAX
David Hawk, Director
Energy Natural Resources
R. Simplot Company
999 Main Street
O. Box 27
Boise , ID 83702
dhawk
(g)
simplotcom
CERTIFICATE OF SERVICE , Page 2
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R. Scott Pasley
Assistant General Counsel
R. Simplot Company
999 Main Street
O. Box 27
Boise , ID 83702
spaslev
(g)
simplotcom
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William J. Batt
John R. Hammond , Jr.
Batt & Fisher, LLP
101 S. Capitol Blvd., Suite 500
O. Box 1308
Boise, ID 83701
wib
(g)
battfisher.com
irh (g) battfisher.com
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Michael Heckler
Director of Marketing & Development
Wind land Incorporated
7669 W. Riverside Drive, Suite 102
Boise, ID 83714
mheckler(g)windland.com
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LeRoy Jarolimek
605 S. 600 W.
Burley, ID 83318
leroviarolimek
(g)
hotmail.com
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Gerald Fleischman
11535 W. Hazeldale Ct
Boise, ID 83713
qfleisch986
(g)
hotmail.com
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~I~
BARTON L. KLINE
CERTIFICATE OF SERVICE , Page 3