20050627Ikemoto letter.pdf

Jun 27 05 01: 32p Enerc~ Vi 5 i on 916 7912250
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VISION LLC EnVisioning sustainable future
672 Blair Avenue
Piedmont. CA, USA 9461 i
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glenni~pacbell.net :EGlenn S. Ikemoto
Principal
June 27 2005
President Paul Kjel1ander
Commissioner Dennis S. Hansen
Commissioner Marsha H. Smith
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Idaho Public Utilities Commission
O. Box 83720
Boise, ID 83720-0074
Subject: Petition for ~1.,-sDension of W.lnd Enerav Conjracts
Dear Com miss ioners:
Having participated in the proceedings that resulted in the new PURPA contracts , we are
alarmed to find that Idaho Power is already trying to scuttle the results of extensive public
hearings and debate after only six months and a meager 27 MWa of signed contracts.
We were one of the parties that requested reconsideration of some parts of the
Commission decision. That request was denied. Idaho Power s new petition is
effectively the same as asking for reconsideration again. If a new hearing were granted,
Idaho Power win be successful in circumventing the regulatory process. A dangerous
precedent will be established, allowing a utilitts position to take priority over all other
parties by simply filing a new petition after a decision is made.
The Commission needs to take immediate action because a de facto moratorium now
exists as a result of Idaho Power s petition. Like many developers. we have spent a great
deal of time and money developing wind projects in Idaho relying on your original
decision. We are currently raising additional third.party development and project equity
funds necessary to complete our projects. This financing activity will stop until the
investment community has confidence in the Commission s support for its past decision.
Our hope is that you quickly reject Idaho Power s petition to preserve the credibility of the
regulatory process. Additional hearings are unnecessary because utiiities are always free
to analyze system integration issues.
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Jun 27 05 01: 33p Ener,~ Vi 5 i on 916 7912250
Certainly the Commission has an overriding responsibility to protect the ratepayers.
However, the intermittent nature of wind has already been adequately addressed. The
90/110 performance band and seasonality factors already over-compensate the
purchasing utilities for the variabi1ity of the resource. In fadl faced with transmission costs
and the performance band requirement. it is doubtful that unsuccessful bidders will
reconfigure their projects to qualify for the PURPA mandatory purchase obligation" as
stated in the petition. Also, Idaho Power states that 1 000 MW of wind will need 640 MW
of gas turbines as backup. Clearly, this says wind energy still beats the surrogate
resource. No one in the prior proceedings ever thought that wind was 1000/0 firm and the
contract is specifically designed for that.
Emergency action is not necessary. This is not a case where the price of natural gas has
nose dived and the Commission needs to take immediate action to avoid overpriced
contracts. On the contrary I the current contract is a bargain in view of present gas market
conditions. Yes, there is a limit but we are far from it. So far, only one developer appears
willing to deal with the risks and costs of the performance band issue. There is ample
time to study the resource integration issues without devastating the wind industry with a
needless moratorium.
Wind is now the major indigenous energy resource in Idaho. It is both the cleanest and
cheapest option, even with gas turbine backup. We fully support any efforts to understand
the wind resource better and integrate as much of it into the generation mix as possible.
If you choose to authorize new hearings, the wind contracts should not be suspended
during this time. The worst result is the construction of wind projects, which will be far
cheaper and cleaner than the fossil-fueled generation that the utility originally planned. If
you feel some limitation on contracts is necessary. it is important to note that the issues
Idaho Power is raising deal with the penetration level appropriate for wind. These issues
don t apply to Avista (because of its lack of in-state wind resource) or Pacificorp (because
of its size). Neither of these utilities has signed any OF wind contracts nor has solicited
wind projects through Requests for Proposals. If a suspension is granted to Idaho Power
it shouldn t be applied to the other utilities, especially since they have not petitioned for
such action. You may also wish to limit the availability of PURPA contracts to projects
within the state. This is a normal requirement and reserves the economic benefits for
Idaho farmers, ranchers and counties.
~espectfully,
Glenn Ikemoto
Principal
cc: Rick Sterling
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