20070601Virtual Peaking Program status report.pdf

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An IDACORP Company
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June 1 , 2007
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Ms. Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P. O. Box 83720
Boise, ID 83720-0074
RE:Virtual Peaker Program
Case No. IPC-06-
Dear Ms. Jewell:
Enclosed please find eight copies of Idaho Power s Virtual Peaking Program status report. This
report is filed in compliance with the Idaho Public Utilities Commission Order No. 30201.
The Company previewed the information included in this report with Commission Staff and the
Industrial Customers of Idaho Power on May 15 , 2007. As stated in this report, the Company will
submit a detailed report of its findings to the Commission after the completion of its "Engineering
Analysis Pilot Program" and updated financial analysis.
If you have any questions regarding this filing, please do not hesitate to contact me.
I!Iflu8
Courtney Wa\Js
Pricing Analyst
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cc:Ric Gale
Maggie Brilz
Pricing & Regulatory Services
Voice: 208-388-5612
Fax: [phone]
cwaite s(illidah opo wer. com
O. Box 70 (B3707)
1221 W. Idaho St.
Boise, ID 83702
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IDAHOa..;!! POWER
An IDACORP Company
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VIRTUAL PEAKER PROGRAM
Backaround
Over the past ten years , Idaho Power has periodically investigated the possibility of
implementing a distributed generation program as an alternative resource to help meet
peak demands. In the fall of 2006 , the Company once again began investigating the
potential for a program. Shortly after, the Industrial Customers of Idaho Power and the
Idaho Public Utilities Commission (IPUC) expressed an increased interest in this type of
program and on December 15 , 2006, the IPUC issued Order No. 30201 , which directed
Idaho Power to "investigate and submit a report for the implementation of a 'virtual
peaking plant' program based upon the use of existing emergency generator resources
in the Company s service territory." This report is filed in compliance with Order No.
30201.
As part of our research , the Company reviewed virtual peaking programs other utilities
have successfully operated and focused on two designs: The Dispatchable Standby
Generation program conducted by Portland General Electric Company (PGE) and
Madison Gas and Electric s (MGE) Backup Generation Service. The primary difference
between the two programs is in regards to the ownership of the generator: MGE owns
the generator located on the customer s premises whereas PGE's customers own their
generator. Also MGE customers pay a monthly service charge based on their
maximum annual kilowatt demand for electricity. Idaho Power chose PGE's program
model to use as a basis for our program development.
Proaram Description
dispatchable standby generation program would allow the Company to use
nonresidential customers' standby generators for up to 400 hours a year to meet system
peak power demands. Customers' generators would operate in parallel with Idaho
Power s system while also being available to back up their facility when needed. The
Company s design will be such that during an outage situation , the customer
generator(s) will automatically start and provide backup power to the customer for as
long as needed as originally intended by the customer. During times when customers
generators can be beneficial to the Company s system , the generators will be started
remotely by the Company s dispatch center.
The following are the responsibilities of the customer and the Company under the
proposed program design:
Customer Responsibilities: Customers will be responsible for purchasing
the generator(s) and providing the site for generator installation. In
addition , customers will grant the Company access to their generation
such that the Company can control operation of the generator(s) remotely
in parallel with the Company s distribution system from the Company
dispatch center for up to 400 hours per year. Customers may operate the
generator(s) at their sites as needed for emergency back-up power.
Company Responsibilities: The Company will conduct an analysis of the
customer s generator project and develop a comprehensive cost estimate.The Company will be responsible for providing interconnection
engineering, facilities, and installation and any other equipment necessary
for participation in the program. The Company will pay for and own all
communications and metering equipment.
In addition , the Company will be responsible for routine maintenance of the generator(s)
including overhauls over the term of the service agreement. The Company will also pay
for all fuel used to operate the customer s generator(s) throughout the term of the
service agreement. The Company will perform monthly full-load testing of the
customer s generator(s) and control system and testing of the Company s dispatch
control and interconnection facilities. All energy consumed by the customer while
participating in the program will be billed at standard tariff rates.
The following is a partial listing of the infrastructure that would need to be in place for
such a program to run:
Utility Paralleling Power System (UPPS) - The UPPS will ensure that
the customer is provided with a continuous supply of electric power by,
almost instantaneously, switching from the Company s power supply to
the back-up generator s power supply in the event of a power failure.
Metering - For an existing generator to be retrofitted , an additional
time-based meter would be required. New generators would require two
time-based meters be installed. The time-based meters would ensure that
whether customers are drawing energy from the Company s system or
from the back-up generator, their usage is tracked and billed under the
standard service schedule.
Communication Node Network For communication between the
customer s system and the Company s system , a frame relay based
network would be installed in order to provide a secure network.
Energy Management System (EMS) - The EMS would need to be
programmed to accept the data from the UPPS.
Feasibility Analysis
In our feasibility analysis , the Company looked at the various costs involved in the
interconnection of a back-up generator as well as the resulting operations and
maintenance costs which will be covered by the Company. Both initial generator
installations and existing retrofits were considered. The initial analysis indicated there is
enough potential benefit associated with the program to continue pursuing its
investigation.
Pilot Proaram
The feasibility analysis concluded that Idaho Power would need to make an investment
in infrastructure of approximately $1 million in order to integrate customer-owned
generators into our system. Because of the investment size and the potential
complexity of the interconnection of some generators , the Company determined it was
necessary to do an in-depth analysis of the interconnection costs, targeting generators
of different sizes, ages, and locations. This thorough analysis would provide more
detailed costs of interconnection and a more accurate determination of the program
potential viability.
In order to complete the in-depth cost analysis , Idaho Power met with numerous
customers, as well as representatives of the Industrial Customers of Idaho Power, to
describe the potential program and solicit participation in an "Engineering Analysis Pilot
Program . Through this process, Idaho Power hopes to identify four to six customers
who are willing to work with Company personnel in the development of this initial cost
estimate for their specific facilities. The Company is targeting customers whose existing
generators vary in size and customers who do not currently have back-up generators
but would consider installing one if a "virtual peaker" program were offered.
The Company plans to conduct the interconnection cost estimate analyses over the
next three months. Once detailed interconnection cost information is available , the
Company will update its financial analysis to determine if a "virtual peaker" program is
economically viable and submit a detailed report of its finding to the Commission.