20061103Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
FROM:DONOVAN E. WALKER
DATE:NOVEMBER 3, 2006
SUBJECT:IDAHO POWER'S APPLICATION TO INSTITUTE A UNIFORM
SCHEDULE 72 INTERCONNECTION AGREEMENT - CASE NO. IPC-
06-
On September 1 , 2006, Idaho Power Company filed an Application seeking authority
to revise its Schedule 72 to include a Uniform Interconnection Agreement and to make the
associated tariff language changes. On October 5, 2006, the Commission issued a Notice of
Application and authorized the use of Modified Procedure with a deadline of October 31 , 2006
for written comments and/or protests. The only comments filed were those of Commission Staff.
Staff recommends approval of the Company s Application as more fully set forth below.
THE APPLICATION
The Company is proposing to implement separate Uniform Interconnection
Agreement to improve its internal processes and ensure the functional separation between power
supply and delivery mandated by the Federal Energy Regulatory Commission (FERC). The
Company states that when non-utility projects, such as PURP A qualified facilities (QFs), request
interconnection to Idaho Power s distribution/transmission system the current practice is to
address those issues in the power purchase agreement document and in conjunction with
Schedule 72 (Interconnections to Non-Utility Generation). However, because interconnection is
managed by Idaho Power s Power Delivery (Transmission) business unit, while power purchase
agreements are within the purview of Idaho Power s Power Supply (Marketing) business unit
and the FERC now requires a functional separation between the activities of these two business
units, it is no longer possible for the marketing business unit to negotiate interconnection terms
and conditions as part of the power purchase agreement.
DECISION MEMORANDUM
Idaho Power s proposed Uniform Interconnection Agreement addresses the terms
and conditions of interconnection and integration to the Company s transmission/distribution
system, incorporates portions of the Company s template power purchase agreement, and is
patterned after FERC's standard Small Generator Interconnection Agreement. The Company
states that the Uniform Agreement is in keeping with utility industry efforts to standardize
interconnection procedures and facilitate investment in needed utility infrastructures.The
proposed Uniform Interconnection Agreement is included as Attachment 1 to the Company
proposed tariff.
Idaho Power states that it is not proposing any major changes to the terms and
conditions of Schedule 72 other than referencing the Uniform Interconnection Agreement and
adding language explicitly adopting the Institute of Electric and Electronic Engineers: IEEE
Standard 1547 (IEEE 1547) for interconnection. The Company states that it has adopted IEEE
1547 internally and believes non-utility generation interconnection should adhere to these
industry best practices as well.
ST AFF COMMENTS
Staff reviewed the Company s Application as well as Schedule 72 and some related
Commission cases. Staff stated that is has no objection to Idaho Power instituting a Uniform
Interconnection Agreement as part of its Schedule 72 tariff, Interconnections to Non-Utility
Generation. However, Staff recommended that language be added to Schedule 72 to clarify that
generation facilities that qualify for Schedule 84 will not be required to sign a Uniform
Interconnection Agreement. Staff also recommended approval of the Company s request to
adopt IEEE 1547 as a standard for interconnections for all net metering facilities and for PURP
projects with a nameplate rating less than 1 MW.
Staff reported that Idaho Power s Schedule 72 Uniform Interconnection Agreement
addresses the terms and conditions of interconnection and integration to the Company
transmission/distribution system. Idaho Power reviewed the NARUC Model Interconnection
Procedures Agreement, as well as FERC's Large and Small Generator Interconnection
Agreement. (LGIA and SGIA, respectively). The Company also included several contract
provisions that have been accepted by the Commission in dozens of firm energy sales
agreements over the years, including provisions relating to termination, disconnection
emergencies, maintenance, land rights, liability, force majeure, default, and insurance.
DECISION MEMORANDUM
Staff recognized the functional separation requirements of FERC and that it may be
advantageous for the Company to have separate agreements for power purchase and for
interconnection. Staff does not believe that requiring two separate agreements will make it any
more burdensome for non-utility generators to develop projects.
Staff reviewed the proposed Uniform Interconnection Agreement and believes that
the terms and conditions contained in it are reasonable. However, Staff recommended that
additional language be added to Schedule 72 to clarify that generation facilities that qualify for
Schedule 84 (Customer Energy Production Net Metering) will not be required to sign a Uniform
Interconnection Agreement. Specifically, Staff recommended that the A V AILABILITY
paragraph of Schedule 72 be modified to add the following language:
Service under this schedule is available throughout the Company s service
area within the State of Idaho to Sellers owning or operating Qualifying
Facilities that sign a Uniform Interconnection Agreement or Generation
Facilities that qualify for Schedule 84. Generation Facilities that qualify for
Schedule 84 are not required to sign a Uniform Interconnection Agreement.
Idaho Power has indicated to Staff that it has no objection to adding the above recommended
language.
Staff supports Idaho Power s request to explicitly adopt IEEE Standard 1547 for all
net metering facilities and for PURP A projects with a nameplate rating less than 1 MW. The
Company informed Staff that it did not include IEEE 1547 as an explicit requirement for projects
larger than 1 MW because it is merely one technical standard among many for those projects.
Idaho Power stated that it decided not to incorporate IEEE 1547 by reference so that if it changes
over time or if some portion of it is not appropriate for a particular application, a built-in conflict
is not created. Staff noted that Idaho Power had indicated in a separate case now before the
Commission concerning the consideration of the five new ratemaking standards in the Energy
Policy Act of 2005 , Case No. GNR-06-, that it would seek to explicitly include IEEE 1547
in its Schedule 72.
DECISION MEMORANDUM
COMMISSION DECISION
Does the Commission wish to approve the Company s Application seeking: to
institute a Uniform Interconnection Agreement; to adopt IEEE 1547; and to adopt the tariff
language changes proposed by the Company and Staff?
DECISION MEMORANDUM