20060927notice_of_complaint_order_no_30135.pdf

Office of the Secretary
Service Date
September 27 2006
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASSIA GULCH WIND PARK, LLC AND
CASSIA WIND FARM, LLC,CASE NO. IPC-06-
CO MPLAIN ANTS,NOTICE OF COMPLAINT
(Regarding QF Responsibility for
Transmission Upgrade Costs)
IDAHO POWER COMPANY,NOTICE OF
COMMENT DEADLINES
RESPONDENT.
ORDER NO. 30135
YOU ARE HEREBY NOTIFIED that on September 13 , 2006, Cassia Gulch
Wind Park, LLC and Cassia Wind Farm, LLC (collectively Cassia or the Projects) filed a
complaint against Idaho Power Company (Idaho Power; Company) with the Idaho Public
Utilities Commission (Commission) requesting a Commission declaration and
determination that, as a matter of law and policy, the cost responsibility for transmission
system upgrades to meet N-1 contingency planning conditions should not be assigned to
PURP A qualifying facilities (QFs) connecting to the system, but rather, should be rolled
into the utility s plant-in-service rate base and recovered from rates and charges for utility
service of native load and other transmission customers. Cassia s filing in this case
accompanied by supporting memorandum and affidavit.
Cassia Gulch Wind Park, LLC and Cassia Wind Farm, LLC are QFs within the
meaning of the Public Utility Regulatory Policies Act of 1978 (PURP A). Each of the
Projects has signed Commission approved Firm Energy Sales Agreements with Idaho
Power. Reference Case No. IPC-06-, Order No. 30086; Case No. IPC-06-, Order
No. 30086. The Projects will sell their entire output to Idaho Power.
As reflected in the Cassia filing, this complaint involves a dispute concerning the
terms and conditions of interconnection by QFs to Idaho Power s high voltage transmission
system. While the Federal Energy Regulatory Commission (FERC) has jurisdiction with
respect to interconnection for non-QF generators, state commissions, including the Idaho
Commission, have jurisdiction with respect to interconnection terms for PURP A qualifying
NOTICE OF COMPLAINT
NOTICE OF COMMENT DEADLINES
ORDER NO. 30135
facilities when the facilities sell their entire output to a regulated utility. Citing FERC
Docket No. RM02- 12-000, Order No. 2006 Standardization of Small Generator
Interconnection Agreements and Procedures, May 12, 2005 , , 517 ("States continue to
exercise authority over QF interconnections when the owner of the QF sells the output of
the QF only to the interconnected utility or to on-site customers
BACKGROUND
As reflected in the complaint, as part of its integrated backbone electric
transmission system, Idaho Power owns and operates a 138 kV transmission system in the
Twin Falls, Idaho area. Idaho Power has received requests for the integration of up to 200
MW of new generation to be connected to the 138 kV system. Under normal operating
conditions (") the existing Idaho Power transmission has capacity sufficient to absorb
the potential new generation in the Twin Falls area. It, however, is common utility practice
to model or evaluate the operation of backbone transmission assuming that one line of a
system is out of service ("1 contingency Idaho Power believes that under N-
contingency conditions the addition of 200 MW of generation at the Twin Falls 138 kV
system could create thermal overloads within its integrated system. To prevent the possible
occurrence of thermal overloads under N-1 contingency conditions Idaho Power proposes
to construct a series of transmission system upgrades in four phases. The estimated total
cost of the transmission system upgrade is approximately $60 million. With the exception
of a relatively small portion of the system upgrade costs to be borne by Idaho Power, the
Company claims and asserts that the $60 million cost of its transmission system upgrades
should be borne, in the first instance, by the QFs proposing to connect to the Idaho Power
transmission system. The magnitude of these additional transmission system upgrade
costs, Cassia contends, is such that, if assigned to Cassia, the economic viability of the
Projects would be seriously compromised.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filings
of record in Case No. IPC-06-21. The Commission as part of its September 25, 2006
Decision Meeting also provided legal counsel for Idaho Power and Cassia an opportunity to
present their procedural recommendations. The Commission finds that the issue as to
NOTICE OF COMPLAINT
NOTICE OF COMMENT DEADLINES
ORDER NO. 30135
whether transmission system upgrade costs required to meet N-1 contingency planning
conditions can and should be allocated to QFs requesting interconnection is a policy issue
with generic implications for the state s major electric utilities, i.e., Idaho Power Company,
PacifiCorp dba Rocky Mountain Power and Avista Corporation dba Avista Utilities. The
issue is also one that affects PURP A qualifying facilities. We find the question presented
has significant ramifications for the future development of QF projects in areas where
transmission upgrade is required. An adequate record before the Commission must be
developed. Cassia recommends that the matter be processed pursuant to Modified
Procedure, i., by written submission rather than by hearing. It remains to be seen
whether an adequate record to resolve the policy question presented can be developed in a
paper case. The Commission is willing to consider this matter without a hearing unless it
subsequently appears that the public interest requires a different procedure and method of
record development. We accordingly find it reasonable at this time in Case No. IPC-06-
21 to establish a procedural schedule under Commission Rules for Modified Procedure
by written submission rather than by hearing. Reference Commission Rules of Procedure
IDAPA 31.01.01.201-204.
The deadline for filing written comments or protests with respect to the
responsibility of PURP A QFs to share in electric transmission system
upgrade costs necessitated (in part) by QF requests for interconnection
and the use of Modified Procedure in Case No. IPC-06-21 is Friday,
October 27, 2006. The deadline for filing reply comments is Thursday,
November 9, 2006.
Comments filed by Idaho Power, Rocky Mountain Power, Avista and Commission Staff
should include a statement of argument and memorandum of legal authorities. The
Commission Secretary is directed to provide a copy of this Notice to Rocky Mountain
Power and Avista Utilities and electronic copies to affected QFs in the Magic Valley where
transmission upgrade is proposed.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the deadline, the Commission may consider the matter on its merits and
may enter its Order without a formal hearing. If comments or protests are filed within the
deadline, the Commission will consider them and in its discretion may establish further
NOTICE OF COMPLAINT
NOTICE OF COMMENT DEADLINES
ORDER NO. 30135
procedure, may set the matter for hearing or may decide the matter and issue its Order
based on the written positions before it. Reference IDAPA 31.01.01.204.
YOU ARE FURTHER NOTIFIED that written comments concerning Case
No. IPC-06-21 should be mailed to the Commission, Idaho Power and Cassia at the
addresses reflected below.
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
For Idaho Power:
Street Address for Express Mail:
Barton L. Kline
Lisa Nordstrom
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E-mail: bkline~idahopower.com
lnordstrom~idahopower .com
472 W. Washington Street
Boise, ID 83702-5983
David Sikes
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E-mail: dsikes~idahopower.com
For Cassia:
Dean J. Miller
McDevitt & Miller, LLP
420 W. Bannock Street
PO Box 2564 (83701)
Boise, ID 83702
E-mail: ioe~mcdevitt-miller.com
Ronald K. Arrington
Associate Chief Counsel
John Deere Credit
6400 NW 86th Street
Johnston, IA 50131
E-mail:
arringto nro nal dk~ i 0 hndeere. com
Comments should also be provided to A vista and Rocky Mountain Power at the following
addresses:
NOTICE OF COMPLAINT
NOTICE OF COMMENT DEADLINES
ORDER NO. 30135
For Avista:For Rocky Mountain Power:
David 1. Meyer
Vice President, Chief Counsel for Regulatory
and Governmental Affairs
A vista Corporation
PO Box 3727
1411 E. Mission Avenue
Spokane, W A 99220-3727
E-mail: dmeyer~avistacorp.com
Brian Dickman
Dean Brockbank
PacifiCorp
201 S. Main, Suite 2300
Salt Lake City, UT 84111
E-mail: brian.dickman~pacificorp.com
dean. brockbank~pacificorp.com
All comments should contain the case caption and case number shown on the first page of this
document. Service dates are "in-hand" dates, with service to be accomplished by personal
delivery or electronic mail. Persons desiring to submit comments via e-mail may do so by
accessing the Commission s home page located at www.puc.idaho.gov Click the "Comments
and Questions" icon, and complete the comment form, using the case number as it appears on the
front of this document. These comments must also be sent to the parties at the e-mail addresses
listed above.
YOU ARE FURTHER NOTIFIED that the Complaint in Case No. IPC-06-
together with supporting memorandum and affidavit may be viewed at www.puc.idaho.gov
clicking on "File Room" and "Electric Cases " or can be viewed during regular business hours at
the Idaho Public Utilities Commission, 472 W. Washington Street, Boise, Idaho.
NOTICE OF COMPLAINT
NOTICE OF COMMENT DEADLINES
ORDER NO. 30135
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ;l. 7,.1.
day of September 2006.
ATTEST:
/ -,
~ D. Jewell J
Commission Secretary
bls/O:IPC-O6-21 sw
NOTICE OF COMPLAINT
NOTICE OF COMMENT DEADLINES
ORDER NO. 30135
PAUL KJEL . ~~NDER, PRESIDENT
MARSHA H. SMITH, COMMISSIONER