20061117notice_of_oral_argument.pdf

Office of the Secretary
Service Date
November 17, 2006
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASSIA GULCH WIND PARK, LLC AND
CASSIA WIND FARM, LLC,CASE NO. IPC-O6-
COMPLAINANTS,
NOTICE OF
ORAL ARGUMENT
IDAHO POWER COMPANY
RESPONDENT.
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-l contingency planning conditions
should not be assigned to PURPA 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 is
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 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
NOTICE OF ORAL ARGUMENT
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 ("I contingency
Idaho Power believes that under N-l 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-l 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.
On September 27, 2006, the Commission in Case No. IPC-06-21 issued a Notice
of Complaint (Regarding QF Responsibility for Transmission Upgrade Costs) and established a
schedule for written comments. In its Notice and Order No. 30135 , the Commission stated
The Commission finds that the issue as to whether transmission system
upgrade costs required to meet N-l 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., Idaho Power
Company, PacifiCorp dba Rocky Mountain Power and Avista Corporation
dba A vista 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.
NOTICE OF ORAL ARGUMENT
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.
Comments in Case No. IPC-06-21 were filed by Idaho Power, Rocky Mountain
Power, Avista, Cassia, Exergy Development Group of Idaho, LLC, Commission Staff and other
interested parties.
YOU ARE HEREBY NOTIFIED that the Commission has reviewed the filed
comments and Cassia s request for oral argument. The Commission finds it reasonable to grant
oral argument on the threshold issue presented for Commission determination by Cassia, i.
whether a QF selling generation to a utility has a responsibility to pay the transmission upgrade
costs that result from and that would not be incurred but for the QF's request for interconnection.
Accordingly, the Commission will conduct a hearing for oral argument in this matter on
TUESDAY. NOVEMBER 28. 2006 COMMENCING AT 9:30 A.M. AT THE
COMMISSION'S HEARING ROOM. 472 WEST WASHINGTON STREET. BOISE.
IDAHO.
YOU ARE FURTHER NOTIFIED that all hearings and prehearing conferences in
this matter will be held in facilities meeting the accessibility requirements of the Americans with
Disabilities Act (ADA). Persons needing the help of a sign language interpreter or other
assistance in order to participate in or to understand testimony and argument at a public hearing
may ask the Commission to provide a sign language interpreter or other assistance at the hearing.
The request for assistance must be received at least five (5) working days before the hearing by
contacting the Commission Secretary at:
NOTICE OF ORAL ARGUMENT
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone] (Telephone)
[phone] (FAX)
Mail: secretary~puc.idaho. gov
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission s jurisdiction under Title 61 of the Idaho Code and the Public Utility
Regulatory Policies Act of 1978 and that the Commission may enter any final Order consistent
with its authority.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 11
day of November 2006.
Out of the Office on this Date
PAUL KJELLANDER, PRESIDENT
MARSHA H. SMITH, COMMISSIONER
ATTEST:
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L(\.
D. Jewell
Commission Secretary
bls/N:IPC-O6-21 sw
NOTICE OF ORAL ARGUMENT