20070209Reply comments.pdf

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IDAHO~POWER~
An IDACORP Company
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Lisa D. Nordstrom
Attorney
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February 9 2007
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P. O. Box 83720
Boise, Idaho 83720-0074
RE: Case No. IPC-06-
IN THE MATTER OF IDAHO POWER COMPANY'S 2006
INTEGRATED RESOURCE PLAN (IRP)
Dear Ms. Jewell:
Please find enclosed for filing an original and seven (7) copies of the Reply
Comments of Idaho Power Company in the above-referenced matter.
I would appreciate it if you would return a stamped copy of this transmittal letter in
the enclosed self-addressed , stamped envelope.
Sincerely,
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Lisa Nordst m
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Enclosures
O. Box 70 (83707)
1221 W. Idaho St.
Boise, ID 83702
LISA NORDSTROM ISB #5733
BARTON L. KLINE ISB #1526
Idaho Power Company
P. O. Box 70
Boise, Idaho 83707
Telephone: [phone]
FAX Telephone: [phone]
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2007 FES -9 Fl1 i;,
ID/dH) ,'lJfiliCUTILITIES COiV1i'AISSJO;,
Attorneys for Idaho Power Company
Street Address for Express Mail
1221 West Idaho Street
Boise , Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MA TIER OF IDAHO POWER
COMPANY'S 2006 INTEGRATED
RESOURCE PLAN (IRP)
) CASE NO. IPC-06-
) REPLY COMMENTS OF IDAHO
) POWER COMPANY
COMES NOW , Idaho Power Company ("Idaho Power" or "the Company ), by and
through its attorneys of record , and in response to comments filed by the Commission
Staff, Exergy, Industrial Customers of Idaho Power ("the ICIP"), NW Energy Coalition
Idaho Irrigation Pumpers Association and other interested parties, hereby submits the
following reply comments.
ICIP Comments: The Nature of the lAP Process
Idaho Power s 2006 IRP is a comprehensive analysis of the Company
projected loads and resources available to meet those loads over the next 20 years.
The integrated resource planning process is a continuous one, and a detailed plan is
filed with the Company s regulators every two years for public review. The resulting
document is the foundation for the Company s resource decisions.
REPLY COMMENTS OF IDAHO POWER COMPANY, Page 1
Each filing requires considerable modeling and analysis using assumptions
based on the best available information at a given point in time. To allow internal
stakeholder and regulatory review to occur, Idaho Power must lock down a number of
the inputs to the IRP , such as the load forecast and the expected energy and capacity
contributions available from existing and committed resources months before the plan is
completed and filed. This must occur regardless of whether a specific project (1) has
been selected in any pending Request for Proposal (RFP) process, (2) has received a
Certificate of Public Convenience and Necessity, or (3) is completed and in-service , so
that long-term resource planning can ultimately take place.
Although the ICIP implies in its Comments that Idaho Power does not revisit the
ongoing prudency of its resource decisions as contracts are signed and regulatory
approvals are received , that is simply not true. Idaho Power is mindful of industry,
market and regulatory changes that affect its system and continues to evaluate the
appropriateness of RFPs from the time they are released through construction.
However, IRPs are designed to build upon previous plans so as to shape future
resource decisions. Given current conditions, Idaho Power continues to believe that the
Evander Andrews natural gas-fired combustion turbine facility was the appropriate
choice for the peaking resource identified in the 2004 IRP.
ICIP Comments: Assumptions and Resources Not Included
in the 2006 IRP
The Company understands the ICIP's desire to have the most current load
forecast available at the time of filing used as the basis of Idaho Power s IRP. Because
load forecasts form the foundation for resource modeling, Idaho Power made every
attempt to use the most accurate load information available when it prepared the Sales
REPLY COMMENTS OF IDAHO POWER COMPANY, Page 2
and Load Forecast for the 2006 IRP. This forecast was completed on October 26
2005. Short of scrapping months of modeling, analysis, and Integrated Resource Plan
Advisory Council (IRPAC) feedback to incorporate the May 2006 Idaho Conservation
Reserve Enhancement Program (CREP) assumptions, it was not possible to timely
include any potential irrigation load reductions in the 2006 IRP filing. Furthermore
since CREP sign-up began on May 30, 2006 and runs until enrollment goals are met, or
December 31 , 2007, whichever comes first, the impacts of the CREP enrollment are
more appropriately addressed in the 2008 IRP.Idaho Power has incorporated
assumptions regarding CREP enrollment into its current load forecasts and those that
will be used in the 2008 IRP process commencing in June 2007.
The ICIP also expressed concern that Idaho Power has not evaluated potential
distributed generation opportunities for consideration in future resource decisions.
keeping with Commission Order No. 30201 issued December 15, 2006, Idaho Power is
presently investigating the potential of using customers' emergency generator resources
as a "virtual peaking plant". The Company has arranged for on-site demonstrations at
other utilities that have developed such programs and will present a proposal to the
Commission no later than June 1 , 2007. The results of these findings will be used in
Idaho Power s future resource decisions and will be incorporated into the 2008 IRP
process that begins in June 2007.
ICIP and Exergy Comments: Transmission Upgrades
As part of the 2006 IRP process, Idaho Power undertook a comprehensive
analysis of potential transmission upgrade projects that would benefit its system.
Because the Company determined it would be most cost-effective to complete two
REPLY COMMENTS OF IDAHO POWER COMPANY, Page 3
transmission upgrades to the Pacific Northwest, Exergy and the ICIP incorrectly
conclude that Idaho Power "exclusively focused" on the Pacific Northwest to the
exclusion of expansion to the south and east. The 2006 IRP considered several
transmission upgrades without a specific or dedicated generation resource at the end of
a transmission line.These alternatives included upgrades to Montana , Wyoming,
Nevada and the Pacific Northwest.Although the preferred portfolio included two
transmission upgrades to the Pacific Northwest , that does not mean there are no other
transmission upgrades in the preferred portfolio. In fact, the preferred portfolio includes
significant transmission upgrades to the east to integrate the following resources:
Wyoming Pulverized Coal (250 MW), Regional IGCC (250 MW assumed to be in
Wyoming) and the INL Nuclear Power Purchase Agreement (250 MW), which is
assumed to be served from the Next Generation Nuclear Plant anticipated to be built at
INL. However, if these supply-side resources are not developed , then it is unlikely
Idaho Power will proceed with the associated transmission upgrades.
The ICIP and Exergy comment that a number of generation resources miqht
developed in Wyoming and Montana in the future. While this may be true , Idaho Power
does not intend to build transmission to the east without a corresponding plan to
develop the associated supply-side resources , or evidence that surplus capacity exists
and is available to meet the Company s resource needs. However, because the Pacific
Northwest is a winter peaking region and Idaho Power s system is summer peaking, the
Company believes transmission projects to the Pacific Northwest are prudent choices
and sufficient resources will be available to meet Idaho Power s needs.
REPLY COMMENTS OF IDAHO POWER COMPANY, Page 4
IPUC Staff Comments: Average Annual Gas Prices
Idaho Power appreciates Staff's recognition of the Company s efforts to improve
its 2006 I RP by incorporating additional analyses and Commission recommendations.
Idaho Power agrees with many of Staff's concerns and suggestions, and offers the
following comments.
Staff expressed concern that Idaho Power s IRP appeared to utilize an annual
average gas price even though the majority of its gas is purchased for the summer
peaking months. In the 2006 IRP , future expected gas prices are presented on page 48
of Appendix D - Technical Appendix as annual averages for each of the years in the
planning horizon. However, in the analysis of each portfolio, the Aurora model utilizes
monthly average gas prices which have seasonalization factors applied. This is not
apparent due to the manner in which the data is presented in the Technical Appendix.
IPUC Staff Comments: Irrigation Peak Rewards Program
Another issue Staff raised was how the Irrigation Peak Rewards program was
factored into the 2006 IRP. In an Application filed one week before the 2006 IRP , Idaho
Power requested the Commission approve modifications to the 2 year-old Irrigation
Peak Rewards program to better manage load reduction targets and increase customer
satisfaction. The Irrigation Peak Rewards program was a resource already included in
the 2004 IRP for 30 MW, and the unmodified program is accounted for in the
load/demand estimates/assumptions used in the 2006 IRP. Idaho Power does not
expect the changes approved by the Idaho Commission on November 30, 2006 in
Order No. 30194 to significantly change the estimated savings from this existing
program. The changes are expected to increase savings in 2007 , but only by about 3.
REPLY COMMENTS OF IDAHO POWER COMPANY, Page 5
MW per day. Depending on how the peak reduction is distributed and the time period
used, the estimated program savings will still be very close to 30 MW.
CONCLUSION
Idaho Power views development of the IRP document as a valuable planning
activity that positively shapes its long-term development of energy resources. The
Company s integrated resource planning process will continue between filings of plan
documents, as Idaho Power strives to improve the process and the associated analysis.
The Company, as well as the next IRPAC , will consider and address many of the issues
that Staff and others have identified in their comments in its 2008 IRP.
In light of the 2006 IRP filing and the written record in this docket , Idaho
Power respectfully requests the Commission accept the filing of its 2006 IRP and find
that it meets both the procedural and substantive requirements of Order No. 22299.
DATED this 9th day of February, 2007.
l /7
LISA NORD TROM
Attorney for Idaho Power Company
REPLY COMMENTS OF IDAHO POWER COMPANY, Page 6
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 9th day of February, 2007, I served a true
and correct copy of the above and foregoing REPLY COMMENTS OF IDAHO POWER
COMPANY upon the following named parties by the method indicated below, and
addressed to the following:
Cecelia A. Gassner
Deputy Attorney General
Idaho Public Utilities Commission
472 W. Washington Street
O. Box 83720
Boise , ID 83720-0074
Ken Miller
Idaho Energy Advocate
NW Energy Coalition
5400 W. Franklin , Suite G
Boise, ID 83705
Lynn S. Tominaga
Executive Director
Idaho Irrigation Pumpers
Association
O. Box 2624
Boise , ID 83701-2624
Peter Richardson
Mark Thompson
Industrial Customers of Idaho
Power
515 N. 2ih Street
Boise, ID 83702
Peter Richardson
Mark Thompson
Exergy Development Group of
Idaho LLC
515 N. 2ih Street
Boise , ID 83702
CERTIFICATE OF SERVICE, Page 1
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