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Home My WebLink About20070313Answer to Exergy motion to close docket.pdf~ ~\;oo ~OUNTAIN n. :::- C E 201 South Main, Suite 2300 Salt lake City, Utah 84111 March 13 , 2007 2GG7 r~: :~ I 3 I~ij 9: 03 VIA OVERNIGHT DELIVERY i!)':'HU iiLliiES ~; LiC 11 S 3: (j Idaho Public Utilities Commission 472 West Washington Boise, ill 83702-5983 Attention:Jean D. Jewell Commission Secretary Re:Answer of Rocky Mountain Power in Case No. IPC-05- Rocky Mountain Power, a division ofPacifiCorp, hereby submits for filing an original and seven (7) copies of its Answer of Rocky Mountain Power in opposition to Exergy Development Group of Idaho Motion for Order to Close this Docket and Reinstate the 10MW Threshold for PacifiCorp and Avista in Case No. IPC-05-22. Service of pleadings, exhibits, orders and other documents relating to this proceeding should be served on the following: Dean Brockbank Senior Attorney Rocky Mountain Power One Utah Center, Suite 2200 201 South Main Salt Lake City, UT 84111 dean. brockbank~pac ificorp .com Brian Dickman Manager, Idaho Regulatory Affairs Rocky Mountain Power One Utah Center, Suite 2300 201 South Main Salt Lake City, UT 84111 brian. di c kman~pac ifi corp. com It is respectfully requested that all formal correspondence and Staff requests regarding this material be addressed to: Bye-mail (preferred):datareq uest~pac ificorp. com By regular mail:Data Request Response Center PacifiCorp 825 NE Multnomah, Suite 2000 Portland, Oregon, 97232 By fax:(503) 813-6060 Sincerely,~oki~ P -Jeffrey K. Larsen Vice President, Regulation Enclosures cc: Service List Dean Brockbank PacifiCorp 201 South Main Street, Suite 2300 Salt Lake City, Utah 84111 Telephone: (801) 220-4568 FAX: (801) 220-3299 Dean.Brockbank (g) PacifiCorp.com Attorney for Rocky Mountain Power :' C:: i '/iJ!t1.')J' j ' ~1.i'.J II \:, I -..I H, ... i'f il:'(: i Ui.:i!.,UTiLllil.:S CCi,it'1JSSIO! BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE PETITION OF IDAHO POWER COMPANY FOR AN ORDER TEMPORARILY SUSPENDING IDAHO POWER'S PURP A OBLIGATION TO ENTER INTO CONTRACTS TO PURCHASE ENERGY GENERA TED BY WIND-POWERED SMALL POWER PRODUCTION FACILITIES CASE NO. IPC-05- ANSWER OF ROCKY MOUNTAIN POWER IN OPPOSITION TO EXERGY DEVELOPMENT GROUP OF IDAHO'S MOTION FOR ORDER TO CLOSE TmS DOCKET AND REINSTATE THE 10 MW THRESHOLD FOR PACIFICORP AND AVISTA COMES NOW PacifiCorp, d.a. in Idaho as Rocky Mountain Power ("Rocky Mountain Power" or the "Company ), by and through its attorneys of record, and hereby submits this Answer in Opposition to Exergy Development Group of Idaho s Motion for Order to Close this Docket and Reinstate the 10 MW Threshold for PacifiCorp and A vista. In support of this Answer in Opposition, Rocky Mountain Power states as follows: BACKGROUND The Idaho Public Utilities Commission ("Commission ) found "reason to believe that wind generation presents operational integration costs to a utility different from other PURP qualified resources." Order No. 29839 at 8. The Commission further found "that the unique supply characteristics of wind generation and the related integration costs provide a basis for adjustment to the published avoided cost rates. . .." Id. Finally, the Commission found that it ANSWER OF ROCKY MOUNTAIN POWER would determine "the appropriate amount of adjustment" in "further proceedings." Id. The utilities, having followed the Commission s directives, have now arrived at the point of beginning those "further proceedings. TI.DISCUSSION In its Motion, Exergy correctly stated that the Commission found that for administrative reasons, "it is prudent and expedient to examine (the wind integration) question for all jurisdictional utilities at the same time " finding PacifiCorp s and Avista s "request to be reasonable and justified." Exergy s Motion at 3, citing Order No. 29839 at 10. Next, Exergy cited the Commission s instructions to PacifiCorp and Avista, directing them "to participate in further proceedings before this Commission in this docket." Id. The Commission also directed Idaho Power in conjunction with the other two utilities and in consultation with other parties to this case. . . to file a proposed schedule for an initial workshop to identify issues, required studies, and discovery parameters. Also to be filed is a proposal for further procedure and related time lines. Subsequent status reports shall be filed every 60 days thereafter." Id. Rocky Mountain Power has done precisely what the Commission ordered by fully and actively participating in all of the proceedings and workshops that Idaho Power conducted, as well as the settlement conference in January 2006. The workshops were placed on hold so that Idaho Power and A vista could perform wind integration studies for their respective utilities, and once those studies were complete, proceedings would re-commence. Idaho Power recently filed the results of its wind integration study (in Case No. IPC-07-'03) to re-commence the discussions and proceedings relating to wind integration costs. In filing its request for an integration cost adjustment, Idaho Power is following the Commission s order to study the issue and bring back a recommendation of how future ANSWER OF ROCKY MOUNTAIN POWER proceedings should move forward. Rocky Mountain Power believed that, once Idaho Power and A vista had completed their integration cost studies, either through informal workshops or otherwise, more formal Commission proceedings would re-commence in Case No. IPC-05- to continue the determination of what integration cost adjustments should be made, if any, to the respective utilities' published avoided cost rates. As Idaho Power has scheduled a workshop to discuss the results of its wind integration study for March 15, 2007, Rocky Mountain Power assumed that the proceedings under this docket, or in related dockets would resume once again. Rocky Mountain Power fully intends to participate in those future proceedings. Because Idaho Power has filed its request for a wind integration cost adjustment in a separate docket and not in Case No. IPC-05-, Rocky Mountain Power will similarly file in the next couple of weeks, in a new docket, a request for an adjustment to its published avoided cost rates to account for the costs associated with integrating new wind generation onto the PacifiCorp system. The Commission found that it would determine "the appropriate amount of adjustment" in "further proceedings" after the parties have sufficiently studied the issue. Order No. 29839 at 8. The parties, having followed the Commission s directives, have now arrived at the point of beginning those "further proceedings. Exergy, somewhat disingenuously, now states in its Motion that Rocky Mountain Power has "ignored or at a minimum abandoned" the Commission s directives in these proceedings and has somehow foregone its right to participate further. Exergy Motion at 4. Further, Exergy stated that Rocky Mountain Power has not filed one of the required 60-day progress reports. However, Exergy ignores the fact that the Commission ordered Idaho Power to file the reports in conjunction with the other two utilities and in consultation with other parties." Order No. 29839 at 10. ANSWER OF ROCKY MOUNTAIN POWER Rocky Mountain Power expects that soon after it files its request for an integration cost adjustment to its published avoided costs, the Commission will simultaneously examine the question of "all jurisdictional utilities at the same time," whether through a consolidation of cases for Idaho Power, Avista and Rocky Mountain Power, or by addressing the utilities separately, the Commission will examine the question at the same time. Finally, in suggesting that the 100 kW threshold should once again be lifted to 10 MW, Exergy has unfairly suggested that Rocky Mountain Power had "succeeded in shutting down the wind PURPA in (its) service territory(y) since August of 2005." Exergy Motion at 5. Exergy is misguided in its assertion on a number of fronts. First, the Commission, not the utilities, ordered that qualifying facilities for wind generation would only get published avoided cost prices for projects 100 kW or less. Second, the Commission approved a 20 MW power purchase agreement between PacifiCorp and Schwendiman Wind LLC (a qualifying facility) on March 31, 2006. See Order No. 30000. Third, the Commission s suspension order did not altogether suspend the utilities' PURPA purchase obligations as Idaho Power originally requested and as Exergy intimates. Rather, the suspension merely reduced the level at which wind qualifying facilities would qualify for published avoided cost rates from 10 MW to 100 kW. Qualifying facilities are still free to pursue power purchase agreements at project -specific avoided cost prices. Since August 2005, besides the Schwendiman Wind project, Rocky Mountain Power has received only one informal request for avoided cost pricing from a wind qualifying facility in Idaho on March 5, 2007. Curiously, however, on approximately the same day that Exergy filed its Motion, it sent I The referenced letters were undated, but were received by Rocky Mountain Power on February 28,2007. ANSWER OF ROCKY MOUNTAIN POWER to Rocky Mountain Power four notices of self certification on behalf of four Exergy affiliates, totaling 70 MW of new wind qualifying facility generation. The entire text of the four respective letters stated "Enclosed you will find a copy of the notice of self certification on behalf of (an Exergyaffiliate). Please call me if you have any questions." The letters were signed by one 1. Lars Doff. Confused by the letters, and taking him up on his offer, counsel for Rocky Mountain Power called Mr. Doff on March 6, 2007 to inquire what the letters were for and what Exergy intended Rocky Mountain Power to do with the letters and the notices of self certification. When asked what Exergy intended Rocky Mountain Power to do with the notices, Mr. Doff stated, I'm not entirely sure. I was just told to send them." Mr. Doff committed to call counsel for Rocky Mountain Power back with the purpose of the letters. As of the date of this filing, Rocky Mountain Power has not heard from Mr. Doff. It would appear that Exergy is positioning its four qualifying facility projects to either sell their output to Idaho Power or Rocky Mountain Power, depending on how the integration cost adjustment proceedings are resolved. In PacifiCorp s original Petition to Intervene in this docket, it expressed concern that by only suspending the purchase obligation for Idaho Power qualifying facilities would then forum shop, seeking to sell their wind generation output to those utilities that were still required to sell at the generally-higher, published avoided cost prices. Petition to Intervene, page 2, paragraph 4. Similarly, if the Commission were to grant Exergy s request and raise the 100 kW threshold back up to 10 MW for PacifiCorp, without similarly raising the threshold for the other utilities, the same result would likely occur: qualifying facilities would attempt to sell their output to the utilities that have the highest avoided cost rates, net of any wind integration cost adjustment. ANSWER OF ROCKY MOUNTAIN POWER Finally, Exergy appears to be attempting to be making a production out of the fact that only Idaho Power has filed its wind integration adjustment request, and not the other utilities. However, Exergy acknowledges that Commission orders have not required the three utilities to file simultaneous studies. Exergy Motion at 4. III.CONCLUSION Exergy s Motion to reinstate the 10 MW threshold for published avoided cost pricing for PacifiCorp and Avista should be denied. The Commission s Order No. 29839 makes clear that adjustments to published avoided costs should be conducted and evaluated based on the results of further study and evaluation of the respective utilities' electrical systems. The Commission should evaluate the merits of each of the three utilities' requests for an integration cost adjustment to published avoided costs. The Commission should continue to maintain the 100 kW threshold for published avoided cost prices for wind qualifying facilities until the integration cost issue is fully resolved through thorough and thoughtful Commission proceedings. WHEREFORE, Rocky Mountain Power respectfully requests that the Commission DENY Exergy s Motion. Respectfully submitted this 13th day of March 2007. d)~~_ Dean Brockbank Attorney for Rocky Mountain Power ANSWER OF ROCKY MOUNTAIN POWER CERTIFICATE OF MAILING I HEREBY CERTIFY that on the 1ih day of March 2007, I served a true and correct copy of the foregoing PETITION upon the following named parties by the method indicated below, and addressed to the following: Barton Kline Monica Moen Idaho Power Company PO Box 70 Boise, ill 83707 Scott Woodbury Deputy Attorney General Idaho Public Utilities Commission 472 West Washington Street O. Box 83720 Boise, ill 83720-0074 Jean Jewell Commission Secretary Idaho Public Utilities Commission 472 West Washington Boise, ill 83702 Richard L. Storro Director, Power Supply A vista Corporation 1411 E. Mission Avenue O. Box 3727, MSC- Spokane, W A 99220-3727 R. Blair Strong Paine, Hamblen, Coffin, Brooke & Miller 717 West Sprague Avenue, Suite 1200 Spokane, WA 99201-3505 Peter J. Richardson Richardson & O'Leary PLLC 515 N. 27th Street PO Box 7218 Boise, ill 83702 ANSWER OF ROCKY MOUNTAIN POWER --- c/' Hand Delivered S. Mail Overnight Mail FAX Hand Delivered S. Mail Overnight Mail FAX Hand Delivered S. Mail Overnight Mail FAX Hand Delivered S. Mail Overnight Mail FAX Hand Delivered S. Mail Overnight Mail FAX Hand Delivered S. Mail Overnight Mail FAX William J. Batt Hand Delivered John R. Hammond, Jr.S. Mail Batt & Fisher, LLP Overnight Mail 101 S. Capitol Blvd., Suite 500 FAX PO Box 1308 Boise, ill 83701 Michael Heckler Hand Delivered Director of Marketing & Development S. Mail Windland Incorporated Overnight Mail 7669 W. Riverside Dr., Suite 102 FAX Boise, ill 83714 Dean Miller Hand Delivered McDevitt & Miller LLP S. Mail 420 W. Bannock Overnight Mail Boise, ill 83702 FAX Armand Eckert Hand Delivered Magic Wind LLC S. Mail 716-B East 4900 North Overnight Mail Buhl, ill 83316 FAX Glenn Ikemoto Hand Delivered Principal S. Mail Energy Vision LLC Overnight Mail 672 Blair Ave.FAX Piedmont, CA 94611 David Hawk Hand Delivered Director, Energy Natural Resources S. Mail R. Simplot Company Overnight Mail 999 Main St.FAX PO Box 27 Boise, ill 83707-0027 R. Scott Pasley Hand Delivered Assistant General Counsel S. Mail R. Simplot Company Overnight Mail 999 Main St.FAX PO Box 27 Boise, ill 83707-0027 ANSWER OF ROCKY MOUNTAIN POWER William M. Eddie Advocates for the West 1320 W. Franklin St. PO Box 1612 Boise, ill 83701 Troy Gagliano 917 SW Oak St., Suite 303 Portland, OR 97205 LeRoy J arolimek 605 S. 600 W. Burley, ill 83318 Gerald Fleischman 11535 W. Hazledale Ct. Boise, ill 83713 ANSWER OF ROCKY MOUNTAIN POWER Hand Delivered S. Mail Overnight Mail FAX Hand Delivered S. Mail Overnight Mail FAX Hand Delivered S. Mail Overnight Mail FAX Hand Delivered S. Mail Overnight Mail ~epems Regulatory Analyst