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Home My WebLink About20050721Objection to IPC motion modify schedule.pdf, 7 William J. Batt John R. Hammond, Jr. BA TT & FISHER, LLP U S Bank Plaza, 5th Floor 101 South Capitol Boulevard O. Box 1308 Boise, Idaho 83701 (208) 331-1000 (208) 331-2400 facsimile ::ECEIVED :~ ! LED F". ... 2005 JUL 21 PM 12: 44 iLl no PUBLIC dTILITIES COr71HfSSJON Attorneys for Windland Incorporated BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE PETITION OF IDAHO POWER COMPANY FOR AN ORDER TEMPORARIL Y SUSPENDING IDAHO POWER'S PURPA OBLIGATION TO ENTER INTO CONTRACTS TO PURCHASE ENERGY GENERA TED BY WIND- POWERED SMALL POWER PRODUCTION FACILITIES Case No. IPC-O5- OBJECTION TO IDAHO POWER'S MOTION TO MODIFY SCHEDULE COMES NOW Windland Incorporated , " (Windland") by and through its counsel and makes this Objection to Idaho Power Company s ("Idaho Power ) Motion to Modify Schedule. OBJECTION TO MOTION TO MODIFY SCHEDULE In opposition to Idaho Power s Motion, Windland asserts that the Idaho Public Utilities Commission ("Commission ) should not approve any additional wind QF contracts until certain questions are answered and thus Idaho Power s request to engage in settlement negotiations is premature. As the prefiled testimony in this matter demonstrates, wind energy is different from dispatchable combined cycle combustion turbine ("CCCT") energy. The Commission has previously adopted the CCCT as the surrogate avoided cost resource for setting avoided costs. Based on the fundamental differences between wind and CCCT energy it is likely that applying the Commission approved avoided cost rate to qualifying facility ('QF") wind projects is not OBJECTION TO IDAHO POWER COMPANY'S MOTION TO MODIFY SCHEDULE, P. 1 OR\G\NAL appropriate and a different methodology should be established to ensure that the rate is just and reasonable in accordance with the Commisison s statutory mandates under state and federal law. Windland agrees with Idaho Power s premise that the current avoided cost rate is too high, at least for wind, and that the price should be revisited by the Commission. Section 210 of the PURP A requires that the rates paid to QFs should not "exceed the incremental cost to the electric utility of alternative electric energy . 1 In its testimony and pleadings, Idaho Power has claimed that the RFP has produced an average price of $55 per MWh. This price, and other testimony suggests that the current incremental cost of wind generated alternative electric energy in the Idaho Power service territory is well below the avoided costs established in Order No. 29646. Based on these facts the Commission should not delay this proceeding to allow the parties time for settlement negotiations that would bind Idaho Power into buying further Q resources at unjust and unreasonable rates. Windland asserts that only those QFs who have signed contracts with Idaho Power and have been approved by the Commission, have any claim to receive the avoided cost rate as set by Order No. 29646. Any other QF projects should not be allowed to receive this rate regardless of its maturity if the Commission has not yet approved a contract and it finds that the rate as applied to wind QFs is unjust and unreasonable. Windland asserts that Idaho Power s standard form PURP A contract recognizes that the Commission must approve QF contracts. Section 24.1 of these contracts states: This Agreement shall become finally effective upon the Commission s approval of all terms and provisions hereof without change or condition and declaration I Public Utilities Regulatory Policy Act of 1978, 21 O(b )(2).2 Indeed Windland's bid for selling the output of the Cotterrel wind farm is lower than both the avoided cost rate of $61 per MWh for PURP A projects and the Idaho Power claimed $55 per MWh price, fact which further demonstrates that using the current avoided cost rate for wind powered QFs is unjust and unreasonable. Heckler 3. Windland also asserts that its bid was not in anyway influenced by the PURPA avoided cost rate. Heckler pp. 3- OBJECTION TO IDAHO POWER COMPANY'S MOTION TO MODIFY SCHEDULE, P. 2 that all payments to be made to Seller hereunder shall be allowed as prudently incurred expenses for ratemaking purposes. Windland asserts that through this provision, the Commission should not approve additional QF contracts if it finds that the current avoided cost rate is unjust and unreasonable. Thus, the Commission could not find that Idaho Power was incurring the costs of additional wind QF resources prudently. If the Commission allowed any grandfathering, the consequence is that Idaho Power and ratepayers would pay approximately $3 300 000.00 dollars more for a PURP A 10.5 MW namplate capacity project as opposed to the same amount of energy being procured through the average RFP bid.3 This simply is not in the public interest and the Commission should not delay this proceeding to allow the parties to consider the issue of grandfathering when it is likely that applying the avoided cost rate to wind QF projects is unjust and unreasonable. Based on the foregoing, Windland believes that this proceeding should proceed on the current track. The Commission should revisit the avoided cost rate for wind QFs. The Commission should also encourage Idaho Power to proceed with its 2005 Wind RFP. Through the RFP process, Idaho Power and the Commission can harness competitive forces to establish a market price for wind generation in the Idaho Power territory, which can be used as a factor in determining what the new avoided cost rate should be. Accordingly, Windland respectfully request that this proceeding not be delayed. 3 This figure is generated by taking the known $61 per MWh avoided cost rate and the RFP bid price of $55 per MWh, per Idaho Power s Petition and assuming a plant with a 10.5 nameplate capacity, with a 30% capacity factor that operates for 8760 hours per year under a 20 year contract. OBJECTION TO IDAHO POWER COMPANY'S MOTION TO MODIFY SCHEDULE, P. 3 DATED this 21st day of July, 2005. Respectfull y S ubmi tted Jo R ammond, Jr. TT FISHER, LLP10 outh Capital Blvd., Suite 500 O. Box 1308 Boise ID 83701 (208) 331-1000 OBJECTION TO IDAHO POWER COMPANY'S MOTION TO MODIFY SCHEDULE, P. 4 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 21 st day of July, 2005 , I served the foregoing upon all parties of record in this proceeding as indicated below. Barton L. Kline Monica B. Moen IDAHO POWER COMPANY O. Box 70 Boise, ID 83707-0070 bk 1 ine(~jdahopower. com mmoen(fYidahopower. com J Certified Mail J First Class Mail J Hand Deli very J Facsimile ( x J Electronic Mail Peter J. Richardson RICHARDSON & O'LEARY PLLC 515 N. 2ih Street Boise, ID 83702 peter(fYrichrdsonandoleary.com J Certified Mail J First Class Mail J Hand Deli very J Facsimile ( x J Electronic Mail Richard L. Storro Director, Power Supply A VISTA CORPORA nON 1411 E. Mission Ave O. Box 3727, MSC- 7 Spokane, W A 99220-3727 dick. storro(fYavistacorp. com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail R. Blair Strong PAINE, HAMBLEN, COFFIN BROOKE & MILLER LLP 717 West Sprague Avenue, Suite 1200 Spokane , W A 99201-3505 r. blair. strong(m,painehamblen.com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail Scott Woodbury Deputy Attorney General IDAHO PUBLIC UTILITIES COMMISSION 424 W. Washington Street O. Box 83720 Boise, ID 83720-0074 scott. woodbury(W,puc. idaho.gov J Certified Mail J First Class Mail J Hand Deli very J Facsimile ( x J Electronic Mail OBJECTION TO IDAHO POWER COMPANY'S MOTION TO MODIFY SCHEDULE, P. 5 Michael Heckler Director of Marketing and Development WINDLAND INCORPORATED 7669 West Riverside Drive, Suite 102 Boise, ID 83714 Telephone: (208) 377-7777 Facsimile: (208) 375-2894 mheckl er(fY windland. co m J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail Dean J. Miller McDEVITT & MILLER LLP 420 W. Bannock Boise, ID 83702 oe(fYmcdevitt - miller .com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail Jared Grover CASSIA WIND LLC CASSIA GULCH WIND PARK LLC 3635 Kingswood Drive Boise, ID 83701 J Certified Mail ( x J First Class Mail J Hand Delivery J Facsimile J Electronic Mail Armand Ecker MAGIC WIND LLC 716-B East 4900 North Buhl, ID 83316 J Certified Mail (x J First Class Mail J Hand Delivery J Facsimile J Electronic Mail Glenn Ikemoto Principal ENERGY VISION LLC 672 Blain Avenue Piedmont, CA 94611 glenni(fYpacbell.net J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail Bob Lively P ACIFICORP One Utah Center, 23rd Floor 201 S. Main Street Salt Lake City, UT 84140 bob.livel y(fYpacificorp.com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail OBJECTION TO IDAHO POWER COMPANY'S MOTION TO MODIFY SCHEDULE, P. 6 Lisa Nordstrom P ACIFICORP 825 NE Multnomah, Suite 1800 Portland, OR 97232 Ii sa. nordstro m(fYpacifi corp. com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail David Hawk Director, Energy Natural Resources R. SIMPLOT COMPANY 999 Main Street O. Box 27 Boise, ID 83707-0027 dhawk(fYsimplot.com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail R. Scott Pasley Assistant General Counsel J .R. SIMPLOT COMPANY 999 Main Street O. Box 27 Boise, ID 83707-0027 ~pasley(fYsimp lot. com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail William M. Eddie ADVOCATES FOR THE WEST 1320 W. Franklin Street O. Box 1612 Boise , ID 83701 billeddie(fYrmci .net J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail Troy Gagliano 917 SW Oak Street, Suite 303 Portland, OR 97205 J Certified Mail ( x J First Class Mail J Hand Delivery J Facsimile J Electronic Mail OBJECTION TO IDAHO POWER COMPANY'S MOTION TO MODIFY SCHEDULE, P. 7