20070119Exergy comments.pdf

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Peter Richardson
Mark Thompson
515 N. 27th Street
Boise, Idaho 83702
[phone]
[phone] (fax)
peter(0richardsonandoleary .com \
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Attorneys for Exergy Development Group of Idaho LLC
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of Idaho Power
Company s 2006 Integrated
Resource Plan
Case No. IPC-06-
COMMENTS OF EXERGY
ON IDAHO POWER'S 2006
INTEGRATED RESOURCE
PLAN
COMES NOW, Exergy Development Group of Idaho LLC ("Exergy ), and
pursuant to this Commission s Notice of Filing and Notice of Comment Deadline
in the above-captioned proceeding, submits these comments on Idaho Power
2006 Integrated Resource Plan (IRP). For the reasons described below, the
Commission should deny Idaho Power s application to the Commission to accept
its 2006 IRP for filing.
The 2006 IRP overlooks important and obvious transmission
improvements.
Idaho Power acknowledges in its 2006 IRP that its transmission system is a
key element" in fulfilling its responsibilities as a public utility. 1 It then, however
gives short shrift to consideration of how it should best maintain and expand its
transmission system to meet its customers' needs. Idaho Power determines in its
2006 IRP to complete two transmission upgrades, totaling 285 MW, both of which
are to the Pacific Northwest.2 This determination is a disconnect from the big
picture in which Idaho Power operates and foregoes obvious opportunities for the
Company and its customers.
II.Idaho Power should not exclusively focus on transmission upgrades
to the Northwest.
Resources in the Pacific Northwest, to which Idaho Power is seeking
increased access, are predominantly hydroelectric generation. Likewise, Idaho
Power s generation system is largely hydroelectric. Thus, in years when
generation is abundant in the Pacific Northwest, it is also usually abundant on
Idaho Power s system. This means that Idaho Power s transmission expansions in
its 2006 IRP are wholly focused on accessing a market that is typically plentiful
when Idaho Power does not need power, and deficit when it does.
Additionally, the Pacific Northwest hydro-system is becoming increasingly
constrained due to operations for fish and wildlife mitigation, reducing surplus
energy that is available for sale outside the region. Load growth in the region is
also reducing surpluses, and causing utilities in the Pacific Northwest to look
2006 Integrated Resource Plan (hereinafter 2006 IRP), p. 20.
2006 IRP, p. 98.
EXERGY COMMENTS ON 2006 IRP
elsewhere for energy needs. Any advantage Idaho Power may be seeking to gain
from increased import capabilities from the Pacific Northwest, therefore, is
dwindling. And, in any event, Idaho Power s exclusive focus on transmission
upgrades to the Pacific Northwest does not represent a diversified or
complementary strategy for resource acquisition.
III.Idaho Power should expand its transmission system to the east and
south, where the resources are.
Idaho Power s determination to focus transmission expansion on access to
the Pacific Northwest seems to be the result of improper constraints it put on its
analysis in the 2006 IRP. Idaho Power explains that beginning with the 2000 IRP
it came to recognize that transmission constraints were limiting its options for
purchased power supply strategies.3 It then states that in order to "better assess
power supply requirements and available transmission, the 2006 IRP contains an
analysis of transmission system constraints for the 20-year planning period.
Unfortunately, Idaho Power s analysis "assumes all off-system market purchases
will come from the Pacific Northwest."
The Company s stated reason for assuming all off-system market purchases
will be from the Pacific Northwest is that
Many of the utilities to the east and south of Idaho Power also experience a
summer peak, and weather conditions that drive the summer peak are often
similar across the Intermountain and Rocky Mountain West. Idaho Power
2006 IRP, p. 36-37.
2006 IRP, p. 37.
2006 IRP, p. 32.
EXERGY COMMENTS ON 2006 IRP
believes it would not be prudent to rely on imports from the Rocky
Mountain Region for planning purposes.
Exergy submits that this analysis is overly simplistic and that Idaho
Power s conclusion ignores the obvious trend toward new resource development
to the east and south of it. Coal from the Power River Basin in Montana and
Wyoming is likely to be the source of significant amounts of new generation
resources for the region, and northwest utilities are already looking there and to
Utah coal plants for future power needs. Even Idaho Power s 2006 IRP
specifically calls for 250 MW of new coal-fired generation, and an additional 250
MW oflGCC coal generation.? Idaho Power is extremely unlikely to find such
new generation in the Pacific Northwest, and it is currently illegal to construct any
coal- fired generation plants in Idaho. It therefore makes little sense for Idaho
Power to overlook transmission to the east and south when common sense points
that direction for new resources.
In addition to coal resources, a substantial amount of new renewable energy
projects will be sited east of Idaho Power s service territory. The 2006 IRP
acknowledges this, but acts as though transmission constraints associated with
those new renewables will be addressed by a planned Borah- West transmission
path upgrade, scheduled for May 2007.8 This conclusion flies in the face of Idaho
Power s recent dealings with renewable energy developers, where it argues that
they should finance approximately $60 million of transmission upgrades it
2006 IRP, p. 32-33.
2006 IRP, p. 5.
2006 IRP, p. 99.
EXERGY COMMENTS ON 2006 IRP
contends must be completed in order to integrate renewable power onto its grid
and transport it to the Boise load center. 9 Exergy believes that what Idaho
Power s position really shows is that the obvious place for Idaho Power to focus
transmission expansion efforts would be toward the east and south, and that its
current system is inadequate to incorporate new desirable resources.
Idaho Power s finding that many of the utilities to the east and south of it
experience similar summer peaks does not favor a decision to ignore transmission
expansion in that direction. As stated above, considerable resources exist and are
expected in that region. The fact that other utilities will also be relying on those
resources does not justify Idaho Power s disregarding them. In short, Idaho
Power, like other utilities, must seek resources where they are located.
Additionally, Idaho Power s disregard of access to resources to the east and south
in favor of resources in the Pacific Northwest is troubling in light of its recognition
in the 2006 IRP that "(r)ecent history has shown even when power is available
from the Pacific Northwest market, short-term prices can be quite high and
volatile.lo It is also difficult to square Idaho Power s transmission conclusions
with its recent statement to this Commission regarding its 2004 IRP that "(t)he
See generally, Complaint of Cassia Gulch Wind Park LLC, Answer and Comments of Idaho Power, and
Comments of Exergy, on file with this Commission in Case No. IPC-06-21 (addressing dispute between
Cassia Wind and Idaho Power arising from Idaho Power s proposal to assign $60 million of transmission
upgrades to renewable energy project developers).
2006 IRP, p. 36.
EXERGY COMMENTS ON 2006 IRP
existing transmission system between Idaho Power and the Pacific Northwest has
been largely optimized." 11
Other entities are endeavoring to construct transmission to the east and
south of Idaho Power in order to gain access to the very resources Idaho Power
should be seeking. For example, the Arizona Public Service Company is
exploring the feasibility of constructing two new 500 kV transmission lines from
the Power River Basin and adjacent wind resources to northern Arizona, through
Utah, in order to access over 6000 MW of coal and wind resources there.l2 Again
it makes little sense for Idaho Power to overlook access to these resources as it
thinks through how it will serve its loads over the next twenty years. Given that
transmission projects require "considerable lead times 13 Idaho Power should not
put off transmission expansions which will undoubtedly prove needful in the
future.
IV.The Commission should not accept Idaho Power s 2006 IRP, and
should send it back to the Company to reconsider.
This Commission demands that a utility s filed IRP contain a "reasonable
assessment of supply and demand side opportunities available to the Company.
The analysis and conclusions offered in the 2006 IRP with regard to transmission
expansion, however, are not reasonable or well-considered. Without good reason
11 Response ofIdaho Power Company to Filed Comments on its 2004 IRP, p. 8, filed in Case No. IPC-
04-18.
12
See APS Study Plan, TransWest Express Project, Phase I-Feasibility Study, available at
http://www.oatioasis.com/AZPS/ AZPSdocs/TransW estExpressProiect-FS Plan 7.pdf.
13 2006 IRP, p. 63.
14 Order No. 29189, p. 20, Case No. IPC-02-8 (February 11 2003).
EXERGY COMMENTS ON 2006 IRP
Idaho Power fails to fully consider transmission options that would open a wealth
of resource opportunities. Instead, the Company disregards transmission
expansion opportunities to the east and south, and focuses myopically on upgrades
to the Pacific Northwest, where resources do not complement Idaho Power
existing system, and where any advantages are likely fading.
F or all the reasons stated above, the Commission should deny Idaho
Power s application to accept for filing its 2006 IRP, and should require the
Company to reconsider its analysis and conclusions.
Respectfully submitted this 19th day of January 2007.
1?~
Peter Richardson ISB # 3095
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the forgoing Comments of
Exergy in Docket No. IPC-06-24 were mailed via U.S. Mail postage prepaid on
January 19 2007 to:
Bart Kline, Senior Attorney
Idaho Power Company
PO Box 70
Boise, Idaho 83707
Lisa Nordstrom, Esq.
Idaho Power Company
PO Box 70
Boise, Idaho 83707
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EXERGY COMMENTS ON 2006 IRP