20080724SRA Comments.pdf

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............;;~:\"-)\ Comments of the Snake River Allance,,-:'~;",\..
l~~.\Power Company's Application to Purchase Power from PPlilIPmlPlps . 03
;j") , Case No. IPC-E-08-13
July 24, 2008
The Snake River Allance appreciates the opportity to provide these comments to the Idaho
Public Utilties Commission relating to Case No. IPC-E-08-13, Idaho Power Company's
Application for an Accounting Order Authorizing the Inclusion of Power Supply Expenses
Associated With the Purchase of Capacity and Energy from PPL ENERGYPLUS, LLC in the
Power Cost Adjustment.
The Snake River Allance (Allance) has long been interested in promoting sustainable energy
opportities as an alternative to conventional fossil fuel-based energy resources in Idaho or as a
resource for purchases of power to be imported into Idaho. As such, the Allance is interested in
encouraging policies that promote renewable energy resources to serve Idahoans, as well as in
promoting energy conservation and efficiency measures to slow the growt of base load and
peak energy demands among Idaho's utilties.
The Allance understands and appreciates Idaho Power's position and acknowledges that this
docket is made necessar in par by the expiration of existing power purchase agreements with
PPPL Montaa in 2009. We also acknowledge that Idaho Power must meet its short-term power
needs, and that no new significant baseload generation is scheduled to come online for the next
two years or more.
Having said that, we continue to be concerned about the cost of this power purchase, and about
the growing gap between the Company's projected firm and sumer peak power needs. As
became evident in Idaho Power's 2008 Integrated Resource Plan Update, the Company's
projected peak demand continues to grow at rates greater than its forecasted firm load. For us,
that raises the question of whether additional efforts must be marshaled to reduce the summer
peak, which if successful would reduce the need for such expensive power purchase agreements
as this.
The Allance is not asking the PUC to deny Idaho Power's request in this case. Rather, we
encourage the Commission to consider some modifications that might fuher incentivize what
the Allance believes is an already impressive improvement by the utilty in its DSM programs.
One option might be to allow 90 percent of the requested purchase amount in the first year of the
contract, followed by 80 percent in the second, etc., and require the Company to make up the
difference through energy efficiency and conservation measures beyond those the company has
already implemented. This application is designed to address existing and chronic peak demand
problems, and incentives to expand those programs is appropriate. Curently, about half of theCompany's DSM budget is going to address peak demand concerns, notably the valuable
residential air-conditioning and also the irrgation cycling programs.
As for the cost of the power to be imported from Montana, the Allance agrees first that if power
must be imported durng these expensive summer months, importing it from an east-side
resource is logical given the well-established transmission constraints on the west side of the
Company's system. We're also mindful of the significantly higher market purchase costs durng
the peak sumer months. But we continue to believe that, including line losses, the cost of this
power will approach 11 cents per KWh - a price that poses challenges for ratepayers in all
classes. Furermore, the cost of this power underscores the need for the peak demand reductions
referenced above, as it does for a review of how the PUC and our regulated utilties define "cost
effective" energy efficiency measures.
Given the cost ofthis power, it's the Allance's hope that we can re-evaluate what we consider
"cost effective" for measures to be included in our utilties' DSM programs. If, for instance, an
amount similar to that contemplated for the purchase and import of 83 MW per hour to satisfy
peak demand needs were to be spent instead on air-conditioning replacement programs, the
utilty and its customers would benefit greatly by having a far more effcient fleet of air-
conditioners and also by the corresponding reduction in peak demand. We believe a redefinition
of what classifies as "cost effective" might make it easier to devote more utilty DSM fuds to
efforts that are not curently considered cost effective but in fact are in the long ru. It seems to
us that any and all efforts to reduce the sumer peak wil benefit both the company and its
customers - and would also reduce the need for expensive market purchase contracts such as this
one.
Once again, the Allance appreciates the opportity to submit these brief comments to the
Commission.
Respectfully submitted,
Ken Miler
Clean Energy Program Director
Snake River Allance
Box 1731
Boise,ID 83701
[phone]
kmiller(isnakeriveralliance.org