20090612Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSIONER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL

DATE: JUNE 11, 2009

SUBJECT: CASE NO. IPC-E-09-03 (Idaho Power)
JOINT MOTION TO STAY PROCEEDINGS

On March 6, 2009, Idaho Power Company (Idaho Power; Company) filed an
Application with the Idaho Public Utilities Commission (Commission) in Case No. IPC-E-09-03
for a Certificate of Public Convenience and Necessity (Certificate) authorizing construction of
the Langley Gulch Power Plant (Langley Gulch; Project) and inclusion of the Project in the
Company’s rate base. Idaho Code §§ 61-526, -528; RP 112; Idaho Code § 61-541 (7/1/2009).
Pursuant to Notice issued April 20, 2009, the following scheduling remains:
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Technical hearing in Case No. IPC-E-09-03 is scheduled to commence on July 14, 2009.
On May 29, 2009, a Joint Motion to Stay Proceedings in Case No. IPC-E-09-03 for at
least 10 months was filed by the Industrial Customers of Idaho Power, Idaho Irrigation Pumpers
Association, Snake River Alliance, Idaho Conservation League, and Northwest & Intermountain
Power Producers Coalition (collectively Movants).
JOINT MOTION FOR STAY
Movants contend that significant and unforeseen events have taken place since Idaho
Power initially filed its Application. Any single one of these events, they contend, would be
sufficient to cause reasonable persons to seek to slow down the Company’s forced march to seek
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Commission action on its request for a Certificate, however, they contend that when taken in
concert, the cumulative effect of the following events makes a stay of this proceeding critical.
I. Unprecedented Shareholder Vote Casts Doubt on Idaho Power’s Resource Future
Idaho Power shareholders, over the objections of management, passed a resolution
directing the Company to develop a plan for reducing its emissions of greenhouse gasses.
Although the resolution was advisory in nature, Company management agreed to be bound by it
and will have its greenhouse gas reduction strategy report prepared by September 30, 2009.
Movants note that Idaho Power’s most recent Integrated Resource Plan (IRP) does not have a
greenhouse mitigation strategy. Exactly where the Langley Gulch Power Plant, a greenhouse
intensive emitting facility, will fit in the yet to be written plan is unclear. Granting a Certificate
now, before the Company’s greenhouse strategy is published, Movants contend, is premature at
best and possibly a costly mistake that may well conflict with the Company’s announced plans to
reduce its greenhouse gas emissions.
II. Idaho Power has Delayed Publication of its 2009 Integrated Resource Plan
Pursuant to Idaho Power petition, the file date for the Company’s 2009 Integrated
Resource Plan was extended from June 2009 until December 31, 2009, Case No. IPC-E-09-13,
Order No. 30815. Granting a Certificate for the Langley Gulch Plant without a current IRP to
instruct prudence questions, Movants contend, is clearly an instance of putting the proverbial cart
before the horse. Because the economy has shifted so dramatically as to cause Idaho Power to
require a delay in the publication of its 2009 IRP, Movants contend then that the Commission
processing of the Certificate Application should likewise be delayed.
III. New Idaho Legislation Makes the Commission’s Decision
in this Case One of the Most Far Reaching in Idaho PUC History
The Company has asked that the newly enacted Idaho Code § 61-541 be applied to
the Commission’s Certificate Order. If so granted and a Certificate is also granted for Langley
Gulch, the Commission will essentially lock in its decision for the life of the plant without
permitting future prudence review. Movants respectfully urge the Commission to proceed with
extreme caution in applying its new authority for the first time given its long lasting impact on
future generations of ratepayers. Movants believe that a more deliberative process is necessary
than that provided by the current, expedited schedule.

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IV. Idaho Power Should Have Little Problem
Renegotiating its Prepaid Turbine Deal
Movants are cognizant of Idaho Power’s commitment to make a September 1, 2009,
payment on the turbines it has already ordered from Siemens. Given the soft market for turbines
of any type, Movants are confident that Idaho Power will most likely be able to negotiate an
extension of that payment date, perhaps for a price; but nevertheless a deadline of Idaho Power’s
own creation, Movants contend, should not drive this Commission as it considers the
ramifications of granting a Certificate (with no future prudence review) in this economic climate.
V. Idaho Power has Already Delayed the Plant’s Online Date
As initially proposed, the Langley Gulch Power Plant was to come online in time to
meet the summer load of 2012. Langley Gulch is a base load unit and Idaho Power’s energy
load/resource balance is most critical during the summer months. In spite of the summer being
the Company’s most critical load/resource period, Idaho Power has delayed the online date until
December 2012 which puts the plant online exactly at a time when Idaho Power does not need
additional resources. At worst, the plant will be needed in the summer of 2013. Idaho Power’s
ability to meet load, Movants contend, will not be in jeopardy by a delay in this docket’s
schedule.
VI. The Continued Unprecedented Recession will have
Direct Impact on Immediacy of Need for New Power Plants
While the Movants appreciate Idaho Power’s foresight in considering new resources
for robust growth, when that growth disappears, Movants contend that it is appropriate to delay
the proceeding to evaluate issuance of a Certificate at least until evidence surfaces that load
destruction has ended and that a general recovery has begun.
VII. Other Regional Utilities are Mothballing Planned Expansions
While not suggesting that Idaho Power should follow the lead of other utilities in the
region (e.g., PacifiCorp), Movants contend that when one finds oneself on the edge of such great
uncertainty and others are slowing down to assess the best future course of action, it may be
prudent to slow down as well.
VIII. The Impacts of Idaho Power’s Demand Response
Programs have not been Ascertained
On January 14, 2009, in Order No. 30717 (Case No. IPC-E-08-23), the Commission
approved significant changes to the Company’s Irrigation Peak Rewards Program. The changes
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authorized a new dispatchable curtailment program that is expected to increase avoided peak
demand from the 35 MW realized during the summer of 2008 to an estimated 144 MW in 2009,
186 MW in 2010, and 232 MW in 2011. Movants believe that these amounts will prove to be
conservative in light of the fact that Idaho Power already has more irrigators wanting to
participate in the new dispatchable program than it can physically provide the infrastructure for.
In addition, programs such as the AC Cool Credit Program and the newly authorized
Commercial Demand Response Program administered through EnerNOC will continue to
significantly expand Idaho Power’s demand response programs. These programs, Movants
contend, minimize the need for Idaho Power to acquire more expensive supply-side resources
such as Langley Gulch. These demand response programs, Movants contend, need to be
included in the IRP and their effects quantified in determining whether new supply-side
resources are necessary. Delaying this proceeding to allow this to happen, Movants contend, is a
prudent course of action for the Commission to take.
For all of the foregoing reasons, Movants respectfully request that the Commission
delay the procedural schedule in this docket by at least 10 months.
IDAHO POWER ANSWER
Idaho Power’s Answer is due June 12, 2009. IDAPA 31.01.01.057.
COMMISSION DECISION
A Joint Motion to Stay Proceedings in Case No. IPC-E-09-03 was filed on May 29,
2009. Staff/Intervenor direct testimony is due June 19, 2009. The hearing is scheduled to
commence on July 14, 2009. Should proceedings in Case No. IPC-E-09-03 be stayed?

Scott Woodbury
Deputy Attorney General

bls/M:IPC-E-09-03_sw4