20090514SRA-ICL Comments.pdf

May 14,2008
REC:E,l
TO: Jean Jewell
Idaho Public Utilities Commission Secretar
472 West Washington
Boise, ID 83702
2009 Mf\Y \4 PM 12: 05
FROM: Ken Miler
Snake River Allance
Box 1731
Boise, ID 83701
Ph: [phone]
RE DOCKET IPC-E-09-11: IDAHO POWER COMPANY'S APPLICATION FOR
AUTHORITY TO IMPLEMENT POWER COST ADJUSTMENT RATES FOR
ELECTRIC SERVICE FROM JUNE 1,2009, THROUGH MAY 31, 2010
COMMENTS FROM THE SNAKE RIVER ALLIANCE AND THE IDAHO
CONSERVATION LEAGUE
Dear Ms. Jewell:
Please accept the following comments on behalf of the Snake River Allance (SRA) and the
Idaho Conseration League (ICL) relative to the Commission's docket, IPC-E-09-1 1.
The Snake River Allance is an Idaho-based non-profit organization established in 1979 to
address Idahoans' concerns about nuclear safety issues. In early 2007, the Allance expanded the
scope of its mission by launching its Clean Energy Program. The Allance's energy initiative
includes advocacy for renewable energy resources in Idaho; expanded conseration and
effciency programs offered by Idaho utilities and the Bonnevile Power Administration; and
local, state, regional, and national policies and initiatives that advance sustainable and affordable
energy policies. The Allance pursues these programs on behalf of its members, many of whom
are customers of Idaho's reguated utilties.
For thirty-four years, ICL has been Idaho's voice for clean water, clean air, and wilderness-
values that are the foundation to Idaho's extraordinar quality of life. The Idaho Conservation
League works to protect these values though citizen action, public education, and professional
advocacy. As Idaho's largest state-based conseration organization we represent over 9,500
members, many of whom have a deep personal interest in protecting our clean air, clean water,
and quality of life.
SRA and ICL understand and appreciate the need for the instant Power Cost Adjustment (PCA)
before the Commission. And, for the most par, we agree with Idaho Power Co. on the need to
recover expected and unexpected power costs over the past year. However, our members, like all
Idaho electrc utilty customers, report growing concerns over utilty rate "sticker shock" that has
become an increasingly burdensome par of their lives - paricularly in the curent economic
climate.
UTILITY RATE 'STICKER SHOCK'
As the Commission noted upon completion of its laudable energy affordabilty workshop (GNR-
U -08-01), a growing number of Idahoans face significant challenges in simply paying their
utilty bils. This is not the fault of Idaho's regulated utilties; it is the result of a conspiracy of
economic events that have left many consumers unable or less able to pay steadily increasing
power bils. The Commission acknowledged the breadth of this problem in issuing ORDER No.
30724:
"A variety of factors are contributing to significant upward pressure on electrc and
natual gas rates in Idaho. In addition, Idaho citizens are facing broader economic
challenges. As a result, energy affordabilty has become a central issue for many Idaho
households and businesses."
Idaho Power customers can be forgiven for strggling to remain curent on the PUC cases that
affect their electrc rates and their household budgets. Within the past year and restrining these
comments to Idaho Power, customers have seen:
A rate case (IPC-E-08-10) that added 3 percent to the residential bil, according to the
PUC.
A fixed cost adjustment (IPC-E-09-06) that is pending before the Commission and likely
reflects a small increase to residential customers.
A request to rate-base the $71 milion to implement the AMI (IPC-09-07) curently
before the Commission, which if granted would result in an increase of 1.6 percent.
A proposed energy effciency tarffrider (which SRA and ICL support) in case IPC-E-
09-05 that if granted would result in an increase from the curent 2.5 percent to 4.75
percent.
And the 9.3 percent residential increase envisioned in the instant PCA request.
For many consumers, the level of these rate increases and the frequency with which they are
presented to the Commission and ultimately to consumer are not sustainable. Again, the Snake
River Alliance and the Idaho Conseration League do not fault Idaho Power for this dilemma;
we simply want to remind the Commission what is confronting customers.
CONCERNS ABOUT NATURA GAS
It is evident in this docket that Idaho Power and its customers are increasingly exposed to price
volatilty risk with regard to the Company's growing reliance on natural gas - at least for
capacity puroses and, should Langley Gulch be approved, for energy puroses as well.
In its ORDER 30563 in Docket IPC-E-08-07, which was Idaho Power's last PCA, the
Commission said:
,
"The Commission remains concerned about the increased use ofthe natual-gas-fired
peaking plants, as indicated in Idaho Power's filings in this case. In previous Orders, the
Commission has noted concers with the volatilty of natural gas prices. We are also
increasingly concerned with the persistent high price of natural gas this year."
We share the Commission's concerns about any utilty's increased reliance on natual gas to
meet energy or capacity needs. But as the Commission is aware, Idaho Power intends to
significantly increase its reliance on natual gas through its intended constrction of the Langley
Gulch combined cycle gas plant (IPC-E-09-03). We believe the Company's increasing
dependence on natural gas for energy should be addressed once again in this docket, as it
exposes the ver consumer and ratepayers we represent with greater PCA uncerainties in futue
filings. While it is tre that natural gas prices have dropped dramatically since last summer and
have only recently begun to rise again, the larger issue remains that prices for this fuel are
extremely volatile.
In addition, SRA and ICL note that in ORDER 30563 in Docket IPC-E-08-07, commissioners
expressed interest in learing more about the deployment of Idaho Power's gas peaking fleet
(emphasis added):
"Recognizing the interlay between ruing gas-fired plants and purchasing power in the
market, where gas-fired generation is on the margin, the Commission desires more
detailed information about Idaho Power's daily decisions to ru its gas-fired peaker or
purchase wholesale power in order to meet load and/or make off-system sales. Thus the
Commission directs Idaho Power to either provide this infòrmation in its monthly peA
Deferral Report or devise an alternative way of making this information available to the
Commission. "
We expect that this information has been provided to the Commission, and that its order in this
docket reflects such. However, we do not see the information as having been submitted in IPC-
E-08-07. If it has not, or if it has but has not been disclosed for proprietar reasons, we urge the
Commission to explain the status of this important and well-founded directive.
HYDROPOWER FORECASTS
The final issue we would like to bring to the Commission's attention is the role hydropower wil
play in power delivery in the coming year. Neither SRA nor ICL have the resources to employ
professional engineers or analysts to determine the prudency of the Company's projections.
However, we would bring to the Commission's attention the same concers we have heard from
our membership and from others in Idaho Power's service terrtory:
Based on data available to most consumers of electrcity in souther Idaho as well as recent news
accounts, a minority of those consumers would logically believe that the current water year is
markedly below normal or below that of the past year. Many of the water basins that are par of
Idaho Power's hydro system seem to be enjoying reservoir levels and basin levels that appear to
be close to normaL.
.
Given the tremendous pressure already burdening Idaho Power customers as outlined above, we
urge the Commission to carefully scrutinize projections of a lower-than-normal 2009
hydropower system and deterine whether this portion of the PCA request is waranted, or if
off-system purchases as a result oflower-than-forecasted hydro production would more
prudently be recovered in the 2010 PCA.
If you have questions about our interest in this matter, please contact Ken Miler at (208) 344-
9161 or Betsy Bridge at 208-345-6933 ex. 12.
Respectfully,
Ken Miler
Snake River Allance
Betsy Bridge
Idaho Conseration League