20100415ICL Comments.pdf

RE
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Con Leue
PO Bo 84 Bo, ID 83701
20345.6933
Idao Public Utilties Commission
PO Box 83720
Boise, ID 83720-0074
Apri 15, 2010
RE: Idao Conservation League Comments on Idao Power Company's 2009 Integrated
Resource Plan, Cas No. IPC-E-09-33
Honorable Commissioners:
Thank you for the opportunity to comment on Idao Power's 2009 Integrted Resource Plan.
For thirty-four years, the Idao Conservtion League r'ICL") has been Idao's voice for clean
water, clean air, and widernessvaues that are the foundation to Idao's extraordiar quaity of
life. As Idao's largesfstate-based conservation organization we represent over 9,500 members,
many of whom have a deep personal interest in protecting our clean air, clean water, and quaity
of life.
ICL served on the IRP Advisory Council ("IRP AC"), attended all IRP AC meetings and submitted
detaied comments on severa occasions. ICL appreciates the Idao Power's inclusion of a public
process and its wilingness to engage in dialogue and answer our questions regardig the IRP.
Idaho Power has made a great deal of progress in adopting a plan with a more envinmentaly
sound resource portfolio, but there is so much more that ca be done. ICL is excited to see the
amount of progress made and looks forward to a strategic and detaied plan to reduce its
greenhouse ga emissions in the 2011 IRP.
ICL comments below pertai to Idao Power's greenhouse ga reduction goals, energy efficiency
and demand side management progrs, supply side resources, and public policy issues.
i. GREENHOUSE GAS ("GHG") EMISSIONS REDUCTION
Whether it comes in the form of a cap and trade sytem or reguation by the U.S. Envionmental
Protection Agency ("EPA") carbon wil car a heavy cost in the near future. The better prepared
the Company is to "reduce its carbon emissions, the better Idao Power customers wil fair under
carbon reguation. Unlike previous IRPs which utilzed a carbon adder to account for the social
costs of carbon, the 2009 IRP models a cap and trade scenaro that reduces the Company's output
from its coal facilties based on the number of alowances that are expected to be alocated to the
company. Approachig the portfolios from a position of being carbon constrained versus using a
carbon adder when calculating operational costs recognizes the end goal of carn reguation
regadless of form - to reduce carbon emisions.
ICL is pleasd that Idao Power ha establised goals to reduce its resource portfolio's average
carbon emission intensity for the 2010 thrug 2013 time period to a level of 10% to 15% below
the Company's 2005 levels. ICL also appreciates that the Company wil make its carbon emissions
public by publishig this information on its website.
Whe these are positive developments, the 2011 IRP should include a more detaied plan on how
the Company plans to reach it cabon reduction goals and curai its coal operations. As part of
the greenhous ga reduction strategy Idao Power should include the quatity of greenhous ga
emissions per average megawatt hour asociated with each portfolio. Ths wi better inform the
Company and IRP AC members and alow for more meaningful feedback.
One issue of specific concern is the Company's plans regadig the Boardman coal plant. The
Oregon Depament of Envionmental Quaity ("DEQ") is requig Portland Genera Electric
("PGE") to make $600-700 milon of investments to reduce the sulfur and nitrous oxide
emissions or close the plant down beween 2014-2018. Idao Power ha a 10% ownership in the
plant, which contributes about 50-60 aMW to its system. PGE origialy planned to make the
investments and keep the plant runing until 2040. Since the publication of this IRP, PGE has
changed course and offered to close the plant by 2020. Advocacy groups continue to pressure
PGE to close Boardman even sooner.
Because of these developments, the 2011 IRP mus explai Idao Power's plan for a future
without Boardman. ICL submits that continued development of energy efficiency measures is the
least cost, leas risk, and most envionmentaly respnsible way to plan for this future.
II. ENERGY EFFICIENCY AND DEMAND SIDE MANAGEMENT
Energy efficiency and demand side management (DSM) remains the cheapest, cleanest, and
fastest way to meet Idao's energy needs. Increased savigs from efficiency and DSM progrs
benefit all customer class by reducing the need for new generation, distribution, and
trasmission.
Severa related factors dicussed in the IRP reveal the growig importance of investments in
effciency and DSM. The 2009 IRP forecas peak hour load wi grow at rougy twice the rate of
average syem load The IRP also detais the growig constrats on t~e regional transmission
infraructure and continued volatilty to natur ga prices. The IRP predicts that retai rates wil
continue to climb througout the planning horion. Finaly, the IRP explais the capacity
constraits that may result in the inabilty to serve large new loads. Reducing both average load
throug efficiency investments and peak load through demand response progrs address all of
these issues.
The IRP incorporates the findigs of the Idao Power 2009 DSM Potential Study authored by
Nexant. ICL notes that the IRP only refers to the "achievable" potential reductions, which are far
less than the "economic" potential indentified in the study. For example, page 3-1 of the Nexant
report grphs the potential savigs in the residential sector. The "achievable" reductions are
rougy one quaer of the "economic" potential. Accordig to Nexant, "economic" potential is
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the level of reductions that pass the Total Resource Cost and Utilty Cost tests whie "achievable"
potential factors in predicted levels of progr paricipation.
ICL submits that Idaho Power, the Commission, and other interested paries should make every
possible effort to achieve al the economic potential for energy efficiency in Idao. At least since
1989 in Order 22299, the Commission has diected Idao Power to purue every cost effective
conservation measure avaiable before committing to new generation resources. Whe the 2009
IRP reveals some progress towards this goal, ICL believes the Commission should direct Idao
Power to redouble its efforts in the 2011 IRP to achieve the economic potential for DSM
documented in the Nexant report.
III. SUPPLY SIDE RESOURCES
ICL is pleased to see the Company's continued interest in acquig geothermal energy. Idao has
some of the best potential for geothermal energy development in the country, and geothermal
provides base load power unlike many other renewables. ICL understands that the results of the
previous geothermal RFP were disappointing but is pleased to see it has not discourged Idao
Power from continuig to pursue this vauable resource. Paricularly in light of the eminent
closure of Boardman, the likelihood of a carbon constraied future, and the impact of fish
mitigation measures on hydropower resources geothermal wil be an increasingly important supply
side resource in the future.
Similarly, ICL is pleased to see Idao Power's interest in puring combined heat and power (CHP)
projects. CHP has the potential to provide cost effective, reliable, and clean power to Idao Power
customers. ICL is excited to see the results of the project between Idao Power, the Idao Offce
of Energy Resources, and Amalgamated Suga.
The 2009 IRP explais that peak demand continues to outpace average demand througout the
planning horizon. "ICE is dismayed'ldao Power continues to focus on ga fired peaker plants to
meet this growth. Whe natural ga prices are low today, they remai highy volatile. Meanwhie,
solar generation matches Idao Power's load profie and the price continues to decline rapidly.
ICL urges the Commission to support investments in solar power as opposed to natur ga.
IV. PUBliC POliCY ISSUES
A. New Lage Loads
The 2009 IRP continues to not plan for additional lare loads. However, economic development
and job creation remai a top priority for the state. ICL believes the Commission should direct
Idao Power to plan for new large loads in the 2011 IRP. In doing so, the 2011 IRP should
consider using effciency and DS investments to free up existing capacity. ICL also encourges
Idao Power and the Commission to consider policies that encourage a high ratio of jobs created
per megawatt hour consumed.
B. Renewble Energy Acquisition and Renewable Energy Certicates (RECs)
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Respondig to Commission Order 30818, Idao Power submitted a Renewable Energy Credit
Management Plan on December 30,2009. Under thi plan Idao Power wi continue acquire
REC's, but sell them and retur the income to ratepayers throug the PCA. ICL believes this plan
is an appropriate response to the Commission's Order and the curent state of affai.
C. Emison Offses
Idao Power should reduce GHG emissions diectly from the electricity generation servg its
customers. It should not purchae offsets as a means of meeting required GHG emission
reductions. First, Idao Power has agreed to a GHG reduction strategy pursuat to the shareholder
initiative. The essence of the initiative is to reduce emisions from the Company's own
generation, not by purchaing offsets.
Second, the curent carbon offset market is not sufficiently reliable to asure actua cabon
reductions. In order to achieve the goal of actuay reducing cabon emisions ICL believes Ida
power should focus investments on measurble, veriable, and durble reductions.
D. Solar Pilot Project
ICL strongly encourges Idao Power to develop a solar pilot project. The Company ha much to
ga from solar energy because its avaabilty coincides with Idao Power's pea demand The
option to develop a photovoltaic (PV) project at a substation near existing load is an excellent idea
and one that should be purued The economy of sce benefits in addition to the utilizing
existing trasmision and distribution wi make the project economicay viable. ICL also finds
the idea of alowig cusomers to purcha shaes in a solar pilot project to be a novel approach
worthy of additional investigation. Allowig customers to purcha shaes could demonstrate the
public's interest in payig a bit more for generation whie not requig al ratepayers to do so.
Thank you for the opportunity to comment on this application. ICL looks forward to working
with Idao Power and the other IRP AC members on the 2011 IRP. If you have questions about
our interest in thi matter, pleas contact Ben Otto at [phone] ext. 12 or at
bottoC!idahocon servation .org.
sinzt~ii_
Benjamin Otto
Energy Assciate
Idao Conservtion League
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