20100211Proposed Outline.pdf

BARTON L. KLINE
Lead Counsel
bklinecæidahopower.com
esIDA~POR~
An IDACORP company
February 10, 2010
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-10-03
IN THE MATTER OF THE DEVELOPMENT OF REQUEST FOR
PROPOSAL (RFP) GUIDELINES FOR THE PROCUREMENT OF SUPPL Y-
SIDE RESOURCES BY IDAHO POWER COMPANY
Dear Ms. Jewell:
Enclosed for filing in accordance with Order No. 30999, please find an original and
seven (7) copies of Idaho Power Company's proposed Outline of Competitive Acquisition
Guidelines in the above matter.
Very !ïIY lo~r~,i~b-
Barton L. Kline
BLK:csb
Enclosures
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02/10/10
OUTLINE OF
COMPETITIVE ACQUISITION GUIDELINES
A. Introduction
The following is an outlne of proposed guidelines for competitive procurement of
generation resources. They are not mandatory. If Idaho Power Company ("Idaho
Powet' or "Company") chooses to acquire a generation resource without an RFP or
undertake an RFP that does not fully comply with these guidelines, it may do so.
However, in that case, when it comes time to include in rates the cost of any resources
that were acquired in a manner that does not conform to these guidelines, Idaho Power
will have the burden to prove that the resource acquisition process it used was fair,
reasonable, and sufficient under the circumstances that existed at the time.
Correspondingly, compliance with the following guidelines creates a presumption that
the resource acquisition process was penormed in a manner that was fair, reasonable,
and suffcient.
B. Competitive Acquisition Guidelines
1. Guideline Applicabilty. These guidelines are only applicable to Major
Generation Resource acquisitions. Major Generation Resources are classified as either
renewable or non-renewable. Renewable generation resources include (but are not
limited to) wind, solar, and hydro, with a duration of greater than 5 years and a
reasonably estimated capacity that exceeds 100 average megawatts. Non-renewable
generation resources are all other generation technologies with a duration greater than
five (5) years and a nameplate capacity that exceeds 100 megawatts.
2. Alternative Resource Acquisition Process. Idaho Power may seek pre-
approval by the Commission of an acquisition process for a Major Generation Resource
that would not include an RFP or would include a modified RFP that did not include all
of the steps described in the RFP guidelines set out herein. Such a pre-approval order
could address situations such as:
(a) Acquisition of a Major Generation Resource in an emergency or
when there is a time-limited resource opportunity of unique value to customers.
(b) An accepted IRP provides for an alternative acquisition method for
a Major Generation Resource.
(c) A recent RFP issued for the same type and size of resource,
produced no qualified proposals.
If the Commission approves an alternative resource acquisition process, Idaho
Power wil be entitled to the same presumption, as described in A above, that the
resource acquisition process it used was fair, reasonable, and suffcient.
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3. Comoanv Ownershio Ootions and Affliate Bidding in RFPs. Idaho Power
may include a self-build resource project as a bid in an RFP and may allow its affilates
to submit RFP bids. If an RFP includes a Company self-build bid or a bid from a
Company affilate, Idaho Power must take reasonable precautions to ensure that the
self-build bid and affilate bids are evaluated in an impartial manner. The precautions
the Company wil take to obtain an impartial evaluation wil be addressed in the draft
RFP review process described in Section 4. Idaho Power may also consider bids under
which a bidder proposes to build a resource and subsequently transfer ownership of the
resource to the Company. If the Company intends to exclude such build-and-transfer
bids, then it must explicitly disclose that exclusion as a part of the RFP workshop and
comment process described in Section 4.
4. RFP Design. Idaho Power wil prepare an initial draft RFP and post it on a
designated website. It wil provide notice of the availabilty of the initial draft RFP and
instructions as to where potential bidders and others can obtain a copy of the draft RFP.
Notice wil be provided bye-mail and, upon request, by first class mail, sent to all parties
in the Company's most recent general rate case, RFP, and IRP dockets, and to any
other person that has notified the Company of its interest in receiving notices of RFPs.
The electronic notice wil contain a link to the location of the draft RFP on the
Company's designated website. The draft RFP wil set forth any minimum bidder
requirements for credit and capabilty and describe the proposed bid evaluation process
and scoring criteria. Idaho Power may set a minimum resource size, and PURPA
qualifying facilties larger than 10 megawatts wil be allowed to participate. The draft
RFP wil also include standard form contracts.
Within thirty (30) days of the date of the transmittal of the notice of the availabilty
of the initial draft RFP, Idaho Power wil conduct a bidder and stakeholder workshop on
the design of the draft RFP. The Company wil send notice of the workshop to the same
parties that received notice of the initial draft RFP. Additional workshops may be
scheduled by the participants. Not later than thirty (30) days after the date of the last
workshop, Idaho Power wil prepare a final draft RFP document and submit it to all of
the participants in the workshop(s). Workshop participants wil then have fourteen (14)
days to submit written comments to Idaho Power on the final draft RFP. Following
receipt of the final comments, Idaho Power wil submit the final RFP to participants. The
time periods set out in this section may be extended by Idaho Power.
5. Commission Review of RFPs. Within fourteen (14) days of the distribution
date of the final RFP, any potential bidder or any party that participated in the
workshops to design the RFP may file a written request with the Commission (copy to
Idaho Power) asking that the Commission review and approve the final RFP prior to its
issuance and/or that the Commission appoint an independent evaluator ("IE") to
participate in and evaluate the bidding process. A party requesting that the Commission
review and approve the RFP and/or appoint an IE, is hereinafter referred to as a
Requesting Party. In its request, a Requesting Party wil specifically identify those
portions of the RFP that it seeks to have modified and explain why it believes the
modifications are needed. At the time it makes its request, a Requesting Party wil post
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a deposit with the Company in the amount of Twenty-five Thousand Dollars
($25,000.00). If more than one Part is a Requesting Party, a single deposit wil be
prorated among the Requesting Parties.
The Commission wil use its reasonable best efforts to complete the requested
review of the RFP within sixty (60) days. The Commission wil decide the procedure it
wil use to process the request (e.g., written comments or oral argument). If the
Commission concurs that the RFP is materially deficient in the areas identified by the
Requesting Party, and must be changed, the Commission wil issue its order modifying
the terms of the RFP and ordering Idaho Power to return the Twenty-five Thousand
Dollar ($25,000.00) deposit to the Requesting Party(ies).
If the Commission does not agree that the changes to the RFP identified by the
Requesting Party(ies) are sufficiently material to justify a change to the RFP document,
the Commission may direct the Company to apply all or a portion of the Twenty-five
Thousand Dollar ($25,000.00) deposit as a credit to revenues in a subsequent Idaho
Power revenue requirement proceeding.
If the Commission agrees that appointment of an IE is appropriate, the
Requesting Party(ies) wil pay the costs of the IE unless the Commission finds that a
different cost-sharing arrangement is appropriate. The IE wil be selected by the
Commission and wil report to the Commission Staff.
6. Bid Scoring and Evaluation Criteria. Scores assigned to a Company self-
build resource or a bid from a Company affiliate must be determined using the same bid
scoring and evaluation criteria that wil be used to score all other bids. The bidding
criteria wil require that each generation resource include an estimate of transmission
interconnection and system upgrade costs as well as all other information the Company
deems necessary tp allow it to effciently score the bids. Unless otherwise stated in the
Company's RFP, the transmission interconnection cost estimate must be obtained
through the Company's Generation Interconnection procedures as approved by the
FERC and through a Designated Network Resource request ("DNR") made by Idaho
Power on the Company's OASIS. Bidders wil advance any study costs Idaho Power
incurs to obtain the DNR. If during the course of the RFP process, Idaho Power
concludes that bidders should be allowed to update their bids, all bids, including the
Company's self-build and affliate bids may be updated.
In assessing non-price scores, the same resource characteristics contained in
the Company's accepted IRP action plan (e.g., dispatch flexibilty, resource term,
portolio diversity, etc.) wil be assessed as well as conformance to the standard form
contracts included in the RFP. Idaho Power may identify other pertinent non-price
attributes such as environmental issues , bidder experience, credit and financing
capability, and community acceptance to be scored in the evaluation. The RFP wil
include an explanation of how the Company intends to assess and quantify non-price
attributes.
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Unless another methodology is specified in the RFP, price scores wil be based
on the results of modeling the net present value of the revenue requirements of each of
the proposed bids.
7. Confidential Treatment of Bid and Score Information. Bidding information,
including the Company's cost support for its self-build resource, as well as detailed bid
scoring and evaluation results wil be confidential information and only made available
under protective orders and confidentiality agreements that limit use of the bidding
information to Certificate of Public Convenience and Necessity ("CPCN") or power
purchase agreement approval proceedings before the Commission.
8. Commission Staff Participation. The Commission Staff is authorized and
encouraged to actively consult and participate in all aspects of the competitive
acquisition process. This includes, but is not limited to, development of the initial and
final RFP documents and all bid evaluations.
9. Compliance with Resource Acquisition Guidelines. If the Company
complies with the RFP guidelines or receives a Commission order in accordance with
Section 2, such compliance will create a presumption that the resource acquisition
process was conducted fairly and reasonably and parties are precluded from raising
questions regarding the fairness, reasonableness, or sufficiency of the resource
acquisition process in any subsequent CPCN, or power purchase agreement approval
proceeding or subsequent revenue requirement recovery proceeding. This does not
mean that the Commission is restricted in its ability to assess the prudency of the cost
of resources acquired through the resource acquisition process, but it would preclude
parties from raising the fairness, reasonableness, or adequacy of the resource
acquisition process as a grounds for rejecting a CPCN or a power purchase agreement
application or for disallowing costs of a resource acquired through the resource
acquisition process in a subsequent revenue requirement proceeding.
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 10th day of February 2010 I served a true and
correct copy of IDAHO POWER COMPANY'S PROPOSED OUTLINE OF COMPETITIVE
ACQUISITION GUIDELINES upon the following named parties by the method indicated
below, and addressed to the following:
Commission Staff
Scott D. Woodbury
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
~Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
_ Email scott.woodburycæpuc.idaho.gov
(W~
Barton L. Kline
CERTI FICATE OF SERVICE