20101112Comments.pdf

SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BARNO. 1895
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UTILITIES
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR AUTHORITY )
TO MODIFY SPECIAL CONTRACT )
ELIGIBILITY BY REDUCING THE UPPER )
LIMIT OF POWER REQUIREMENTS FOR )LARGE LOAD CUSTOMERS. )
)
CASE NO. IPC-E-IO-23
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff ofthe Idaho Public Utilties Commission, by and through its
attorney of record, Scott Woodbur, Deputy Attorney General, and in response to the Notice of
Application, Notice of Modified Procedure and Notice ofComment/rotest Deadline issued on
September 23,2010 in Case No. IPC-E-IO-23, submits the following comments.
BACKGROUND - IDAHO POWER APPLICATION
On August 26,2010, Idaho Power Company (Idaho Power; Company) fied an
Application with the Idaho Public Utilties Commission (Commission) for an Order authorizing
reducing the upper limit for large power service under Schedule 19, agricultural irrigation service
under Schedule 24 and point of delivery service requirements in Rule C (Service and
Limitations) from 25,000 kW to 20,000 kW of aggregate load. Under the Company's proposal,
service at levels exceeding 20,000 kW wil require special contract arrangements. The Company
requests that the taiff modifications become effective on or before January 1, 2011.
STAFF COMMENTS 1 NOVEMBER 12,2010
Schedule 19, Large Power Service, is currently available and mandatory for customers
who register a meter demand of 1,000 kW or more per biling period for 3 or more biling
periods during the most recent 12 consecutive months, up to a maximum demand of25,000 kW.
Schedule 24, Agricultural Irrigation Service, is applicable to agricultural use customers operating
water pumping or water delivery systems used to irrigate agricultural crops or pasturage for loads
up to 25,000 kW. A customer is not eligible for Schedule 19 or Schedule 24 service if its
aggregate power requirement at one or more points of delivery on the same premises exceeds
25,000 kW. Point of Delivery Service requirements in Rule C state that a special contract is
required when an aggregate power requirement exceeds 25,000 kW.
The Company, with this Application, proposes to reduce the 25,000 kW eligibilty limit
to 20,000 kW for Schedules 19 and 24 and Rule C. Idaho Power has filed this request in
response to what it states is the continued high interest from potential large industrial load
customers to take service from Idaho Power, and an identified need to address responsible
planning and development on the par of the Company, which has a lack of capacity and other
constraints on its system. At a time when the abilty of Idaho Power's generation and
transmission system to serve new load is copstrained, the size and operating characteristics of
potential large loads, the Company contends, can be very expensive to serve. In recent years,
excess capacity has diminished to the point that new large loads will often drive the need to add
new generation and/or new transmission. By lowering the size limit, the Company states it can
address service to growing or new load within a special contract, allowing for specific cost-of-
service information as well as the unique operating characteristics of customers of this size to be
considered and captured within the terms of the contractual agreement. Special contracts, the
Company contends, can provide some protection to the Company's customers from unintended
system impacts that large loads may impose because of their size and their time, nature, and
pattern of use.
Idaho Power represents that the proposed change wil not affect any curent Schedule 19
or 24 customers. The Company reports that it has approximately one hundred ten (110)
Schedule 19, Large Power Service customers in its Idaho service territory. The Company also
reports that it currently has four special contract customers: (1) Micron Technology, Inc.; (2) the
United States Department of Energy's Idaho National Laboratory; (3) the JR Simplot Company;
and (4) Hoku Materials, Inc. These four customers range in size from 30 to 85 MWs ofload.
Idaho Power states it curently has approximately 75 potential new customers system-wide with
STAFF COMMENTS 2 NOVEMBER 12, 2010
loads greater than 1 MW and one with a potential load of 240 MW that have expressed interest in
obtaining service. A single customer with a load of about 60 MW appears likely to soon require
service.
The most recent special contract, Hoku Materials, Inc., approved by the Commission on
March 16,2009, by Order No. 30748 in Case No. IPC-E-08-21 was developed by Idaho Power,
it states, with several regulatory goals for large load service in mind. These goals are to: (1)
provide requested service consistent with system capabilty and the reliabilty needs of existing
customers; (2) provide options to the customer when the Company is unable to provide service
as requested; (3) mitigate the rate impact on. existing customers by developing a rate structure
that includes a marginal price component for an initial term of the service agreement; (4) require
upfront contributions to capital expenditures associated with facilities that specifically serve the
large load customer; and (5) provide a means to quantify known and measurable amounts of
additional load for Integrated Resource Planing. The Company's request in this case, it states,
better enables it to manage the impacts of potential new large loads on its system in satisfaction
of these goals.
STAFF ANALYSIS
As par of its review ofIdaho Power's fiing, Stafflooked at load requirements for special
contracts for A vista and Rocky Mountain Power who also provide service in Idaho under the
Commission's jurisdiction. A vista requires a Special Contract when a customer's load exceeds
25,000 kVa, which is 25,000 kW at 100% power factor. Rocky Mountain Power requires a
Special Contract when a customer's load exceeds 15,000 kW three times in a six month period.
Idaho Power Company's request to reduce the load level above which a special service contract
is required from 25,000 kW to 20,000 kW remains comparable to Special Contract service levels
approved for other Idaho electric utilties. Staff also believes that the Company's goals for the
treatment of new large loads as identified previously in these comments and explained in the
Company filing have merit. The Company's proposal wil not impact any existing Schedule 19,
Schedule 24 or Special Contract customers and is consistent with the Hoku Special Contract
previously approved by the Commission.
STAFF COMMENTS 3 NOVEMBER 12,2010
t
STAFF RECOMMENDATION
Staff recommends that the Company's request to reduce the minimum load requirement
for a special contract from 25,000kW to 20,000 kW be approved as fied. The Staff further
recommends that the changes become effective January 1, 2011.
Respectfully submitted this /;;~ay of November 2010.
Scott Woo our
Deputy Attorney General
,/
Technical Staff: Keith Hessing
i:umisc:comments!ipce I O.23swkh comments
STAFF COMMENTS 4 NOVEMBER 12,2010
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 12TH DAY OF NOVEMBER 2010,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. IPC-E-IO-23, BY MAILING A COpy THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
LISA D NORDSTROM
DONOV AN E WALKER
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: lnordstrom(iidahopower.com
dwalker(iidahopower .com
PETER J RICHARDSON
GREGORY MADAMS
RICHARDSON & O'LEARY PLLC
515 N 27TH ST
PO BOX 7218
BOISE ID 83702
E-MAIL: peter(irichardsonandoleary.com
greg(irichardsonandoleary.com
GREGORY W SAID
MICHAEL J YOUNGBLOOD
DARLENE NEMNICH
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: gsaid(iidahopower.com
myoungblood(iidahopower .com
dnemnich(iidahopower .com
DR. DON READING
6070 HILL ROAD
BOISE ID 83703
E-MAIL: dreading(imindspring.com
JJ~
SECRETAR
CERTIFICATE OF SERVICE