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Home My WebLink About20071026Joint Reply in Support of Motion.pdfWILLIAM M. EDDIE ADVOCATES FOR THE WEST 610 SW Alder Street, Suite 910 Portland , OR 97205 Tel: 503-542-5245 Fax: 503-225-0276 bedd ie~advocateswest. org Attorney for Renewable Northwest Project and NW Energy Coalition BARTON L. KLINE , ISB No. 1526 LISA D. NORDSTROM , ISB No. 5733 IDAHO POWER COMPANY 1221 West Idaho Street O. Box 70 Boise , 1083707 Tel: 208-388-2682 Fax: 208-338-6936 bkline~idahopower.com In ordstrom ~id ahopower. com Attorneys for Idaho Power Company ~(ECE 2DD! OCT 25 tJ! iO: 40 iDf~r"iO PUE;LIC UTRITIES CO!\IMISSHY BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF IDAHO POWER COMPANY'S PETITION TO INCREASE THE PUBLISHED RATE ELIGIBILITY CAP FOR WIND POWERED SMALL POWER PRODUCTION FACILITIES; and TO ELIMINATE THE 90%/110% PERFORMANCE BAND FOR WIND POWERED SMALL POWER PRODUCTION FACILITIES ) CASE NO. IPC-07- JOINT REPLY IN SUPPORT OF MOTION TO APPROVE SETTLEMENT STIPULATION Renewable Northwest Project and Northwest Energy Coalition ("Renewable Coalition ) and. Idaho Power Company ("Idaho Power" or the JOINT REPLY ON SETTLEMENT STIPULATION -- Company ) hereinafter Party or collectively "Parties , hereby reply in support of the Joint Motion to Approve Settlement Stipulation (filed October 2, 2007) Motion Exergy Development Group, LLC filed an Answer to the Motion requesting the Commission deny the Motion and set this matter for hearing. Exergy s primary argument against the Settlement Stipulation focuses on the policy of allowing the inclusion of "known and measurable" changes to historic test year data for setting retail rates. This is not a case involving the setting of customer rates for electric service.This is a PURPA case in which the Commission is being asked to adjust avoided cost rates to recognize the additional cost of integrating intermittent wind resources. Setting avoided costs inherently requires a projection of estimated costs. Under the Commission s surrogate avoided resource ("SAR") method for setting avoided costs, the Commission has projected the costs of owning and operating a combined cycle combustion turbine over a twenty-five (25) year period. At the time the Commission established the costs of the SAR , very few of the inputs were "known and measurable." Using projected data to set avoided costs is consistent with the legal requirements of PURPA. FERC recognized that avoided costs would be set based on estimates, not "known and measurable data.In its regulations FERC stated "In the case in which the rates for 1 Exergy also makes policy recommendations to the Commission, including: "New wind power purchase agreements should be required to have a clause allowing the imposition of a fair, just and reasonable wind integration rate that varies with actual integration costs." The Parties disagree that such an adjustment is appropriate. Such terms would likely harm the ability of wind QF to obtain project financing, and would impose unnecessary administrative burdens on utilities. JOINT REPLY ON SETTLEMENT STIPULATION -- 2 purchases are based upon estimates of avoided costs over the specific term of the contract or other legally enforceable obligation , the rates for such purchases do not violate this sub-part if the rates for such purchases differ from avoided costs at the time of delivery." (18 CFR S292.304(b)(5)). It is within the very nature of the exercise that the Commission , in setting published prices to approximate the avoided cost of power over a 20-year contract term , will be imperfect. After more experience and understanding is gained , the wind integration cost reflected in the Settlement Stipulation will likely be proven inaccurate to some unknown degree. The Parties acknowledge that fact, but submit to the Commission that the integration costs reflected in the Settlement Stipulation are within the range of reasonable estimated wind integration costs based on current conditions and information. The record before the Commission is more than adequate to support the Settlement Stipulation. The record before the Commission includes: (1) Idahp Power s Application , including its wind integration study; (2) discussion in the Joint Motion to Approve Settlement Stipulation; (3) the Direct Testimony of Ken Dragoon and attachments thereto (including Idaho Power response to production requests), which may be treated as written comments in this case; (4) the comments of Commission Staff filed on October 5 , 2007; and (5) Exergy comments filed on October 5 2007. Exergy is the lone objecting party.The Settlement has the express support (either through signature or through support in filed comments) of the regulated utilities, the Renewable Coalition, one wind development firm (Idaho JOINT REPLY ON SETTLEMENT STIPULATION -- 3 Windfarms, LLC), and Commission Staff. The remaining eight (8) parties in this case (excluding Exergy) -- all of whom can be fairly described as renewable energy developers or proponents of renewable energy -- have not stated to the Commission any opposition to the Settlement Stipulation. Conclusion The Settlement Stipulation is a just, fair, and reasonable resolution of the core disputed issues in this case.The Parties respectfully request the Commission continue to handle this case under Modified Procedure, and grant the Joint Motion to Approve Settlement Stipulation. Respectfully submitted this 25th day of October 2007. RENEWABLE NORTHWEST PROJECT AND NW ENERGY COALITION WILLIAM M. EDDIE JOINT REPLY ON SETTLEMENT STIPULATION -- 4 ~; ;- Respectfully submitted this day of October, 2007. IDAHO POWER COMPANY ~~& Attomey JOINT REPLY ON SETTLEMENT STIPULATION -- 5 CERTIFICATE OF SERVICE I hereby certify that on this 25th day of October 2007, true and correct copies of the foregoing JOINT REPLY IN SUPPORT OF SETTLEMENT STIPULATION were delivered to the following persons via overnight delivery (for the Commission) and U.S. Mail for all other recipients. Electronic copie~ also were provided on this date to all parties of record. Jean Jewell (original and 7 copies) Idaho Public Utilities Commission 472 W. Washington St. Boise , 1083702 Glenn Ikemoto Idaho Windfarms, LLC 672 Blair Avenue Piedmont, CA 94611 Scott Woodbury Deputy Attorney General Idaho Public Utilities Commission 472 W. Washington St. Boise, 10 83702 Dean J. Miller, Esq. McDevitt & Miller, LLP PO Box 2564 Boise, 1083701 Peter Richardson Richardson & O'Leary 515 N. 2ih St. Boise , 1083702 Don Reading 6070 Hill Road Boise, 1083703 Ronald K. Arrington Associate Chief Counsel John Deere Renewables, LLC 6400 NW 86th Street PO Box 6600 Johnston, IA 50131 Dean Brockbank Rocky Mountain Power 201 S. Main Street, Suite 2300 Salt Lake City, UT 84111 R. Blair Strong Paine Hamblen , LLP 717 W. Sprague, Suite 1200 Spokane, W A 99220 Brian Dickman Rocky Mountain Power 201 S. Main Street, Suite 2300 Salt Lake City, UT 84111 Michael G. Andrea Staff Attorney Avista Corporation PO Box 3727 Spokane, WA 99220-3727 Rich Rayhill Ridgeline Energy, LLC 720 W. Idaho Street, Suite 39 Boise, 10 83702 Ken Miller Snake River Alliance PO Box 1731 Boise, 1083701 Robert M. Ellis, Esq. 4 Nickerson , Suite 301 Seattle , W A 98109 Gerald Fleischman 11535 W. Hazeldale Ct. Boise, 1083713 JOINT REPLY ON SETTLEMENT STIPULATION -- 6 Brian D. Jackson Renaissance Engineering & Design 2792 Desert Wind Rd. Oasis, 1083647-5020 M. J. Humphries Blue Ribbon Energy, LLC 2630 Central Ave. Idaho Falls, 1083406 Gary Seifert Kurt Myers INL Biofuels & Renewable Energy Technologies PO Box 1625 , MS 3810 Idaho Falls, 1083415-3810 William Eddie JOINT REPLY ON SETTLEMENT STIPULATION -- 7