20110825Response to IPC Motion.pdf

WILLIAMS. BRADBURY
A T TOR N E Y SAT L ~~E'l'L)'
2011 AUG 25 PH 2: 35
August 25,2011
Ms. Jean Jewell
Coinìssìon Secretay
Idaho Publìc Utìltìes Coinìssìon
472 W. Washìngton
Boìse,ID 83702
Re: IPC-E-11-10
Dear Ms. Jewell:
Please find enclosed an origìnal and seven copìes of Interconnect Solar Development,
LLC's Response to Idaho Power's Motìon ìn Opposìtìon to Grand Vìew Solar's Petìtìon to
Intervene and Grand Vìew's Answer Thereto for filìng ìn the above referenced case.
Than you for your assìstance ìn thìs matter. Please feel free to gìve me a call should
you have any questìons.
Sìncerely, "-R~0~
Ronald L. Wìlìams
RLW/jr
Enclosures
cc: Peter Rìchardson
1015 W. Hays Street - Boise, ID 83702
Phone: [phone] - Fax: [phone] - ww.wiamsbradbur.com
Ronald L. Wìlìams, ISB No. 3034
Wìlìams Bradbur, P.C.
1015 W. Hays St.
Boìse, ID 83702
Telephone: [phone]
Fax: [phone]
ron(£wìllamsbradbur .com
RECEIVED
2011 AUG 25 PH 2: 35
Attorneys for Interconnect Solar Development LLC
BEFORE THE IDAHO PUBLIC UTILITES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR A )
DETERMINATION REGARING THE FIRM )
ENERGY SALES AGREEMENT WITH )
INTERCONNECT SOLAR DEVELOPMENT, )
LLC, FOR THE SALE AN PURCHASE OF )ELECTRIC ENERGY. )
)
Case No. IPC-E-II-lO
RESPONSE TO IDAHO POWER'S
MOTION IN OPPOSITION TO
GRAD VIEW SOLAR'S
PETITION TO INTERVENE AND
GRAND VIEW'S ANSWER
THERETO
COMES NOW, Interconnect Solar Development, LLC, ("Interconnect Solar" or
"ISD") by and through ìts counsel of record, Wìlìams Bradbur, PC, and files tils
response to Idaho Power's Opposìtìon to Grand Vìew PV Solar Two's Petìtìon to
Intervene ìn the above reference matter and to Grand Vìew's Answer to Idaho Power's
Motìon ìn Opposìtìon to Grand Vìew's ìnterventìon.
1. Interconnect Solar prevìously fied an Answer to Staffs Motìon to extend
the schedule ìn thìs case whereìn ISD dìdnot object to Staffs need for addìtìonal tìme for
dìscovery, but dìd poìnt out the critìcal path the ISD solar project was on and how the
schedule also needed to recognìze the realìtìes of weather related constrctìon constraìnts.
To that end counsel for ISD has been ìnformed by Staff counsel that the schedule wìll
Response of Interconnect Solar Development Page 1
agaìn be adjusted to help accommodate lSD's project constrctìon needs, and ISD
apprecìates Staf s accommodatìon on thìs poìnt.
2. Staff s first and second set of dìscovery requests to Idaho Power ìn thìs
case suggested that Staff was consìdering recommendatìons to the Commìssìon that
Idaho Power's applìcatìon of the IRP avoìded cost methodology used to establìsh the ISD
contract rates should consìder alternatìve ìnput varìables. Specìfically, Staff confrmed ìt
ìs consìdering proposìng two specìfic avoìded cost rate methodology adjustments: (ì) the
use of capìtal costs of a sìmple cycle combustìon turbìne (SCCT) ìnstead of the capìta
costs of a combìned cycle combustìon tubìne (CCCT), and (ìì) ìmplementatìon of a solar
ìntegratìon charge or dìscount.
3. In response to thìs possìbìlty Interconnect Solar suggested that ìf Staff
were to pursue these polìcy related questìons ìn the context of tils case, ìt would draw the
attentìon of other qualìfyìng facìlìty developers ("QFs") as well as other utìltìes, and
such broadenìng of the ìssues and parìes would be potentìally fatal to a successful,
tìmely development of the ISD Murhy Flats solar project. That ìs now happenìng.
Alternatìvely, ISD suggested to Staff that the polìcy questìons ìt was raìsìng ìn tis case
were better raìsed ìn Case No. GNR-E-II-03. Thìs case was docketed on June 7, 2011,
but no progress or filìngs have been made and no schedule has been establìshed.
4. Interconnect Solar would renew ìts request that the IRP polìcy questìons
curently beìng raìsed by Staff ìn thìs case - as well as other equally ìmportt and
potentìally off-settìng (from an avoìded cost rate settìng stadpoìnt) ìssues - be
consìdered ìn Case No. GNR-E-II-0, on an expedìted basìs.
Response ofInterconnect Solar Development Page 2
5. The two IRP polìcy ìssues ìdentìfied by Staff ìn tis case (avoìded plant
capìtal costs and solar ìntegratìon costs) are two of the many and complex IRP
methodology questìons that requìres ìmpute of multìple parìes and the thoughtful
consìderatìon by the Commìssìon. For example, Staf ìn Case No. GNR-E-09-03
recommended establìshìng dìfferent avoìded costs rates for dìfferent QF technologìes.
Usìng tils alternatìve avoìded cost methodology, a solar QF would receìve a solar based
avoìded cost calculated usìng solar capìtal costs - ìnstead of gas-fired thermal generatìon
costs. i Such a resources based avoìded cost methodology would also render moot the
need to "guess" at what mìght be a "solar ìntegratìon" rate dìscount.2
6. It ìs also extremely unfaìr to ISD (and potentìally, to other parìes) for tis
contract approval case to ìmplement a first-ever solar ìntegratìon charge, based on a
"guess" by Idaho Power as to solar ìntegratìon costs. Idaho Power admìts ìt has no data
on what, ìf any, solar ìntegratìon costs ìt may experience, but acknowledges ìt ìntends to
study thìs ìssue ìn the near future. If that study confirms the potentìal for solar
ìntegratìon costs ìn a gas-fired SAR avoìded cost world - and holds up to scrutìny ìn the
context of a multì-pary proceedìng - then so bet ìt. But, as Staff noted ìn ìts comments ìn
Case No. GNR-E-09-03: "Establìshment ofwìnd ìntegratìon charges has ilstorically been
tìme consumìng and contentìous." 3
1 For comparison puroses, the 30 year levelized capacity costs for thee different generating resources are
as follows: (i) $5.00 /kW for gas fied SCCT, (ii) $14.00/k for gas fired CCCT, and (ii) $28.00/kW for
Solar - Flat Plate. See Idao Power Integrated Resource Plan, p. 84 of IRP Technical Appendix:
htt://www.idahopower.comlpdfs/ AboutU s/PlanningForFuture/ir/20 11/201 1 IRP AppendixCTechnicalApp
endix.pdf
2 As Staff
noted in its comments in Case No. GNR-E-09-03: "If a wind SAR is adopted, wind integration
charges would no longer have to be quantified." Staff Comments at p. 8.
htt://www .puc.idaho.gov/intemet/cases/elec/GNR/GNRE0903/staff200909 1 8COMMENTS.PDF3 Id
Response ofInterconnect Solar Development Page 3
7. As a final poìnt, ISD notes that yet another polìcy questìon - long-term
REC ownershìp - that was to be, or should be, consìdered ìn GNR-E-ll-03 ìs now a
contract dìspute ìssue ìn IPUC Case No. IPC-E-11-15. Thìs contrasts wìth the negotìated
resolutìon of the REC ownersilp ìssue as between ISD and Idaho Power where the
parìes reached a volunta agreement to share REC ownershìp over the lìfe of the
contract. ISD was able to agree to tis REC sharìng provìsìon for two reasons: (ì) Idaho
Power agreed to a 25 year contract lìfe, thus allowìng ISD to satìsfy financìng and debt
servìce requìrements over tils longer period of tìme whìle accountìng for the lost revenue
stream assocìated wìth half the potentìal REC revenues, and (ìì) ISD dìd not have the
luxur of tìme ìn lìtìgatìng thìs ìssue before the Commìssìon, as apparently does Grand
Vìew Solar. What appears perplexìng to ISD ìs Stafs focused concern on two potentìal
IRP methodology practìces that, ìf changed, would render the Murphy Flats solar project
financìally ìnfeasìble, whìle not acknowledgìng (at least at tis poìnt ìn tìme) the financìal
benefit to ratepayers of ISD allowìng Idaho Power to own half the RECs for the Murhy
Flats solar project for the next 25 years.
WHREFORE, Interconnect Soar requests the followìng:
1. That the Commìssìon establìsh an accelerated schedule ìn GNR-E-ll-03
to ìnvestìgate IRP methodology questìons beìng raìsed by Staff ìn tis casé, as well as
other resource specìfic avoìded cost polìcy questìons, such as should a solar avoìded cost
be based on an avoìded solar power plant,
4 (i) That SCCT capital costs may be a more appropriate surogate avoided capacity cost than CCCT
capital costs, and (ii) a solar integration discount may need to be applied to the IPC-ISD contract.
Response of Interconnect Solar Development Page 4
2. That the Coinìssìon affrm for the puroses of thìs case Idaho Power's
calculatìon of IRP based avoìded costs rates as practìced the Company sìnce 19955, for
QF projects greater than 10 aMW and, more recently, for wìnd and solar projects greater
than 100 kW, and
3. That the Commìssìon deny the Petìtìon of Grand Vìew Solar to ìntervene
for the reason that thìs contract approval case wìll not be the case to consìder and
ìmplement changes to the long-stadìng methodology used by Idaho Power to calculate
IRP based avoìded cost rates for QF projects greater than 10 aMW and, more recently,
for wìnd and solar projects greater than 100 kW.
f) fh
DATED: Thìs (/ r day of August, 2011.
.
/(MÁ tz.~
Ronald L. Wìlìams
Wìlìams Bradbur P.C.
Attorneys for Interconnect Solar
Development, LLC
5 See IPUC Order No. 25884, Januar 31, 1995, directing Idaho Power to establish SAR based avoided
costs based on the capital cost of a CCCT. See also implementation of that same avoided cost methodology
and CCCT capital cost assumptions for QF projects larger than 10 aMW in Case No. IPC-E-IO-24,
Rockland Wind.
Response of Interconnect Solar Development Page 5
CERTIFICATE OF SERVICE
I hereby certìfy that on thìs li day of August, 2011, a tre and correct copy of
the foregoìng was served by the method ìndìcated below, and addressed to the followìng:
Donovan E. Walker 0 US Maìl
Lead Counsel 0 Facsìmìle
Idaho Power Company 0 Hand Delìvery
POBox 70 0 Overnìght Maìl
Boìse,ID 83707-0070 ~E-Maìl Address
E-Maìl: dwalker(£ìdahopower.com
Randy C. Allpiln 0 US Maìl
Energy Contract Admìn.0 Facsìmìle
Idaho Power Company 0 Hand Delìvery
POBox 70 0 Overnìght Maìl
Boìse,ID 83707-0070 ~E-Maìl Address
E-Maìl: rallphìn(£ìdahopower.com
Krìstìne A. Sasser 0 US Maìl
Deputy Attorney General 0 Facsìmìle
Idaho Public Utilties Commission 0 Hand Delìvery
PO Box 83720 0 Overnìght Maìl
Boìse, ID 83720-0074 ~E-Maìl Address
E-Maìl: krs.sasser(£puc.ìdaho.gov
Randy Hemmer, Manager 0 US Maìl
Interconnect Solar Development, LLC 0 Facsìmìle
3777 Twìlìght Drive 0 Hand Delìvery
Boìse,ID 83703 0 Overnìght Maìl
E-Maìl: randyhemmer(£clearre.net ~E-Maìl Address
.~
!!tMll/~
Ronald L. Wìlìams
Response of Interconnect Solar Development Page 6