20140527reconsideration_order_no_33042.pdf

Office of the Secretary
Service Date
May 27,2014
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
CO1PANY’S APPLICATION FOR )CASE NO.IPC-E-13-21
APPROVAL OF ITS CAPACITY )
DEFICIENCY PERIOD TO BE UTILIZED )
IN THE COMPANY’S SAR )
METHODOLOGY.)ORDER NO.33042
__________________________________________________________________________
)
in Order No.32697,the Commission directed a case be initiated outside of each
utility’s integrated Resource Plan (1RP)filing for the establishment of the capacity deficiency
period to be utilized in the utility’s SAR methodology.Idaho Power filed its 2013 IRP with the
Commission on June 28,2013.On November 4,2013,idaho Power filed an Application for
approval of the capacity deficiency period to be utilized in the SAR avoided cost methodology.
Idaho Power reported that its first deficit occurs in July 2021.
On April 8,2014,the Commission issued Order No.33016 approving July 2013 as
Idaho Power Company’s first capacity deficit to be utilized in the Company’s SAR methodology.
On April 29,2014,Idaho Power filed a Petition for Reconsideration pursuant to Idaho Code §
61-626.The Company argues that the Commission’s determination of Idaho Power’s first
capacity deficit year is arbitrary,capricious and not in conformity with the facts or applicable
law.
By this Order,we grant reconsideration as more fully set out below.
BACKGROUND
The Application
Idaho Power filed its 2013 IRP with the Commission on June 28,2013.Idaho
Power’s 2013 IRP identifies the first peak-hour deficit occurring in July 2016.On October 15,
2013,idaho Power filed updated components of the incremental cost IRP avoided cost
methodology consisting of an updated load forecast,updated natural gas forecast,and updated
list of new and terminated PURPA contracts and long-term power purchase agreements.
Applying the updated load and contract information with the 2013 IRP peak-hour deficits results
in a first deficit for Idaho Power in July 2013.
ORDER NO.33042 1
On October 2,2013,Idaho Power filed a settlement agreement regarding the
continuation of its demand response programs.The Company maintains that updating its peak-
hour deficits with up to 440 MW of capacity from the suspension of demand response programs
results in the peak-hour deficits first occurring in July of 2021.Consequently,Idaho Power
requests that the Commission approve July 2021 as the capacity deficiency period to be utilized
in its SAR avoided cost methodology.
Final Order No.33016
The Commission noted that Idaho Power’s 2013 Integrated Resource Plan identifies
that the Company’s first peak-hour deficit occurs in July 2016.Updates to the IRP-identified
first peak-hour deficit based on load forecast,natural gas forecast,new and terminated PURPA
contracts and long-term power purchase agreements results in a first deficit occurring in July
2013.The Company further proposed to include 440 MW of demand response which would
delay Idaho Power’s first deficit until July 2021.The Idaho Irrigation Pumpers Association
supported Idaho Power’s proposal.Staff supported the inclusion of only 170 MW of demand
response —which would result in a first deficit year of 2016.
After a thorough review of the evidence and arguments of the parties,the
Commission determined that,for purposes of use within the SAR methodology,Idaho Power’s
first capacity deficit occurred in July 2013.The Commission declined to include demand
response in a determination of capacity deficiency because of recent changes in the Company’s
demand response programs that are likely to have an impact on program participation.The
Commission stated “we decline to arbitrarily choose a number to attach to demand response for
purposes of calculations within the SAR methodology absent evidence of the restructured
programs’success.”Order No.33016 at 5.
ISSUES ON RECONSIDERATION
Legal Standards
Reconsideration provides an opportunity for a party to bring to the Commission’s
attention any question previously determined and thereby affords the Commission with an
opportunity to rectify any mistake or omission,Washington Waler Power Co.v.Kootenai
Environmental Alliance,99 Idaho 875,879,591 P.2d 122,126 (1979).Consistent with the
purpose of reconsideration,the Commission’s Procedural Rules require that petitions for
reconsideration “set forth specifically the ground or grounds why the petitioner contends that the
ORDER NO.33042 2
order or any issue decided in the order is unreasonable,unlawful,erroneous or not in conformity
with the law.”Rule 331,01,IDAPA 31.01.01.331.01.Rule 331 further requires that the
petitioner provide a “statement of the nature and quantity of evidence or argument the petitioner
will offer if reconsideration is granted.”Id.
The Commission may grant reconsideration by reviewing the existing record,by
written briefs,or by evidentiary hearing.IDAPA 31.01.01.332.If reconsideration is granted,the
record must be finally submitted within 13 weeks after the deadline for filing petitions for
reconsideration.Idaho Code §61-626(2).The Commission must issue its order upon
reconsideration within twenty-eight (28)days after the matter is finally submitted for
reconsideration.Id.
Idaho Power’s Petition
Idaho Power argues that the Commission determination regarding the Company’s
capacity deficiency to be used in the SAR methodology is arbitrary,capricious,unreasonable,
unlawful,erroneous,and not in conformity with the facts and/or applicable law.Petition at 1.
The Company maintains that utilization of the Commission’s capacity deficiency would result in
“avoided cost projections,locked in for up to 20 years,that exceed the Company’s avoided costs
and are harmful to Idaho Power’s customers.”Id.Idaho Power asserts that the Commission’s
findings are not consistent with the requirements of the demand response settlement agreement,
not consistent with the portfolios and analysis contained in the 2013 IRP,and not consistent with
actual demand response participation levels established for 2014.
Idaho Power argues that because it is required to accept up to 440 MW of demand
response capacity from program participants,440 MW should reasonably be included to offset
the Company’s capacity deficiency determination.The Company further maintains that the
Commission “need not speculate as to participation in demand response.”Id.at 7.The
Company now reports that it has over 400 MW of demand response subscriptions for the 2014
season.
Idaho Power argues that ignoring the past proven capabilities of the Company’s
demand response programs would be inappropriate.“Based upon the additional evidence that
over 400 MW of DR has subscribed for the 2014 season,the IRP’s reliance upon meeting
various capacity deficits through 2020 with up to 400 MW of DR continues to be reasonable and
well founded.”Id.at 12.Idaho Power states that including 400 MW of demand response in a
ORDER NO.33042 3
determination of capacity deficiency for purposes of the SAR methodology results in an
identified capacity deficiency occurring in July 2021.
FINDINGS AND CONCLUSIONS
The Idaho Public Utilities Commission has jurisdiction over Idaho Power Company,
an electric utility,and the issues raised in this matter pursuant to the authority and power granted
it under Title 61 of the Idaho Code and the Public Utility Regulatory Policies Act of 1978
(PURPA).Specifically,pursuant to Idaho Code §61-626,the Commission has the authority to
reconsider its prior Orders.The Commission further has authority under PURPA and the
implementing regulations of the Federal Energy Regulatory Commission (FERC)to set avoided
costs,to order electric utilities to enter into fixed-term obligations for the purchase of energy
from qualified facilities (QFs)and to implement FERC rules.
After examining Idaho Power’s Petition,we find that reconsideration is appropriate
based on the new facts presented by the Company.Pursuant to our authority granted by statute,
we stay the effectiveness of Order No.33016 until such time as reconsideration of this matter is
complete.
We find that the issue of whether to include demand response in a determination of
Idaho Power’s capacity deficiency to be utilized within the SAR methodology can be adequately
addressed through written submissions.Consequently,we direct interested persons or parties to
submit written comments no later than Tuesday,June 24,2014.Written comments
concerning Idaho Power’s Petition may be mailed to the Commission and Idaho Power at the
addresses reflected below:
Commission Secretary Donovan Walker
Idaho Public Utilities Commission Idaho Power Company
P0 Box 83720 P0 Box 70
Boise,ID 83720-0074 Boise,ID 83707-0070
E—mail I
Street Address for Express Mail:
472 W.Washington Street
Boise,ID 83702-59 18
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
ORDER NO.33042 4
Commission’s home page located at Click the “Case Comment or Question
Form”under the “Consumers”tab,and complete the comment form using the case number as it
appears on the front of this document.These comments must also he sent to Idaho Power at the
e-mail addresses listed above.
Reply comments must be submitted no later than Tuesday,July 8,2014.
ORDER
IT IS HEREBY ORDERED that Idaho Power’s Petition for Reconsideration is
granted,as more fully described herein.
IT IS FURTHER ORDERED that interested persons or parties submit written
comments no later than Tuesday,June 24,2014.
IT IS FURTHER ORDERED that reply comments be filed flO later than Tuesday,
July 8,2014.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of May 2014.
PAUL KJELLANDER,PRESIDENT
MACK A.RIDFORD,COMMISSIONER
jIs
MARSHA H.SMITH,COMMISSIONER
ATTEST:
—-‘4 AJ
Jean D Jewell
Commission Secretary
O:IPC-E-13-2 lks4
ORDER NO.33042 5