20131231notice_of_application_order_no_32961.pdf

Office of the Secretary
Service Date
December 31,2013
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )CASE NO.IPC-E-13-22
COMPANY’S APPLICATION TO UPDATE )
ITS WIND INTEGRATION RATES AND )NOTICE OF APPLICATION
CHARGES.)
)NOTICE OF
)INTERVENTION DEADLINE
)
________________________________
)ORDER NO.32961
On November 29,2013,Idaho Power Company filed an Application with the
Commission seeking to update its wind integration rates and charges.The Company’s
Application includes a 2013 Wind Integration Study Report as well as the supporting testimony
of Philip DeVol and Michael J.Youngblood.Idaho Power requests that its Application be
processed by Modified Procedure.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that Idaho Power reports rapid growth in wind
generation over the past several years.Idaho Power maintains that it currently manages a total of
678 megawatts (MW)of wind generation capacity on its system —577 MW of capacity are
provided by Public Utility Regulatory Policies Act (PURPA)projects and an additional 101 MW
of wind generation capacity is provided by a non-PURPA project (Elkhorn Valley Wind Farm).
Idaho Power states that 505 MW of its total wind generation capacity has been added to the
Company’s system during 2010,2011,and 2012.
YOU ARE FURTHER NOTIFIED that Idaho Power’s Application maintains that,
due to the variable and intermittent nature of wind generation,the Company must modify its
system operations to successfully integrate wind projects without impacting system reliability.
Idaho Power explains that it must provide operating reserves from resources that are capable of
increasing or decreasing dispatchable generation on short notice to offset changes in non
dispatchable wind generation.The effect of having to hold operating reserves on dispatchable
resources is that the use of those resources is restricted and they cannot be economically
dispatched to their fullest capability.Idaho Power states that this results in higher power supply
costs that are subsequently passed on to customers.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.32961
YOU ARE FURTHER NOTIFIED that Idaho Power asserts that its capability to
integrate wind generation is nearing its limit.The Company maintains that,even at the current
level of wind generation capacity penetration,dispatchable thermal and hydro generators are not
always capable of providing the balancing reserves necessary to integrate wind generation.
Idaho Power states that this situation is expected to worsen as wind penetration levels increase,
particularly during periods of low customer demand.
YOU ARE FURTHER NOTIFIED that the Company states that it considers the cost
of integrating wind generation in its integrated resource planning when evaluating the costs of
utility and third-party generation resources.Idaho Power maintains that the costs associated with
wind integration are specific and unique for each individual electrical system based on the
amount of wind being integrated and the other types of resources that are used to provide the
necessary operating reserves.The Company explains that,in general tenus,the cost of
integrating wind generation increases as the amount of nameplate wind generation on the
electrical system increases.Idaho Power asserts that a failure to calculate and properly allocate
wind integration costs to wind generators when calculating avoided cost rates impermissibly
pushes those costs onto customers.
YOU ARE FURTHER NOTIFIED that the Company discusses three separate
methods by which wind integration costs could be accounted for in avoided cost rates.
1)Maintaining current allocation;
2)Current allocation with an integration tariff;and
3)Equitable allocation of costs.
The Company proposes two overall changes,which have been incorporated into each of the three
methods offered above,to address the collection of wind integration costs.Change one
abandons the use of percentage of avoided cost rate allocation and instead allocates a fixed
amount based upon penetration level.Change two decouples the wind integration charge from
the avoided cost rate contained in the power sales agreement and instead has wind integration
costs assessed as a stand-alone tariff charge.
YOU ARE FURTHER NOTIFIED that Idaho Power asserts that the costs associated
with wind integration are currently under-collected.The costs are assessed on a percentage basis
of various avoided cost rates.which results in an inequitable contribution of the various wind
QFs to the cost of integrating wind on the system.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDERNO.32961 2
YOU ARE FURTHER OTIFIED that the Company states the use of the percentage
of avoided cost rates really has no relation to actual costs of the additional reserves necessary to
integrate variable and intermittent resources on the system.Idaho Power further maintains that
setting the amount of wind integration charge for the entire duration of the power sales
agreement assures further under-collection of integration costs as those costs rise.The under-
collection from existing wind QFs results in an additional allocation to new wind QFs.
YOU ARE FURTHER NOTIFIED that Staff recommended the matter be processed
by Modified Procedure after providing interested persons and parties an opportunity to intervene.
YOU ARE FURTHER NOTIFIED that the Application and supporting workpapers,
testimonies and exhibits have been filed with the Commission and are available for public
inspection during regular business hours at the Commission offices.The Application and
testimonies are also available on the Commission’s web site at www.puc.idaho,gov.Click on the
“File Room”tab at the top of the page,scroll down to “Open Electric Cases,”and then click on
the case number as shown on the front of this document.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission’s jurisdiction under Title 61 of the Idaho Code.The Commission
may enter any final Order consistent with its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission’s Rules of Procedure,IDAPA 3 1.01.01.000 etseq.
NOTICE OF INTERVENTION DEADLINE
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in this matter
must file a Petition to Intervene with the Commission pursuant to this Commission’s Rules of
Procedure 72 and 73,IDAPA 31.01.01.072 and -.073.Persons intending to participate must file
a Petition to Intervene no later than twenty-one (21)days from the service date of this Order.
Persons desiring to present their views without parties’rights of participation and cross-
examination at hearing are not required to intervene and may present their comments without
prior notification to the Commission or the parties.
YOU ARE FURTHER NOTIFIED that the Commission Secretary shall issue a
Notice of Parties after the deadline for intervention has passed.The Notice of Parties shall
assign exhibit numbers to each party in this proceeding.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.32961 3
YOU ARE FURTHER NOTIFIED that once the Notice of Parties is issued,Staff will
convene an informal prehearing conference for the purpose of discussing a schedule to process
this case,the service of discovery,and other issues raised by the parties.
ORDER
IT IS HEREBY ORDERED that persons desiring to intervene in this matter shall file
a Petition to Intervene with the Commission no later than twenty-one (21)days from the service
date of this Order.
IT IS FURTHER ORDERED that the Commission Secretary issue a Notice of Parties
after the deadline for intervention has passed.
IT IS FURTHER ORDERED that,once the Notice of Parties is issued,Staff convene
an informal prehearing conference to discuss the processing of this case.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of December 2013.
PAUL KJELLANDER,PRESIDENT
ATTEST:
*1 I (/
I I
Jean D.Jewei
Commission Secretary
O:IPC-E-13-22ks
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.32961
MACK A.REDFORD,COMMISSIONER
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MARSHA H.SMITH,COMMISSIONER
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