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Home My WebLink About20140514Allphin DI.pdfR*CIElVBS t0llr tttY 13 Plt lrt lr2 urnffieHml8sroN BEEORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF IDAHO POWER COMPANY'S PETITION TO TEMPORARILY SUSPEND ITS PURPA OBLIGATION TO PURCHASE ENERGY GENERATED BY SOLAR-POWERED QUALI FYING FACTLTTTES ('QF"). cAsE NO. rPC-E-14-09 IDAHO POWER COMPANY DIRECT TESTIMONY OF RANDY ALLPHIN 1 2 3 4 5 6 1 8 9 10 11 t2 13 L4 15 16 L1 1_8 1_9 20 21, 22 23 24 25 O. Pl-ease state your name and business address. A. My name is Randy Allphin. My busj-ness address is l22l West Idaho Street, Boise, Idaho 83702. O. By whom are you employed and in what capacity? A. I am employed by Idaho Power Company ("Idaho Power" or "Company") as Energy Contracts Coordinator Leader. 0.Please describe your educational background and work experience wj-th fdaho Power. A.I graduated in 7982 from Boise State Universj-ty with a Bachel-ors of Business Administration. In June 1982, I accepted a posj-tion as a Customer Service Specialist with fdaho Power. In 1-986, I accepted a position as an Operations Accountant in the Operatj-ons and Fuels Management accounting group. My specific responsibilities were accounting for and performing economic analyses of the Company's agreements with Qualifying Eacilj-ties ("QF"), as well as fuels accounting and thermal operations and maintenance accounting. In 1998, in addition to the responsibility of performing the accounting and economic analysis of QF agreements, I was also assigned the responsibility of administering all aspects of existing and new QF agreements as the Co- generatj-on and Small Power Production ("CSPP") Contract Administrator. In 2070, I was promoted to Senior Energy ALLPHIN, DI 1 Idaho Power Company 1 Contracts Administrator and was assi-gned two direct reports 2 to manage the large number of Idaho Power QE and other 3 renewable energy agreements. I have been j-nvolved with 4 accountj-ng, economic analysis, contract administration, and 5 contract negotiations of ldaho Power QF and renewable 6 energy agreements for approximately 26 years. In addition, 7 I was responsible for the initial implementation of Idaho I Power's Oregon Solar Photovoltaic (\\PV") Pilot Program and 9 currently am assigned supervisory oversight of the 10 administratj-on of that program. 1t_O. What is the purpose of your testimony in this 72 matter? 13 A. The purpose of my testimony is to provide a 14 summary of the current status of contracts, requests for 15 contracts, i-nquiries, pricing requests, etc., related to l-6 Public Utility Regulatory Policies Act of 1978 ("PURPA") L7 solar power purchase agreements/obligations with Idaho 1-8 Power. 79 O. Have you prepared any exhibits with your 20 testimony? 2L A. Yes. I have prepared Exhibit No. 1 to my 22 testimony that summarizes the information from my 23 testimony. 24 25 ALLPHIN, DI 2 Idaho Power Company 1 2 3 4 5 6 7 I 9 10 11 72 13 74 15 1,6 1.7 18 79 20 2t 22 23 24 25 proj ects Power? What is the current status of solar QF that have inquired about power sales to Idaho A. Idaho Power, ds of May L2, 2074, has 31 individual solar QF projects with a total nameplate rating of 501 megawatts (\\MW") attempting to get power purchase agreements and/or obligations pursuant to PURPA. Of this 501 MW, 15 projects for 341 MW are l-ocated withj-n Idaho with the remainingT 16 projects for 160 MW being in Oregon. Six of the Oregon projects (60 MW total) have fu1Iy executed power purchase agreements with Idaho Power. Currently, none of these contracts or potential contracts/obligati-ons incl-ude any reductions related to solar integration costs, and thus customers will pay more than the Company's avoj-ded cost for the energy from these sol-ar QF projects if contracts/obligatj-ons are obtained or incurred by these solar QFs. 0.How many QE projects does Idaho Power currently have under contract? A.As of May 13, 2074, Idaho Power has ]-1"7 PURPA of approximately 883contracts for a total- namepJ-ate rating MW. 0. What is the approximate cost,/obligation associated with the currentl-y exlsting 883 MW of PURPA contracts that Idaho Power has? ALLPHIN, DI 3 Idaho Power Company 1 A. As of April t, 2074, all currentl-y existing 2 contracted PURPA projects with fdaho Power have an 3 estimated cost of approximately $2.835 bilIion. 4 Q. Have you approxj-mated the cost/obli-gations of 5 the 501 MW of potential solar QF contracts/obligations to 6 Idaho Power and its customers? 1 A. Yes. At current avoided cost rates applicable I in each jurisdiction, and using the estimated generation 9 profil-es from the various proposed projects, this 501 MW 10 represents a cost of approximately $1,888,716,510 to Idaho 11 Power customers over the life of those contracts. The 12 proposed solar QF projects represent 2/3 of all of Idaho 13 Power's existing PURPA QF contract costs/obligations 74 j-ncurred to date. They also constitute an increase in the 15 total nameplate rating of Idaho Power's QF projects from 16 883 MW to nearly 1,400 MW. Idaho Power's minimum load on L1 its entire system for 2OL3 was 1,005 MW. 18 Although the sol-ar integratj-on study has not yet 19 identified a cost, assuming a cost equal to that of wind 20 integration at $6.50, the potential integration costs 2L associated with the 501 MW of sol-ar is approximateJ-y 22 $146,181,685. This suggests that customers might be 23 required to overpay developers by 8 percent. These numbers 24 are all reported on a cumul-ative as well as individual 25 project basis in my Exhibit No. 1. ALLPH]N, DI 4 Idaho Power Company O. Can you further describe the nature of the 501 2 MW of sol-ar QF projects that are proposed for Idaho Power's 3 system? A. Yes. Based upon my many years of experj-ence 5 administering the PURPA contracts and process at Idaho 6 Power, the 501 MW of solar QF projects are very real- and 7 imminent. Knowing many of the developers that are coming 8 forward with proposed projects, they are the type and kind 9 of developers that I consi-der to be serious developers, 10 with real- projects, and not just "tire-kj-ckers." 11 In Oregon, one developer has proposed a total of 16 12 different solar QF projects, all at 10 MW each in order to 13 obtain Oregon standard contract rates. Of these 160 MVi of 1,4 proposed projects in Oregon, Idaho Power has recently 15 executed six contracts at 10 MW of nameplate capacity each, L6 none of which contain solar integration costs. Ll In its Idaho jurisdiction, the Company has 341 MW of 18 serious inqui-ries from six developers representing 15 19 different solar QF projects. Idaho Power has provi-ded 20 indicative incremental cost Integrated Resource Plan 21- pricing to six separate sol-ar QF projects, consisting of 22 five 20 MW projects and one 40 MW project for a total of 23 140 MW. Four of these projects have requested and received 24 draft contracts from Idaho Power, and are in active 25 discussions/negotiations about contract terms and ALLPHIN, DI 5 ldaho Power Company 1 2 3 4 5 6 1 B 9 10 11 t2 13 L4 15 t6 71 1B L9 20 2t 22 23 24 25 conditions. One developer is seeking contracts for a 40 MW and two 20 MW solar QF projects to be l-ocated on land under the control of three large Idaho municipalities. The most recent inquiry is from a developer that over the years has proposed various QF projects and has enlisted the aid of a successful- wind developer in devefoping four 30 MW sol-ar projects and is seeking contracts/obligations with Idaho Power. Another developer is a large out-of-state wind developer that is now proposing a 20 MW solar QE project on the site of a formerly proposed wi-nd QF project. At least five other 20 MW each solar QF projects are represented by experienced Idaho lega1 counsel that has represented numerous QF projects of al-1 generation types over the course of many years. These projects, while the Petition was being drafted, took an outdated draft contract from a different sol-ar QE project, reproduced it five times, and signed the non-fj-na1, non-agreed to, and superseded document and delivered it to Idaho Power on May 12, 20L4. Along with its submission, these five QFs incl-uded a cover letter purporting to establ-ish 1ega11y enforceabl-e obligations by such actions. This confirms the immediacy of the situation. In reference to the QE projects mentioned above, dt approximately 3:00 p.m., Idaho Power sent e-maiI correspondence along with updated and superseding draft contracts contaj-ning a solar integration ALLPHIN, DI 6 Idaho Power Company 1 2 3 4 5 6 7 8 9 10 11 t2 13 L4 15 1,6 t7 18 19 20 2L 22 23 24 25 charge to the four solar QF projects who had prevj-ously received draft contracts. Just minutes later, dt approximately 3:05 p.m., ds mentioned above, Idaho Power took delivery of a dupllcated draft contract, duplicated from a previously provided contract for a different solar QE project, for five proposed 20 MW solar QF projects, signed by the QF purporting to be a 1egal1y enforceable obligation binding customers. O. Do you have any other indications of the i-mminent nature of these 501- MW of proposed solar QF proj ects ? A.Yes. Idaho Power has seen steady, but a rel-atively Iow vol-ume, of solar QE activity for a number of years. However, since the completion of the GNR-E-11-03, or Phase III of the comprehensive PURPA case at the Idaho Public Utilities Commission, the Company has seen increased interest in solar QF project development. Activity, J-nquiries, and communications from proposed sol-ar QE projects have recently increased substantially following Idaho Power's May 7, 2074, solar integrati-on public workshop. It is believed that all of the solar QF developers are well aware of the status and progress of ldaho Power's solar j-ntegration study-including the fact that the Company antici-pates results from the solar integration study in the near future, ds early as ALLPHIN, DI 7 Idaho Power Company 1 2 3 4 5 6 7 8 9 10 11 12 13 L4 15 16 77 18 19 20 27 22 23 24 25 next month in mid-June. The Company believes that al-I of these developers are actively seeking contracts/obligations with the Company prior to such time as the solar integration study is completed. o.Does this conclude your testimony? A. Yes. ALLPHIN, DI 8 Idaho Power Company 1 2 3 4( 6 1 8 9 10 11 72 13 l4 15 L6 L1 18 19 20 27 22 23 24 25 26 27 28 29 30 31 32 ATTESTATION OF TESTIMONY STATE OF County of IDAHO )\ ^^,/ DD. Ada ) I, Randy A11phin, having been duly sworn to testify truthfully, and based upon my personal knowledge, state the following: I am employed by Idaho Power Company as Energy Contracts Coordinator Leader in the Load Serving Operations Department and am competent to be a witness in this proceeding. I declare under penalty of perjury of the laws of the state of Idaho that the foregoing pre-filed testimony and exhibit are true and correct to the best of my information and belief. DATED this 13th day of May 20L4. SUBSCRIBED AND SWORN to before me Nlay 2014 . this 13th day of ALLPHIN, DI 9 Idaho Power Company otary Publii Residing at: My commi-ssion expire o BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION GASE NO. IPC-E-14-09 IDAHO POWER COMPANY ALLPHIN, DI TESTIMONY EXHIBIT NO. 1 ldaho Power Company Cogeneration and Small Power Production QF Solar Contracts As of May 12th, 2014 Subtotal 60.0 MW Draft Contracts and lndicative lncremental Cost IRP Avoided Cost pricing provided Proiect Name Executed Contracts 1 Open Range Solar Center, LLC 2 Vale Air Solar Center, LLC 3 Grove Solar Center, LLC 4 Hyline Solar Center, LLC 5 Railroad Solar Center, LLC 6 Thunderegg Solar Center, LLC 1 Price and Draft 1 2 Price and Draft 2 3 Price and Draft 3 4 Price and Draft 4 5 Price and Draft 5 6 Price and Draft 5 7 Price and Draft 7 1 lnquire 1 2 lnquire 2 3 lnquire 3 4 lnquire 4 5 lnquire 5 6 lnquire 6 7 lnquire 7 8 lnquire 8 9 lnquire 9 10 lnquire 10 11 lnquire 11 12 lnquire 12 13 lnquire 13 14 lnquire 14 15 lnquire 15 16 lnquire 16 Nameplate Rating State County 10.0 Mw oR 10.0 MW oR 10.0 MW OR 10.0 MW OR 10.0 Mw oR 10.0 MW OR 40.0 Mw 20.0 MW 20.0 MW 20.0 MW 20.0 Mw 20.0 MW 20.0 MW 20.0 Mw tD 20.0 MW rD ID ID ID ID ID ID OR OR OR OR OR OR OR OR OR OR Malhuer Malhuer Malhuer Malhuer Malhuer Malhuer 72/3r12076 12/3u2076 t2l3u2ot6 12131/2016 L2/3L/2Ot6 L2/3L/2016 72/3L/20L6 Est 12/3L/2OL6 Est 72/3L{2OL5 Est t2/3U2OLs Est t2137/20L5 Est 12/3L{2OLS EsI L2|3U2OLS Est Scheduled Operation Date Estimated total contract payment 537,8s6,s7s s37,8s6,s7s s37,8s6,s7s S37,8s6,s7s s37,8s6,s7s s37,8s6,s7s $227,139As? 57s7,667,248 s76,268,0s1 57r,216,s93 57L,276,s93 s71,2L6,593 57t,2t6,s93 s71,216,s93 Estimated total lntetration Cost, assuming $6.50 per MWh 52,737,477 52,737,477 52,737,477 52,73r,477 52,737,4L7 52,73L,477 $16,388,s02 512,72r,8OO s5,264,330 ss,618,730 Ss,618,730 ss,618,730 Ss,618,730 5s,618,730 ID ID ID ID ID ID ID Ada Bannock Elmore Elmore Elmore Elmore Elmore Jerome Owyhee subtotal 160.0 Mw lndicative lncremental Cost IRP Avoided Cost pricing orovided 1 Price Only 1 2 Price Only 2 Ssgo,otz,zu 547,079,780 r2/3L/20t6Est 576,48L,642 56,732,490 L2/3U2OL6 Est s71,130,9s7 ss,383,086 Subtotal 40.0 Mw Serious lnquires received, initial discussion and/or meetinss conducted Elmore Bingham Payette Gem Ada Washington Grant Grant Malhuer Malhuer Malhuer Malhuer Malhuer Malhuer Malhuer Malhuer s147,6L2,599 57L,2t6,s93 s1,196,8s4 sL18,243,248 5t18,243,248 5tt8,243,248 57t8,243,248 s37,8s6,s7s s37,8s6,s7s s37,8s6,s7s s37,8s6,s7s s37,8s6,s7s s37,8s6,s7s 537,8s6,s7s s37,8s6,s7s s37,8s6,s7s s37,8s6,s7s 511,s1s,s76 Ss,618,730 s100,334 S9,s41,149 59,s4L,749 S9,541,149 S9,s41,149 52,737,4t7 52,73t,4t7 s2,737,477 52,73r,477 52,737,4r7 52,737,417 52,737,4t7 52,737,477 52,73t,4L7 52,737,477 20.0 MW 1.0 MW 30.0 MW 30.0 MW 30.0 MW 30.0 MW 10.0 MW 10.0 Mw 10.0 Mw 10.0 Mw 10.0 MW 10.0 Mw 10.0 MW 10.0 Mw 10.0 MW 10.0 Mw Subtotal 241.0 MW ,o,", [ffi|L-J ldaho Total :t41.0 Mw Oregon Total 160.0 Mw s923,9s2,193 57t,L97,828 s1,283,011,302 56Os,7Os,2O7 $t02,479,O13 $43,702,672 Exhibit No. 1 Case No. IPC-E-14-09 R. Allphin, IPC Page 1 of 1 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the 13th day of May 2014 I served a true and correct copy of the DIRECT TESTIMONY OF MNDY ALLPHIN upon the following named parties by the method indicated below, and addressed to the following: Donald L. Howel!, ll Kristine A. Sasser Deputy Attorneys General ldaho Public Utilities Commission 472 W est Washington (83702) P.O. Box 83720 Boise, ldaho 83720-007 4 Peter J. Richardson RICHARDSON ADAMS, PLLC 515 North 27s Street Boise, Idaho 83702 Robert Paul 515 North 27s Street Boise, ldaho 83702 Mark VanGulick P.O. Box 7354 Boise, Idaho 83707 Hand Delivered U.S. Mail Overnight Mail FAX Email don. howell@puc. idaho.qov kris.sasser@puc. idaho.qov Hand Delivered U.S. Mail Overnight Mail FAXX Email peter@richardsonadams.com Hand Delivered U.S. Mail Overnight Mail FAX Emai! robertapaul8@qmail.com Hand Delivered U.S. Mail Overnight Mail FAX Email mvanqulick@sunerqvworld.com Bearry, Legal Assistant CERTIFICATE OF SERVICE