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Home My WebLink About20140609Answer and Response to ICL Petition to Clarify.pdfntrflfi11/r r.Itr-\-rL. I !'l I i 20lq JUH -g pll rrr rrg iDAHU i,LJi,,r..-, IJT I L ITI ES COMI..{ ISS I TJ}, 3E'ffi*. An IDACORP Company DONOVAN E. WALKER Lead Gounsel dwalker@idahopower.com June 9,2014 VIA HAND DELIVERY Jean D. Jewe!|, Secretary ldaho Public Utilities Commission 47 2 W est Washington Street Boise, ldaho 83702 Re: Case No. IPC-E-14-09 Suspend Obligation to Purchase Energy Generated by Solar-Powered Qualifying Facilities - ldaho Power Company's Answer and Response to the ldaho Conservation League's Petition to Clarify Dear Ms. Jewell: Enclosed for filing in the above matter please find an original and seven (7) copies of Idaho Power Company's Answer and Response to the ldaho Conservation League's Petition to Clarify.r;k E. Walker DEW:csb Enclosures 1221 W. ldaho 5t. (83702) P.O. Box 70 Boise, lD 83707 DONOVAN E. WALKER (lSB No. 5921) ldaho Power Company 1221 West Idaho Street (83702) P.O. Box 70 Boise, ldaho 83707 Telephone: (208) 388-5317 Facsimile: (208) 388-6936 dwalker@idahopower. com Attorney for ldaho Power Company IN THE MATTER OF IDAHO POWER COMPANY'S PETITION TO TEMPORARILY SUSPEND ITS PURPA OBLIGATION TO PURCHASE ENERGY GENERATED BY SOLAR-POWERED QUALTFYTNG FACTLTTTES (OF) REC * IV i' L; ?0lq JUll -9 Pt{ trr h9 u l Jr?ffsoc'li*i !E u, u,u BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-14-09 IDAHO POWER COMPANY'S ANSWER AND RESPONSE TO THE IDAHO CONSERVATION LEAGUE'S PETITION TO CLARIFY ldaho Power Company ("ldaho Powe/' or "Compo[y"), pursuant to RP 57, 331.02, and 331.05, hereby respectfully answers and responds to the ldaho Conservation League's ("lCL") Petition to Clarify Order No. 33043 of the Idaho Public Utilities Commission ("Commission"). Idaho Power objects to ICL's request to strike the sentence, "We believe the benefits and value of solar generation are reflected in the solar avoided cost rates and not part of consideration when developing the costs of integrating solar." Order No. 33043, p. 8. IDAHO POWER COMPANY'S ANSWER AND RESPONSE TO THE IDAHO CONSERVATION LEAGUE'S PETITION TO CLARIFY - 1 I. DISCUSSION The basis of ICL's Petition is its "concern" that the Commission's above-quoted sentence goes beyond the scope of the narrow issues before the Commission and that the statement does not comport with the description of the Integrated Resource Plan ("lRP') methodology directed for use in Order No.32976, Case No. GNR-E-11-03. ICL's claims are simply not accurate. A. The Gommission's Statement is not Bevond the Scope of the lssues. Several of the witnesses who submitted written comments and testimony at the May 21, 2014, public hearing made various statements alleging a lack of consideration of any benefits that solar generation may provide and/or that the benefits outweigh any costs of integration. The Commission's statement, "We believe the benefits and value of solar generation are reflected in the solar avoided cost rates and not part of consideration when developing the costs of integrating sola/' directly responds to, and rebuts, those statements that there was a lack of consideration to any potential benefits provided by solar. These statements and this issue, despite the Commission's direction regarding the scope of the proceedings, was raised and brought up by more than one commenter during the proceedings. The commenters opened the door to this issue, and the Commission made the correct and factual statement that the benefits and value of solar generation are reflected in the solar avoided cost rates provided to solar projects. B. The IRP Methodoloqv Develops Rates Based Upon the lndividual Generation Characteristics of the Solar Generator. ICL appears to be confusing the Surrogate Avoided Resource (SAR) published avoided cost rate methodology with the approved incrementa! cost IRP methodology IDAHO POWER COMPANY'S ANSWER AND RESPONSE TO THE IDAHO CONSERVATION LEAGUE'S PETITION TO CLARIFY -2 applicable to all solar projects over 100 kilowatts. Although ICL properly cites to some of the Commission's statements that the IRP methodology recognizes the individual generation characteristics of each project, ICL states, "The rates do not reflect the value of the QF; they reflect the value of a generic avoided resource." ICL Petition, p. 2. This is not true in the lRP methodology. The proposed project's actual hourly generation profile is utilized as part of the model to determine-on an hourly basis-the proper value to assign as an avoided cost rate to that project. The incremental cost IRP methodology assigns as an avoided cost the highest cost resource that is serving load on the Company's system, purchase or generation, for the same hour that the proposed project provides generation to the Company. This directly comports with the Public Utility Regulatory Policies Act of 1978's definition of avoided cost: the incremental cost to an electric utility of electric energy or capacity or both, which, but for the purchase from the qualifying facility, such utility would generate itself or purchase from another source. 16 U.S.C. $$ 824a-3(b), (d). A proposed solar project receives a much higher avoided cost price than most other resource types. The value of the solar generation is reflected with a higher avoided cost rate paid to the project. This is primarily based upon two factors: the fact that the solar generation is typically highest when the Company needs it the most during summer peak and heavy load hours and the fact that solar naturally does not provide generation during light load hours at night. The individual generation characteristics of the proposed solar project form the basis for the price it receives, based upon the value of the generation or purchases that correspond to the project's generation deliveries to the Company. The value of the solar generation is reflected in its much higher avoided cost price. IDAHO POWER COMPANY'S ANSWERAND RESPONSE TO THE IDAHO CONSERVATION LEAGUE'S PETITION TO CLARIFY.3 ICL's main rationale for wanting the identified sentence stricken is a motivation to argue about purported additional benefits regarding integration that solar may provide. This motivation and rationale is ironically the very thing that ICL objects to in the first place with regard to the Commission's statement. Nothing in the Commission's order, including the objected to sentence, precludes ICL from making such arguments in a future proceeding addressing the solar integration charge. r!. coNcLUSroN ICL's Petition to Clarify asking the Commission to strike the sentence, "We believe the benefits and value of solar generation are reflected in the solar avoided cost rates and not part of consideration when developing the costs of integrating sola/' should be denied. This sentence is not beyond the scope of the proceedings in that it directly addresses comments made on the record. Furthermore, the sentence accurately portrays the fact that the avoided cost pricing model assigns added value to a proposed solar project based upon the individual generation characteristics of that proposed project. ldaho Power respectfully requests that ICL's Petition be denied. Respectfully submitted this gth day of June 2014. IDAHO POWER COMPANY'S ANSWER AND RESPONSE TO THE IDAHO CONSERVATION LEAGUE'S PETITION TO CLARIFY - 4 AN E. WALKER Attorney for ldaho Power Company CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the gth day of June 20141 served a true and correct copy of IDAHO POWER COMPANY'S ANSWER AND RESPONSE TO THE IDAHO CONSERVATION LEAGUE'S PETITION TO CLARIFY upon the following named parties by the method indicated below, and addressed to the following: Commission Staff Donald L. Howell, ll Kristine A. Sasser Deputy Attomeys General ldaho Public Utilities Commission 472 W est Washington (83702) P.O. Box 83720 Boise, Idaho 8372O-OO7 4 ldaho Clean Energy Association lnc. Dean J. Miller McDEVITT & MILLER LLP 420 West Bannock Street (83702) P.O. Box 2564-83701 Boise, ldaho 83701 Board of Directors ldaho Clean Energy Association lnc. 710 North Sixth Street Boise, ldaho 83702 ldaho Conservation League Benjamin J. Otto ldaho Conservation League 710 North Sixth Street Boise, Idaho 83702 Alternate Power Development, Northwest, LLC Peter J. Richardson RICHARDSON ADAMS, PLLC 515 North 27th Street (83702) P.O. Box 7218 Boise, ldaho 83707 X Hand Delivered U.S. Mail Overnight Mail FAXX Email don.howell@puc.idaho.gov kris.sasser@puc. idaho.qov Hand Delivered X U.S. Mai! Overnight Mail FAXX Email ioe@mcdevitt-miller.com _Hand DeliveredX U.S. Mail _Overnight Mail _FAX Email Hand Delivered X U.S. Mail _Overnight Mail FAXX Email botto @ id a hoco n se rvatio n. o rq Hand Delivered X U.S. Mail Overnight Mail FAXX Email peter@richardsonadams.com IDAHO POWER COMPANY'S ANSWER AND RESPONSE TO THE IDAHO CONSERVATION LEAGUE'S PETITION TO CLARIFY - 5 Robert Paul 515 North 27th Street (83702) P.O. Box 7218 Boise, ldaho 83707 Snake River Alliance Ken Miller, CIean Energy Program Director Snake River Alliance P.O. Box 1731 Boise, ldaho 83701 Hand Delivered X U.S. Mai! Overnight Mail FAX Email robertapaul0S@qmail.com Hand Delivered X U.S. Mail Overnight Mail FAXX Email kmiller@snakeriveralliance.orq Bearry, LegalAssistant IDAHO POWER COMPANY'S ANSWER AND RESPONSE TO THE IDAHO CONSERVATION LEAGUE'S PETITION TO CLARIFY - 6