Loading...
HomeMy WebLinkAbout20140701Youngblood Direct.pdfRECE IVI N 'mlt JUL - | plt trr Sh uilLi?ru$o.BtfihiHs,o* BEFORE THE IDAHO PUBLIC UTTLITIES COMMISSION IN THE MATTER OF THE APPLICATION OF IDAHO POI,IIER COMPANY 10 IMPLEMENT SOLAR INTEGRATION RATES AND CHARGES. CASE NO.IPC-E-14-18 IDAHO POWER COMPANY DTRECT TESTIMONY OF MICHAEL .f. YOUNGBLOOD I 2 3 4 5 6 '7 I 9 10 11 L2 13 74 15 16 L7 18 t9 20 2L 22 23 24 25 a. A. o. A. business address is 7221 West Idaho Street, Boise, fdaho. O. By whom are you employed and in what capacity? A. I am employed by Idaho Power Company ("Idaho Power" or "Company") as the Manager of Regulatory Projects in the Regulatory Affairs Department. Please state your name and business address. My name is Michael J. Youngblood and my Please describe your educational background. In May of L977, T received a Bachelor of Science Degree in Mathematics and Computer Science from the University of Idaho. From 7994 through L996, I was a graduate student in the Executive MBA program of Colorado State University. Over the years, I have attended numerous industry conferences and trainj-ng sessions, including Edison Electric Institute's "El-ectric Rates Advanced Course. " O. Idaho Power. A. P1ease describe your work experience with I began my employment with ldaho Power in 7977. During my career, I have worked in several departments of the Company and subsidj-aries of IDACORP, including Systems Development, Demand PIanning, Strategic Planning, and IDACORP Solutions. Erom 1981 to 1988, I worked as a Rate Analyst in the Rates and Planning Department where I was responsible for the preparation of YOUNGBLOOD, Dr 1 Idaho Power Company 1 2 3 4 5 6 7 I 9 10 11 72 13 L4 15 1,6 77 18 T9 20 2t 22 23 24 25 electric rate design studies and bill frequency analyses. I was also responsible for the validation and analysis of the load research data used for cost-of-service allocations. From 1988 through 1,991, T worked in Demand Planning and was responsible for the load research and load forecasting functions of the Compdny, incJ-uding sample design, implementation, data retrieval, analysis, and reporting. I was responsible for the preparation of the fj-ve-year and twenty-year load forecasts used in revenue projections and resource plansr dS wel-l- as the presentation of these forecasts to the public and regulatory commissions. From 1997 through 1998, I worked in Strategic Planning. As a Strategic Planning Associate, I coordinated the complex efforts of acquirj-ng Prairie Power Cooperative, the first acquisition of its kind for the Company in 40 years. From L996 to 1998, ds a part of a Strategic Plannj-ng initiative, I helped develop and provide two-way communication between customers and energy providers using advanced computer technologies and tel-ecommunications. Erom 1998 to 2000, I was a General Manager of IDACORP Solutions, a subsidiary of IDACORP, reporting to the Vice President of Marketing. responsible for the direction I was directly YOUNGBLOOD, Dr 2 Idaho Power Company 1 and management of the Commercial and Industrial Business 2 Solutions division. 3 In 200L, T returned to the Regulatory Affairs 4 Department and worked on special projects related to 5 deregulation, the Company's Integrated Resource Plan 6 ("fRP"), and filings with both the Idaho Public Utilities 7 Commission (*IPUC" or "Commissj-on") and the Public Utility I Commission of Oregon. 9 In 2008, I was promoted to the position of Manager 10 of Rate Design for Idaho Power. In that position I was 11 responsible for the management of the rate design L2 strategies of the Company, as wel-I as the oversight of all 13 tarif f admi-nistration. 74 In January of 20L2, I became the Manager of 15 Regulatory Projects for Idaho Power, which is my current 76 position. In this position, I provide the regulatory Ll support for many of the large individual projects and 18 issues currently facing the Company. Most recently that L9 has included providing regulatory support for the inclusion 20 of the Langley Gulch power plant investment j-n rate base 27 and supporting the Company's efforts to address numerous 22 issues involving Qualifying Eacilities (*QF") as defined 23 under the Public Utility Regulatory Policies Act of 1978 24 (*PURPA"), including the Company's efforts in Case No. GNR- 25 E-11-03, the review of PURPA QF contract provisions. YOUNGBLOOD, Dr 3 Idaho Power Company l- Q. What is the purpose of your testimony in this 2 matter? 3 A. Idaho Power is requesting that the IPUC 4 authoxize the Company to implement solar integration rates 5 and charges consistent with its solar integration study 6 ("Study" or *2014 Study" or "Solar Study"). The 2074 So1ar 7 Study Report ("Study Report") is attached as Exhibit No. 1 8 to the testimony of Philip DeVol. Mr. DeVol's testimony 9 provides a summary of the Solar Study, a description of the 10 Technj-ca1 Review Committee and process utilized for the 11 Study, and the results of the 2074 Study. The purpose of L2 my testj-mony is to provide the Commission wj-th the l-3 Company's request to implement sol-ar integration rates and 74 charges based upon the costs identified by the Solar Study. 15 O. Based on the resul-ts of the 20L4 Study, what 16 is the cost of integrating solar generation on Idaho t7 Power's electrical system? 18 A. As presented in Mr. DeVol-'s testi-mony, the t9 Solar Study analyzed four sofar build-out scenarios at 20 install-ed capacities of: 100 megawatts ("MW"), 300 MW, 500 2L MW, and 700 MW. The results of the Solar Study show the 22 integration costs indicated in the following tables: 23 24 25 YOUNGBLOOD, Dr 4 Idaho Power Company Average Integration Cost per t'fi{h (20L4 cost and dollars) 3 4 5 6 '7 8 9 10 11 L2 13 l4 15 t6 ft 18 19 20 2t 22 23 24 25 Increnental. Integration Cost per MtNh (2OL4 cost and dollars) The costs identified by the Solar Study reflect the costs to integrate sol-ar generation for the calendar year 20L4. The costs are reported in 20L4 dollars and were rounded to the nearest ten (10) cents. They are not averaged or Ievelized over the life of the solar project or plant. O. What is the dlfference between the Average Integration Cost and the Incremental Integration Cost described in the 2014 Study? A. The Average Integration Costr ds shown above, reports an average cost per megawatt-hour ("MWh") for each of the four discrete solar buil-d-out scenarios modeled in the Study. In other words, the Average Integration Cost refl-ects the average cost per MWh to integrate one block of sol-ar generation, independentJ-y, for each penetration level- of solar generation: 0-100 MW; 0-300 MW; 0-500 MW; and 0- 700 MW. Conversely, the Incremental Integration Cost indicates the cost of i-ntegrating solar generation as it YOUNGBLOOD, DI 5 Idaho Power Company Buil-d-out Scenarios 0-100 MW 0-300 MW 0-500 MW 0-700 MW Integration Cost s0.40 $1.20 $1. B0 $2.s0 Penetration Level-0-100 MW 100-300 MW 300-500 MW 500-700 MW Integration Cost s0.40 $1. s0 $2.80 $4.40 1 2 3 4 q 6 7 B 9 10 11 t2 13 74 15 I6 T7 18 19 20 2L 22 23 24 25 would be assigned across the four blocks of solar generation penetration levels, in 200 MW increments. O. Please provlde an example to further explain the distinction between Average fntegration Cost and Incremental- Integration Cost. A.Certainly. According to the 2014 Study, the Average Integration Cost for al-l solar generation from 0- 700 MW is $2.50 per MWh. That means that if the total cost of integrating 700 MW of solar were to be spread equally to all 700 MW of solar generation, the cost of integration would be $2.50 for each MWh generated. However, if that same cost of integrating 700 MW of solar were to be broken up into 100 and 200 MW increments, the Incremental Integration Cost for the first 100 MW of sol-ar generation would be only $0.40 per MWh. The incremental cost of integration for the next 200 MW of sofar generatj-on (from 100 MW to 300 MW), assuming that the first 100 MW of solar generation remains at $0.40 per MWh, woul-d be $1.50 per MWh. For the next 200 MW (300 MW to 500 MW), again assuming that the cost per MWh for the each of the first two blocks of integration remaj-ned unchanged, would be a cost of $2.80 per MWh. The last 200 MW (500 MW to 700 MW) of sol-ar generation would incur a cost of $4.40 per MV{h. In aggregate, the total cost of integrating solar identified by ej-ther method, the Average Integration Cost YOUNGBLOOD, DI 6 Idaho Power Company 1 2 3 4 5 6 7 8 9 10 11 L2 13 74 15 16 t1 18 19 20 27 22 23 24 25 or the Incremental lntegration Cost, is the same. EssentiaIIy, the cost of solar integration increases as the penetration l-evels of solar increase on the system. The Study identified the discrete cost to integrate solar generation at four discrete penetration leveIs. However, if costs are assigned on an incremental basis, then costs are more closely assigned with the cause of those costs, and thus the initial generation is assigned a lower cost than the later generation that shows up when it is more costly to integrate. 0.How does the Company propose to implement sol-ar integration cost recovery? A.fdaho Power proposes that a solar integration charge be established to col-Iect the incremental- cost of integration at each 100 MW of solar generation penetration. Because there are not currently any solar projects paying any integratj-on charge on Idaho Power's system, the sol-ar integration charge simply starts at zero and j-ncreases consistent with the costs of integration identified in the Sol-ar Study, at every 100 MW of solar nameplate capacity penetration level. The proposed solar integration charges are rounded to the nearest penny and are illustrated in the chart on the next page: YOUNGBLOOD, Dr 7 Idaho Power Company Ss.oo $ s+.so t so.oo E ss.so(., .E ss.oo l!i sr.so E! S2.oo o* st.to c E sr.ooo E So.so s- Proposed lncremental Solar lntegration Charge 100 200 300 400 s00 Nameplate Penetration Level of Solar Capacity (MW) 1 2 3 4 5 6 7 I 9 10 11 72 13 74 15 16 L7 18 !9 20 2L 22 23 24 25 O. How does the Company propose that the Solar Incremental Integration Charge be implemented for solar generation? A. Similar to what the Company submitted and will request for the cost recovery of wind integration costs, ldaho Power recommends that the Commission all-ocate costs on a per MWh basis for incremental l-evel-s of solar penetration, and not on a percentage of avoided cost rate basis, like what was done for the initial- wind integration charge. Idaho Power al-so proposes that both wind and solar integration charges are set forth in a tariff schedule, specifically established for intermittent generation integration charges. YOUNGBLOOD, Dr I Idaho Power Company 1 2 3 4 5 6 1 I 9 10 t-1 1,2 13 L4 15 16 L7 18 19 20 27 22 23 24 25 O. Have you provided an example of what an integration tariff might look like? A.Yes. Exhibit No. 2 to my testimony is a draft Schedul-e 87, Variable Generation Integration Charges, that I have prepared. The integration charges from Schedule 87 woul-d be deducted from the avoided cost rates established for and set out in a PURPA contract. O. Can you descrj-be the proposed Schedule 87, Variable Generation Integration Charges, you provide in Exhibit No. 2? A.Yes. Schedule 87 is a draft of a new tariff which is intended to provide the j-ncremental i-ntegrati-on charges to be assessed to QFs whose generation resource is variable and intermittent in nature, like wind or so1ar. Schedule 87 would provide the wind and sol-ar integration charges consistent with the most recent Commission-approved integration study applicable to both wind and sol-ar generation. The draft of Schedule 87 submitted as Exhibit No. 2 contains onJ-y the proposed incremental integration charges for solar generation based upon the 2074 Study, and contains a placeholder for the inclusion of the appropriate wind integration charges, once they are determined by the Commission. The charges set forth in Schedule 87 are the amounts to be deducted from avoided cost rates each year, beginnj-ng in the year the project comes online, based on YOUNGBLOOD, Dr 9 Idaho Power Company 1 the nameplate capacity of installed sol-ar generation at the 2 scheduled operation date of the proposed project. Being 3 tariff-based would a11ow integration costs to be updated 4 for new contracts as additional- solar generation is added 5 to the system, or whenever a new solar integration study is 6 completed and identifies a change in integration costs. 7 Having the costs set forth in Schedule 87 provides 8 transparency for the developers as to what the appropriate 9 integration charges wou1d be based upon the scheduled 10 operation date of the proposed project. 11 O. Can you describe the format in which the 72 integration charges are set out in Schedule 87? 13 A. Yes. Idaho Power has formatted the 14 integration charges to appear in the same format as that 15 used by the Commission to post the published avoided cost 1,6 rates. Each penetration level- (each 100 MW increment) has 71 its own table clearly identified and set forth in Schedul-e 18 81, and discloses both the levelized integration charge, ds L9 well as the non-l-evelized stream of integratj-on charge 20 amounts listed by year. Just like published avoided cost 2L rates, the schedul-ed operatj-on date for the proposed 22 generation project is used as the starting point in the 23 table, and each yearly amount through the term of the 24 proposed contract is set out accordingly. 25 O. Does this conclude your testimony? 26 A. Yes it does. YOUNGBLOOD, Dr 10 Idaho Power Company t- 2 3 4 5 6 7 8 9 10 11 72 13 L4 15 76 L1 18 L9 20 2L 22 23 24 25 26 27 28 29 30 31 32 ATTESTATION OF TESTIMONY STATE OE County of rDAHO )) ss. Ada ) I, Michael J. Youngblood, havi-ng been duly sworn to testify truthfully, and based upon my personal knowledqe, state the following: f am employed by Idaho Power Company as the Manager of Regulatory Projects in the Regulatory Affairs 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 bel-ief . DATED this l"t day of July 2014. SUBSCRIBED AND S July 20L4. 0bw Idaho exp]-res: YOUNGBLOOD, Dr 11 Idaho Power Company before Nolary Pu Residing ati My commission BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION GASE NO. IPC-E-14-19 IDAHO POWER GOMPANY YOUNGBLOOD, DI TESTIMONY EXHIBIT NO.2 ldaho Power Company I P t.l C No 29 Tariff No 101 OrioinalSheet No. 87-1 SCHEDULE 87 INTERMI]TENT GENERATION I NTEGRATION CHARGES APPLICABILITY This schedule is applicable to all qualifying facility ('QF') generators interconnected to the Company that have generation of an intermittent nature, such as wind and solar generation. The initial charges within this schedule are to be assessed to intermittent generation based upon the total nameplate capacity of a specific type of intermittent generation interconnected to Company's system. PART 1 -WIND INTEGRATION CHARGES The following tables are applicable to all QF wind generation contracts that come online after Month. Dav. Yean I nte ntion al ly Left Bl a n k PART 2 - SOLAR INTEGRATION CHARGES The following tables are applicable to all QF solar generation contracts that come online after August 1,2014: Exhibit No. 2 Case No. IPC-E-14-18 M. Youngblood, IPC Page 1 of8 IDAHO lssued per Order No. Effective - lssued by IDAHO POWER COMPANY Gregory W. Said, Vice President, Regulatory Affairs 1221West ldaho Street, Boise, ldaho ldaho Power Company |.P.U.C. No. 29. Tariff No. 101 OriqinalSheet No. 87-2 SCHEDULE 87 INTERMITTENT GENERATION I NTEGMTION CHARGES (Continued) SOLAR INTEGRATION CHARGES (Continued) 0 - 100 MW Solar Capacity Penetration Level LEVELIZED ON-LINE YEAR 20 YEAR CONTRACT TERM LEVELIZED RATES 2014 2015 2016 2017 2018 2019 0.54 0.s6 0.58 0.59 0.61 0.63 NON.LEVELIZED CONTRACT YEAR NON- LEVELIZED RATES 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 0.43 0.44 0.46 0.47 0.48 0.50 0.51 0.53 0.54 0.56 0.58 0.60 0.61 0.63 0.65 0.67 0.69 0.71 0.73 0.75 0.78 0.80 0.82 0.85 0.87 0.90 Exhibit No. 2 Case No. IPC-E-14-18 M. Youngblood, IPC Page 2 of 8 IDAHO lssued per Order No. Effective - lssued by IDAHO POWER COMPANY Gregory W. Said, Vice President, Regulatory Affairs 1221West ldaho Street, Boise, ldaho ldaho Power Company |.P.U.C. No. 29. Tariff No. 101 OrioinalSheet No. 87-3 SCHEDULE 87 I NTERMITTENT GENERATION I NTEGRATION CHARGES (Continued) SOLAR INTEGRATION CHARGES (Continued) 101 - 200 MW Solar Capacity Penetration Level LEVELIZED ON-LINE YEAR 20 YEAR CONTRACT TERM LEVELIZED RATES 2014 2015 2016 2017 2018 2019 1.49 1.53 1.58 1.63 1.68 1.73 NON.LEVELIZED CONTRACT YEAR NON- LEVELIZED RATES 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 1.18 1.22 1.25 1.29 1.33 1.37 1.41 1.45 1.50 1.54 1.59 1.63 1.68 1.73 1.79 1.84 1.89 1.95 2.01 2.07 2.13 2.20 2.26 2.33 2.40 2.47 Exhibit No. 2 Case No.IPC-E-14-18 M. Youngblood, IPC Page 3 of 8 IDAHO lssued per Order No. Effective - lssued by IDAHO POWER COMPANY Gregory W. Said, Vice President, Regulatory Affairs 1221West ldaho Street, Boise, ldaho ldaho Power Company |.P.U.C. No. 29. Tariff No. 101 OriqinalSheet No. 87-4 SCHEDULE 87 I NTERMITTENT GENERATION I NTEGRATION CHARGES (Continued) SOLAR I NTEGRATION CHARGES (Continued) 201 - 300 MW Solar Gapacity Penetration Level LEVELIZED ON-LINE YEAR 20 YEAR CONTRACT TERM LEVELIZED RATES 2014 2015 2016 2017 2018 2019 2.32 2.39 2.46 2.54 2.61 2.69 NON.LEVELIZED CONTRACT YEAR NON- LEVELIZED RATES 20't4 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 1.U 1.89 1.95 2.01 2.07 2.13 2.20 2.26 2.33 2.40 2.47 2.55 2.62 2.70 2.78 2.87 2.95 3.04 3.13 3.23 3.32 3.42 3.52 3.63 3.74 3.85 Exhibit No. 2 Case No. IPC-E-14-18 M. Youngblood, IPC Page 4 of 8 IDAHO lssued per Order No. Effective - lssued by IDAHO POWER COMPANY Gregory W. Said, Vice President, Regulatory Affairs 1221 West ldaho Street, Boise, ldaho ldaho Power Company LP.U.C. No. 29. Tariff No. 101 OrioinalSheet No. 87-5 SCHEDULE 87 I NTERMITTENT GENERATION I NTEGRATION CHARGES (Continued) SOLAR INTEGRATION CHARGES (Continued) 301 - /m0 MW Solar Capacity Penetration Level LEVELIZED ON-LINE YEAR 20 YEAR CONTRACT TERM LEVELIZED RATES 20'14 2015 2016 2017 2018 2019 3.12 3.22 3.32 3.41 3.52 3.62 NON.LEVELIZED CONTRACT YEAR NON- LEVELIZED RATES 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2.48 2.55 2.63 2.71 2.79 2.87 2.96 3.05 3.14 3.23 3.33 3.43 3.53 3.64 3.75 3.86 3.97 4.09 4.22 4.34 4.47 4.61 4.75 4.89 5.03 5.19 Exhibit No. 2 Case No. IPC-E-14-18 M. Youngblood, IPC Page 5 of 8 IDAHO lssued per Order No. Effective - lssued by IDAHO POWER COMPANY Gregory W. Said, Vice President, Regulatory Affairc 1221West ldaho Street, Boise, ldaho ldaho Power Company |.P.U.C. No. 29. Tariff No. 101 OriqinalSheet No. 87€ SCHEDULE 87 INTERMITTENT GENEMTION I NTEGMTION CHARGES (Continued) SOLAR I NTEGRATION CHARGES (Continued) 401 - 500 MW Solar Capacity Penetration Level LEVELIZED ON-LINE YEAR 20 YEAR CONTRACT TERM LEVELIZED RATES 2014 2015 2016 2017 2018 2019 3.94 4.06 4.18 4.31 4.44 4.57 NON-LEVELIZED CONTRACT YEAR NON- LEVELIZED RATES 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 3.12 3.22 3.31 3.41 3.52 3.62 3.73 3.84 3.96 4.08 4.20 4.32 4.45 4.59 4.72 4.87 5.01 5.16 5.32 5.48 5.64 5.81 5.98 6.16 6.35 6.54 Exhibit No. 2 Case No. IPC-E-14-18 M. Youngblood, IPG Page 6 of 8 IDAHO lssued per Order No. Effective - lssued by IDAHO POWER COMPANY Gregory W. Said, Vice President, Regulatory Affairs 1221West ldaho Street, Boise, ldaho ldaho Power Company l.P.U.C. No. 29. Tariff No. 101 OriqinalSheet No. 87-7 SCHEDULE 87 INTERMITTENT GENERATION INTEGMTION CHARGES (Continued) SOLAR INTEGRATION CHARGES (Continued) 501 - 600 MW Solar Capacity Penetration Level LEVELIZED ON-LINE YEAR 20 YEAR CONTRACT TERM LEVELIZED RATES 2014 2015 2016 20'17 2018 2019 4.76 4.91 5.05 5.2',1 5.36 5.52 NON.LEVELIZED CONTRACT YEAR NON- LEVELIZED RATES 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 3.78 3.89 4.01 4.13 4.25 4.38 4.51 4.64 4.78 4.93 5.07 5.23 5.38 5.55 5.71 5.88 6.06 6.24 6.43 6.62 6.82 7.02 7.24 7.45 7.68 7.91 Exhibit No. 2 Case No. IPC-E-14-18 M. Youngblood, IPC Page 7 of 8 IDAHO lssued per Order No. Effective - lssued by IDAHO POWER COMPANY Gregory W. Said, Vice President, Regulatory Affairs 1221 West ldaho Street, Boise, ldaho ldaho Power Company |.P.U.C. No. 29. Tariff No. 101 OriqinalSheet No. 87-8 SCHEDULE 87 INTERMITTENT GENERATION INTEGRATION CHARGES (Continued) SOLAR INTEGMTION CHARGES (Continued) 601 - 700 MW Solar Gapacity Penetration Level LEVELIZED ON-LINE YEAR 20 YEAR CONTRACT TERM LEVELIZED RATES 2014 20'15 2016 2017 2018 2019 5.54 5.71 5.88 6.06 6.24 6.43 NON-LEVELIZED CONTRACT YEAR NON- LEVELIZED RATES 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 4.39 4.53 4.66 4.80 4.95 5.09 5.25 5.40 5.57 5.73 5.91 6.08 6.26 6.45 6.65 6.85 7.05 7.26 7.48 7.70 7.94 8.17 8.42 8.67 8.93 9.20 Exhibit No. 2 Case No. IPC-E-14-18 M. Youngblood, IPC Page 8 of 8 IDAHO lssued per Order No. Effective - lssued by IDAHO POWER COMPANY Gregory W. Said, Vice President, Regulatory Affairs 1221West ldaho Street, Boise, ldaho