20150211final_order_no_33227.pdf

Office of the Secretary
Service Date
February 11,2015
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY’S APPLICATION TO )CASE NO.IPC-E-14-18
IMPLEMENT SOLAR INTEGRATION )
RATES AND CHARGES.)ORDER NO.33227
________________________________________________________________________________________
)
On July 1,2014,Idaho Power Company filed an Application with the Commission
seeking to implement solar integration rates and charges.The Commission issued a Notice of
Application on July 23,2014,setting an August 6,2014,deadline for persons/parties requesting
intervention.Order No.33079.Idaho Conservation League,Snake River Alliance and Sierra
Club petitioned for,and were granted,intervention.Order Nos.33090 and 33097.Matt Vespa,
attorney for Sierra Club,was granted pro hac vice admission.Order No.33117.A Notice of
Parties was issued on August 21,2014.The parties proposed,and the Commission adopted,a
procedural schedule.Order No.33137.
On November 5,2014,the parties filed a Joint Stipulation requesting that the
Commission vacate the November 6,2014 rebuttal deadline and the November 13,2014
technical hearing.The Stipulation stated that the parties wished to suspend the remaining
procedural schedule in order to pursue a resolution through settlement.On November 6,2014,
the Commission granted the parties’request and vacated the procedural schedule,including the
technical hearing originally scheduled for November 13,2014.Order No.33173.The parties
met for settlement discussions on November 17,2014.
On January 9,2015,pursuant to Rules of Procedure 56 and 274 through 276,the
parties filed a Joint Motion for Approval of a Settlement Stipulation.The parties agree that the
Settlement Stipulation represents a fair,just,and reasonable compromise of the dispute(s)
between the parties and that it is in the public interest.The parties maintain that the
Settlement Stipulation as a whole and its acceptance by the Commission represent a
reasonable resolution of all issues.
Based upon our review of Idaho Power’s Application,the testimony filed by the
parties,and the terms of the Settlement Stipulation,we approve the Settlement Stipulation
without material change or condition and as set out in greater detail below.
ORDER NO.33227 1
THE APPLICATION
Idaho Power’s Application maintains,due to the variable and intermittent nature of
solar generation,the Company must modify its system operations to successfully integrate solar
power without impacting system reliability,similar to wind generation.Idaho Power states 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 solar generation.
The Company asserts 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 this results in higher power supply costs that are
subsequently passed on to customers.
Idaho Power states that it is currently experiencing very high interest by,and rapid
growth of solar generation projects wishing to contract with and locate on Idaho Power’s
system.The Company maintains the rapid growth of wind and solar generation has led to the
recognition that Idaho Power’s finite capability for integrating variable and intermittent
generation is nearing its limit.This situation is expected to worsen as wind and solar penetration
levels increase,particularly during periods of low customer demand.
Idaho Power asserts the costs associated with solar integration are specific and unique
for each individual electrical system based on the amount of solar generation being integrated
and the other types of resources that are used to provide the necessary operating reserves.In
general terms,Idaho Power explains that the cost of integrating solar generation increases as the
amount of nameplate solar generation on the electrical system increases.The Company states
that failure to calculate and properly allocate solar integration costs to solar PURPA generators
when calculating avoided cost rates impermissibly pushes those costs onto utility customers,
making them no longer indifferent to whether the generation was provided by a PURPA
qualifying facility or otherwise generated or acquired by the Company.
Idaho Power proposes that a solar integration charge be established to collect the
incremental cost of integration at each 100 MW of solar generation penetration.The Company
proposes that the solar integration costs be set forth in a tariff schedule specifically established
for intermittent generation integration charges.The solar project’s scheduled operation date and
nameplate capacity would determine the charge that would be imposed through the term of the
proposed contract.
ORDER NO.33227 2
THE STIPULATION AND SETTLEMENT
The parties met on November 17,2014,for confidential settlement discussions.The
parties reached agreement on all issues related to the underlying case in Case No.IPC-E-14-18.
Based upon the settlement discussions,and as a compromise of the respective positions of the
parties,the parties agreed to the following terms:
Implementation of Schedule 87.Variable Generation Integration Charges —
The Parties agree to Commission approval and implementation of Schedule
87,Variable Generation Integration Charges,including the rates and charges
as proposed and filed by Idaho Power in this proceeding to implement solar
integration charges.
Initiation of a Second Solar Integration Study —The Parties acknowledge
that there are disagreements with respect to the methodology used in the
2014 Solar Study.The Parties agree that Idaho Power will initiate a second
solar integration study in January 2015.This second solar integration study
should be completed as expeditiously as possible with the goal of not
exceeding 12 months.Upon completion of the second solar integration study
Idaho Power will file the same with the Commission seeking to update
Schedule 87 with the results of said study.
Conduct of the Second Solar Integration Study —The Parties agree that the
second solar integration study should utilize a Technical Review Committee
(TRC)that generally adheres to the Princiies for Technical Review
Committee Involvement in Studies of Wind Integration into Electric Power
Systems authored by the National Renewable Energy Laboratory and the
Utility Wind Integration Group.The TRC should include members with
expertise in solar generation,variable energy integration,and electrical grid
operations.The Parties also anticipate participation in the second solar
integration study from the Idaho Public Utilities Commission Staff,the
Public Utility Commission of Oregon Staff,the appropriate personnel from
Idaho Power,and a technical expert designated by each of the Parties
herein.The Parties agree that the TRC will assist in developing the scope
of the second solar integration study and provide advice on the best
available methods to analyze solar integration needs,strategies,and costs on
Idaho Power’s system.The Parties agree and acknowledge that Idaho Power
is ultimately responsible for determining how the study is conducted,the
content of the study,and any results therefrom.If Idaho Power declines
TRC member suggestions for the conduct of the study,Idaho Power shall
provide explanation and basis for the same in writing as part of the study
process.
Consideration of Issues in the Second Solar Integration Study —The
Parties agree that Idaho Power,together with the TRC,will consider
ORDER NO.33227
whether the second solar integration study should include the following,
and if so,what would be the appropriate methodology to be used in
connection with the following:
Alternative water-year types (e.g.,low-type and high-type),range of water
years or normalized water year;
Intra-hour trading opportunities;
Shortening the hour-ahead forecast lead time from 45 minutes to 30
minutes;
Clustered solar build-out scenarios;
Other solar plant technologies (e.g..tracking systems or varied fixed-panel
orientation);
Correlation between solar,wind,and load variability,uncertainty,and
forecasting error;
Improved forecasting methods;
Energy imbalance markets,or other market structures;
Voltage/frequency regulation;
Increased transmission capacity,changes in operation of hydroelectric
facilities,addition of demand-side technologies;
Gas price forecast(s);
Modeling of sub-hourly scheduling of load and generation;and
Identification of the existence of low occurrence events that contribute to
proportionately higher integration costs and possible remedies,including
operational or contractual solutions to mitigate these events and reduce
integration costs and charges.
The Settlement Stipulation contains a provision stating that all terms and conditions
of the Settlement Agreement are subject to approval by this Commission and that only’after such
approval,without material change or modification,has been received shall the Settlement
Agreement he valid.The parties state that the Settlement Stipulation is a fair,reasonable,and
final resolution to this matter and others between the parties,and is in the public interest.
ORDER NO.33227 4
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).The Commission 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.The Commission is also empowered to resolve complaints
between QFs and utilities and approve QF contracts.
In this case,the parties entered into a Settlement Stipulation agreement.The parties
assert that the Settlement Stipulation is fair and equitable.The parties maintain that the
Settlement Stipulation is a reasonable resolution of all issues related to Idaho Power’s
Application to implement solar integration rates and charges.The parties further state that it is in
the public interest for the Commission to approve the settlement.
Our Procedural Rule 276 recognizes that the Commission is not bound by the parties’
settlement agreement.The Commission may accept,reject,or amend a proposed settlement.
IDAPA 3 1.01.01.276.The Commission will independently review any settlement to determine
whether it is fair,just and reasonable;in the public interest;or otherwise in accordance with law
or regulatory policy.Id.Furthermore,the proponents of a proposed settlement have the burden
of showing that the settlement is reasonable,in the public interest,or otherwise in accordance
with law or regulatory policy.IDAPA 3 1.01.01.275.
Based upon our review of the record developed in this case and the Settlement
Stipulation presented by the parties,we find that the settlement represents a reasonable
compromise of the original positions of the parties.Specifically,we note that the terms of the
Settlement Stipulation adopt the proposed solar integration schedule and set out parameters for
participation and content in Idaho Power’s next solar integration study.We commend the parties
for agreeing to put a schedule in place while a second study is conducted.We also appreciate the
willingness of all parties to collaborate and expedite the completion of the second solar
integration study.
Idaho Power’s Schedule 87 only contemplates solar integration charges at penetration
levels not exceeding 700 megawatts (MW).If penetration levels for solar generation exceed 700
ORDER NO.33227 5
MW prior to the completion of the second study,the Company is directed to utilize the same
process/methodology that it applied in its first study to extrapolate integration charges as solar
penetration increases.We find these settlement terms fair,just and reasonable.We further find
that the Settlement Stipulation is in the public interest.
ORDER
IT IS HEREBY ORDERED that the Settlement Stipulation between Idaho Power,
Commission Staff,the Idaho Conservation League,Sierra Club and Snake River Alliance
regarding Idaho Power’s Application to implement solar integration rates and charges is
approved.
IT IS FURTHER ORDERED that the parties shall comply with all of the terms and
conditions contained in the Settlement Stipulation.
IT IS FURTHER ORDERED that Idaho Power’s Schedule 87 be effective upon
issuance of this Order.The Company shall file a conforming tariff within seven (7)days.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §6 1-626.
ORDER NO.33227 6
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this /f
day of February 2015.
ATTEST:
MACK A.REDF ,C MMISSIONER
Ji4L
MARSHA H.SMITH,COMMISSIONER
Jell
C mmission Secretary
O:IPC-E-14-1 8ks5
ORDER NO.33227 7