20141030SRA Comments.pdf

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October 30,2074
Via Hand Delivery
To: Idaho Public Utilities Commission
From: Ken Miller, Clean Energy Program Director, Snake River Alliance
Re: Snake River Alliance Comments In the Matter of the Application of Idaho Power Company for
Approval or Rejection of an Energy Sales Agreement with Grand View PV Solar Two, LLC, for the Sale and
Purchase of Electric Energy (Case No. IPC-E-L4-t9), and the Application of ldaho Power Company For
Approval or Rejection of an Energy Sales Agreement with Boise City Solar, LLC, for the Sale and Purchase
of Electric Energy, Case No. IPC-E-14-20.
On behalf of our memberS throughout Idaho Power's Idaho service area and pursuant to Commission
Order Nos. 33118 and 33119, the Snake River Alliance appreciates the opportunity to provide its
comments on Idaho Power's applications for approval or rejection of the energy sales agreements in both
ofthe above-referenced cases. Recognizing that each proposed Energy Sales Agreement presents
circumstances unique to each proposed project, we will nonetheless present these comments in response
to both above-referenced Orders, inasmuch as our recommendation for swift Commission approval of
each Agreement is similar in both cases.
The Applications
Idaho Power has presented the Commission with two Energy Sales Agreements: One for the proposed B0-
megawatt Grand View PV Solar Two LLC, consisting of about 340,480 polysilicon photovoltaic cells in an
array approximately 20 miles southwest of Mountain Home. The second is the proposed 40MW Boise
City Solar LLC solar array that would be located southeast of Kuna on Sand Creek Road. Both projects
have projected online dates in20L6. These projects and Energy Sales Agreements are the first of their
kind to be presented to the Commission for approval. They are also the first to be presented to the
Commission that would fall under the Commission's revised pricing method for intermittent projects
under the 1978 Public Utility Regulatory Policies Act (PURPA). One difference between the proposals is
that Grand View's project features PV panels "installed on a single axis tracking system, supported by a
fixed post and beam structure" (Order No. 33119, P. 1), while Boise City Solar's would employ a dual axis
tracking system (Order No. 33118, P. 1).Another difference between the two projects is that Grand
View's Agreement employs provisions for a Mechanical Availability Guarantee (MAG), while the Boise
City Solar Agreement contains provisions for a90/L10 firmness requirement (ldaho Power's preference,
Order 33118, P. 2).
Box425 | Pocarelrc,lD 83204 | "l8.233.7212
MAM'.SNAKERIVERALLIANGE.OBG
Box1731 | Borse,lD 83701 I 208.3449161
We encourage the Commission to take note of the fact that the Agreements include solar integration
charges, although those charges are grounded in Idaho Power's solar integration study, which "was not
yet complete during contract negotiations." (Order 33118, P. 2). As Idaho Power's solar integration costs
and requirements continue to evolve, so must future solar Agreements, particularly as they relate to grid
integration.
In short and as presented in more detail below, we believe both parties have agreed to Agreement
conditions that provide ample protections for Idaho Power and its customers in the event either project
fails to perform as expected. We appreciate the willingness on the part of both parties to provide these
assurances, which we acknowledge is a likely requirement if either project is to receive Commission
approval.
While we would have preferred that project developers retain a 100 percent interest in the respective
project's Renewable Energy Credits [RECs), we acknowledge that both developers agreed to a 50-50 REC
allotment between the Company and the developer. That being the case, we have no objection to the
treatment of the Green Tags in these cases.
Given that these projects can provide clean, reliable generation much closer to load than most of Idaho
Power's existing supply-side resources, we believe that, when constructed, each will help Idaho Power
expand its distributed generation resources while at the same time providing a valuable generation
resource without seriously impacting existing transmission and distribution infrastructure. Together,
these two Agreements continue Idaho Power on a more efficient, modern grid infrastructure.
Compliance with t}ae2OlZ Idaho Energy Plan
Importantly, both of these projects advance the intent of the 20LZ ldaho EnergSr Plan, which was adopted
by the Idaho Legislature in its 2012 Session. Excerpts from the Energy Plan are explicit in recognizing the
value of renewable energy as Idaho's electricity resource of second choice, following only energy
efficiency as the best value and electricity resource-of-choice, and Commission approval of these
Agreements furthers the goals of the Legislature's energy policies:
- "When acquiring resources,ldaho and ldaho utilities should give priority to cost-effective and
prudent: (7) conservation, energy fficiency and demand-response; and (2) renewable resources,
recognizing that these alone will notfulftll ldaho's growing energy requirements and that these
resources play a role in addition to conventional resources in providing for ldaho's energy needs
(2012 ldaho Energy Plan, P.9);
- Idaho utilities should continue to acquire resources that are reliable, affordable, cost-effective, and
environmentally sound to meet their customers' short and long-term electricity needs (Action ltem E-
1, P.9);
- Idaho should encourage cost-effective investment in renewable generation and combined heat and
power facilities (P. 9);
- The Committee finds ... that continued supportfor investments in economically attractive local
renewable energy resources such as wind energy, geothermal energy, solor, low-head hydro, and
biomass fuels could also provide economic benefits, particularly in rurol oreas of the state, while
representing an environmentally friendly source of energy (P. 7a);
- Though solar is an intermittent resource, its intermittency is consistent, and in general its production
potential lines up well with high demand (mid-day). As control systems continue to improve, there is
good likelihood for solar to play an important role P. a9);
- The state of ldaho should encourage technologies that minimize emissions, harmful pollutants, and
consumptive use of water (Action ltem E-6, P.117);
- Idaho could take actions to attempt to mitigate potential greenhouse gas emission regulotions
through ... supporting development of additional low carbon resources such as geothermal,
bioelectriciQt, wind, solar, distributed hydropower, and biomethane (Action ltem E-6, P. 717)."
It is clear that the intent of the Legislature's 20t2ldaho Energy Plan is to advance deployment of supply-
side resources such as solar generation when, as here, it is shown to be cost-effective. It is important to
note that, subsequent to the Idaho Energy Plan's adoption more than two years ago, the cost of all forms
of solar generation have declined sharply to the point where they are now competitive with most other
supply-side resources. If anything, the advantages of generation such as that before the Commission in
these two dockets have become more clear and favorable.
Protecting Customer I nterests
The Alliance appreciates that analyzing Energy Sales Agreements for a relatively young technology such
as utility-scale solar power must be done carefully, and we appreciate the deliberate and methodical
manner in which the Commission and Commission staff have approached these groundbreaking
Agreements and projects.
Furthermore, "ldaho Power states that the Agreement was executed in compliance with the
Commission's orders directing the implementation of PURPA for the State of Idaho and contains
negotiated avoided cost rates based on the incremental cost, integrated resource plan pricing
methodology available to solar projects whose generation will exceed 100 kilowatts (k\MJ" (Order 331L9,
P. 1 and Order 33118, P. 1).
Both proposed Agreements call on ldaho Power to pay the respective developers a non-levelized rate
under the 20-year term of the Agreements. The proposed payment level and solar integration charge for
each project differ, but are the result of lengthy negotiations between the developers and Idaho Power.
Customer protections fsuch as a reduced price for power below an agreed-upon threshold) for failure of
either project to meet their generation estimates are included in each Agreement. In both applications,
"the Company states that it is comfortable and confident that the Agreement contains provisions to
reasonably assure that the project performs in conformance with it generation estimates and if not, the
project receives a reduced priced for the non-conforming month's generation." (Both Orders, P. 2)
As the Commission is aware from prior filings dealing with utility planning and thermal power plant
investment issues, it is now clear that the levelized cost of solar power has declined sharply in as short a
time as that since Idaho Power's 2013 IRP. At the same time, we now know that the cost of investing in
and operating Idaho Power's coal fleet is on an irreversible upward trend. The dynamic of increasingly
favorable solar costs (along with solar's non-financial benefits) against steadily rising fossil fuel costs
cannot be ignored and should weigh in favor of Commission approval of these two Agreements.
Conclusion
Given the novel nature of these first-ever solar Energy Sales Agreements, we reiterate our appreciation of
the willingness by all concerned to negotiate these Agreements. We believe the addition of these grid-tied
solar projects to ldaho Power's generation portfolio will help blaze the trail for projects that are already
joining these two in the PUCs case queue. The Commission is aware of the Alliance's long support of
appropriate renewable energy technologies and of demand-side management programs as ways to help
ensure that Idaho meet its obligations to reduce our share of the region's greenhouse gas emissions. We
believe that solar power projects such as these are truly revolutionary in that they not only help bring
clarity to solar project contracting provisions and future negotiations, but that they also support the
spirit and the letter of the 2012 ldaho Energy Plan. In addition, we believe that development of these two
projects will be a boost to Idaho Power - and the state of Idaho, for that matter - as we work toward
compliance with the pending final Clean Air Act Rule 111(d) requiring sharp reductions in greenhouse
gas emissions by each state.
As always, the Alliance appreciates this opportunity to provide its views on this important issue. The
level of public interest in these dockets, as reflected in part by the volume of public comment, is inspiring
and yet another indication of the strong support at this Commission of solar power in ldaho's energy
future. We urge the Commission to approve both of these Energy Sales Agreements and acknowledge that
both advance the public interest. We also support the Commission's determination that these dockets
should proceed under Modified procedure pursuant to Rules 201 through204 of the PUC's Rules of
Procedure, IDAPA 3t.01.0L.20L-20 4.
Respectfully submitted,
4.-1ry,aL
Ken Miller
Clean Energy Program Director
Snake River Alliance
P.O. Bo 1731
Boise,lD 83701
(208) 344-et6t
[e-mail]
Hand Delivered
fean Iewell
Commission Secretary
Idaho Public Utilities Commission
472W. Washington St.
Boise,lD 83702
Electronic Delivery
Donovan E. Walker
Lead Counsel
Idaho Power Company
PO Box 70
Boise, [D83707-0070
E-mail: [e-mail]
Randy C. Allphin
Enerry Contract Administrator
Idaho Power Company
PO Box 70
Boise, \D 83707-0070
E-mail: [e-mail]