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HomeMy WebLinkAbout20151005Snake River Alliance Comments.pdfRECfl iV Li]Comments of the Snake River Alliance on ldaho Power company'sffi::Tgrated Resource e,h1tdtqPrb pil rrr htr Ken Mitter, ctean Energy program Director, Snake nir"1,+1fi4{W#ffi' 18*,** October 5,z0ts The Snake River Alliance appreciates the opportunity to submit these comments to the ldaho Public Utilities Commission in docket IPC-E-15-19, ldaho Power Company's 20L5 lntegrated Resource Plan (lRP), on behalf of its members, many of whom are customers of ldaho Power. The Alliance commends ldaho Power for its continued progress in making the IRP Advisory Council (IRPAC) process increasingly transparent and accessible to the public. We would like to see a greater and more diverse public participation in IRPAC meetings, however, and believe that if ldaho Power were to more actively promote or publicize its IRPAC meetings, more of its customers might attend and participate. Given that most of ldaho Power's customers cannot attend these daylong meetings due to their work schedules or other circumstances, we recommend that Company more creatively explore methods to increase public participation. Nonetheless, ldaho Power deserves credit for welcoming the public at its IRPAC meetings and allowing customers and other stakeholders to participate in a more conversational manner during the course of the IRPAC meetings. The Alliance recommends that the Commission accept ldaho Power's 2015 lRP, but we also recommend that in so doing the Commission provides specific guidance, outlined below, as ldaho Power undertakes development of its 20L7 lRP. We are disappointed that ldaho Power did not have an opportunity to adjust this IRP to better reflect future load and other conditions that have changed since the submittal of this lRP. lt should be clear to the Commission that ldaho Power has more-than-abundant supply-side resources, which has led to the unfortunate curtailment of certain demand-side resources, notably ldaho Power's three demand response programs. We are concerned that emphasizing thermal power production resources while interrupting demand response resources sends the wrong message to customers, and raises questions about the Company's commitment to reducing its greenhouse gas emissions. IRPAC PROCESS The Alliance commends ldaho Power and its staff that worked on the 2015 IRP for the seeking and acknowledging various views expressed by IRPAC members and by other members of the public and stakeholders. The IRP team also conducted workshops in addition to the traditional IRPAC monthly meetings to allow IRPAC members and others to engage in more detailed, thoughtful discussions that helped inform the final product. IRPAC members were pleased with ldaho Power's willingness to analyze more than 20 possible portfolios - a significant increase from the number of portfolios analyzed in prior lRPs. The company's IRP team regularly reached out to IRPAC members in meetings and informally to make the process accessible and visible. We do note that, for various reasons, including some beyond ldaho Power's contro!, non-IRPAC public participation in monthly meetings was negligible although ldaho Power's IRPAC team regularly fielded questions from non-IRPAC members, which improves the process. We suggest ldaho Power work harder to publicize IRPAC meetings in a more visible fashion and, as mentioned above, explore more creative, additional methods to engage with stakeholders such as with periodic evening meetings to allow customers and others to provide input at various stages of the IRP's development. This is not a criticism of the IRPAC process; rather a suggestion on how to broaden public participation. PREFERRED PORTFOLIO This IRP is somewhat different from many earlier tRPs in that it was created at a time when ldaho Power had little need for additional energy resources, and with July energy deficits not occurring for all analyzed portfolios through 2025 or beyond. The December energy deficits do not appear until far longer - beyond 2032 in most portfolios. Because ldaho Power is so long energy, participants in the 2015 IRP process had the opportunity to concentrate less on meeting near-term supply-side energy requirements and instead focus more on such thing as various carbon emissions reduction scenarios (EPA Clean Power Plan, carbon caps, carbon taxes, etc.) and, for the first time, serious discussions on scenarios that would result in early closures of some plants in ldaho Power's coal fleet. That is reflected in the preferred portfolio, 6b, which as discussed below envisions the early retirement of both North Valmy coal units, but also development of the Boardman Hemingway transmission project to offset some of the lost production stemming from the Valmy closures. We understand why ldaho Power coupled coal plant decommissioning with large new transmission, but we aren't convinced that developing and energizing B2H is the only scenario in which coal and Valmy in particular can be phased out over time. Part of our concern is that B2H has a long (and understandable) history of development delays and soaring costs. However, this portfolio assumes that if 500MW of B2H installed capacity is not built on time, there a strong likelihood that additional new natural gas generation beyond the 300MW of installed capacity from a CCCT in 2031 will be the default resource in this portfolio. Also as discussed below we are pleased that ldaho Power is embarking on new pilot projects such as ice-based thermal energy and community solar. We have been frustrated in the past that solar "pilot" projects have been included in prior lRPs, but that for various reasons never materialized. Also, as other commenters will certainly point out, Portfolio 6(b) is not the least cost portfolio of those analyzed. For instance, Portfolio t has a lowest cost relative difference to the "status quo" Portfolio l that is 5103,880,000, while Portfolio 6(b) has a lowest cost relative difference to status quo of 5t78,464 - a difference of about S75 million lP. LL7l. Portfolio 9 would retire the Valmy units in 2019 and 2025 and also include demand response, B2H, and a simple cycle turbine. We recommend at least one Valmy unit be retired by 20L9, and that both are retired no later than 2025. lmportantly, this is the first ldaho Power IRP in which portfolios containing coal plant retirements outperformed ma ny portfolios: "As previously noted, portfolios with early North Valmy unit retirements performed well in the 2015 IRP analysis; analyses show favorable economics for portfolios with the retirement of North Valmy Unit 1 as early as 2019. However, these portfolios carry considerable risk associated with the following factors" (P. 10). Those factors include uncertainty related to the Clean Power Plan, although as we point out many such uncertainties have been reduced since the Clean Power Plan's release in final form in August. Other uncertainties include the complexities of closing plants owned by multiple utilities, although in the case of Valmy all indications are that co-owner NV energy is pursuing a retirement scenario more aggressive than that of ldaho Power' and also related to ldaho Power's PURPA solar obligations, but again that picture is clearer today than when the 2015 IRP was submitted to the PUC. It is helpful and in many cases important for an electric utility portfolio to look out into the 20- year time frame, particularly when examining emissions such as CO2, NOx, SO2 and Hg (P. 125), but as this IRP correctly notes, attempting to project such emissions without more clarity regarding the future of such assets as Jim Bridger Units 1 and 2 make such projections problematic. COAL PLANTS AND CLEAN POWER PLAN RULE 111.(D) We are encouraged that the 2015 IRP does not attempt to forecast future carbon prices in their myriad forms. Prior lRPs have attempted to do so, but forecasting carbon constraints or costs has proven impossible. We agree with ldaho Power that it is far more effective to view the carbon issue partly through the prism of EPA's Clean Air Act Section 111(d) amendment to curtail carbon emissions from existing power plants. This, too, is an inexact science inasmuch as the IRP was prepared in advance of the release of the final Rule 111(d), but it is a step in the right direction. Furthermore, ldaho is only in the formative stages of determining a compliance and implementation plan to submit to EPA, including whether the state may join a possible regional alliance of states for overall compliance, not to mention whether it will lean more toward a rate-based or mass-based plan. ln any case, we expect whatever implementation plan ldaho puts forward must come to grips with the reality that ldaho Power's coal fleet generation upon implementation of Rule 111(d) will be curtailed, even though it is located outside of ldaho, or that the cost of the generation will rise exponentially if coal plant owners seek to reduce plant emissions through expensive environmental retrofits. ldaho Power is to be commended for addressing the Clean Power Plan sensitivity analysis in such a thorough fashion. lt is true that ldaho's assigned emission reductions are far lower in the final Rule 111(d) than in the draft, but compliance will nonetheless demand reductions at some level. For instance, in analyzing the system-wide mass-based compliance category, the IRP states (P. 115) that: "Under this approach, system-wide emissions, which include emissions from Langley Gulch and ldaho Power's share of Jim Bridger and North Valmy, are constrained to 6,332,020 tons of CO2 from 2O2Oto 2029, and to 5925,874 tons of CO2for 2030 and beyond." The IRP states further in reviewing emissions-intensity compliance using the EPA's compliance building blocks, which have changed, and in some cases significantly, since the final rule was issued subsequent to completion and filing of this IRP: "ldaho Power makes the following assumptions in using the EPA's building blocks as the basis for CAA Section 111(d) compliance: ,/ Boardman coal plant I reduced to a zero production level and retired by year-end 2020; ,/ North Valmy coal plant is reduced to a zero production level and retired as early as year-end 20L9 or as late as year-end 2025; until retirement, ldaho Power's share of North Valmy is assumed to have an annual constraint equal to its 2012 production level (lPC share =8L4,264 MWh); ,/ Jim Bridger coal plant is reduced to a production level 53,320 MWh less than its 2OL2 production level of 4,54L,772 MWh (lPC share); the re-dispatch of Jim Bridger is to a new 95MW CCCT under construction in Wyoming. We expect that in the interim between the 2015 and 2O!7 lRPs, ldaho Power will address the issues of the future Jim Bridger Units l and 2. We understand that the PUC-approved selective catalytic reduction (SCR) addition to Bridger 3 and 4 is well under way, extending the life of those units despite the inevitable carbon control requirements that are now reality. We didn't believe then that the investment was in the best interest of ldaho Power customers, and we are certain that adding SCRs to Units 3 and 4 will not be - particularly given the regulatory landscape wil! be much more in focus leading up to the next lRP. We urge the Commission to impress upon ldaho Power that it would be placing itself at considerable risk in terms of cost recovery in the event it pursues SCRs at those two coal units. And we are concerned that, as we expressed in our testimony in IPC-E-13-15, that further investments in SCR technology are not in the best interest of ldaho Power customers and that such investments do not address coal plant carbon emissions. Not included in this 20L5 IRP is the issue of the "socialcost of carbon" (SCC), also referred to as the "social cost of climate change." We recommend that the Commission direct all ldaho regulated electric utilities to address the social cost of carbon in future lRPs. lt is understandable that SCC has not been addressed in prior lRPs, but there is ample data today to warrant including the social cost of carbon in future utility resource plans. There now exist measurable impacts that can be attributed to CO2 releases from utility coal plants apart from the established climate impacts, and these now-quantifiable impacts must be included when evaluating least-cost and least-risk comparisons of supply side resources for purposes of analyzing IRP portfolios. The Northwest Power and Planning and Conservation Council (www.nwcouncil.org) is addressing this issue as it crafts its 7th Power Plan for the four northwest states, including ldaho. We encourage the ldaho Commission to review the growing body of information on SCC and that it direct ldaho Power to address it in its 2017 lRP. PILOT PROJECTS As mentioned above, we are encouraged by ldaho Power's identification of three proposed pilot projects (PP. 6-8): Solar photovoltaic to address distribution feeder voltage loss; ice-based thermal energy storage; and community solar. As ldaho Power states (P. 7)the Community solar pilot, which in this IRP has not been fully formed, can take several shapes depending on ownership, source of financing, project host, subscriber motive, and others. Ultimately, however, a primary goal of any community solar project should be to provide the opportunity to buy solar power if for some reason they are otherwise unable to install their own rooftop PV, such as tree coverage over the roof living in multi-family housing. This is different from ldaho Power's green power program in which customers can designed a charge on their bills to finance programs such as Solar 4R Schools but does not allow them to receive direct benefits from investing in solar PV off of their residence. One community solar model can allow customers to purchase solar power from a central station, along with other customers also buying shares, and have that generation offset part of their bills, so they benefit directly from their green power investments. ldaho Power states on P. 8 that: "lt is important to note that ldaho Power's load and resource balance indicates an investment in any ne generation, including solar generation, is neither needed nor economic to pursue at this time or during the four-year action plan horizon. However, as regulations governing carbon emissions mature, additional renewable generation may be warranted, and community-shared solar could be a viable option to help satisfy some future carbon intensity targets." It is also important to note that the amount of generation that would be produced in the early stages of community solar development would be, in the scale of ldaho Power's resources, all but imperceptible. By all indications, ldaho Power continues to struggle with what it perceives as challenges integrating solar onto its system. We stress that this is a pilot project designed to help ldaho Power become more familiar with solar integration, not to mention well-established customer demand for clean energy such as solar. We have watched too many solar pilot projects in ldaho Power lRPs undeveloped, including for reasons we take issue with, and urge the Commission to hold ldaho Power accountable for implementing its community solar pilot projects so all customers can be assured the company is committed to pursuing solar power as part of its supply-side portfolio. Subsequent to its filing its 2015 lRP, ldaho Power convened a meeting of its IRPAC and all interested parties to discuss possible community solar pilot project models. This meeting, held on Oct. 7,2Ot5, was very productive and The issue of ice-based thermal energy storage is one that has come up during discussions in prior lRP. The technology is mature and has been implemented by many utilities as a load- shifting demand response technology. We are pleased ldaho Power is likewise considering ice- based TES and urge the Commission to support this pilot. Solar photovoltaic to address distribution feeder voltage loss is also a proposal that warrants PUC's interest. As with community-based solar, this is yet another opportunity for tdaho Power to gain more familiarity with solar integration at various scales. ldaho Power says it will report on its early experiences in the 2Ot7lRP, and we encourage the Commission to ensure that occurs. Not only can this technology reduce the problem of voltage losses at the end of the feeder, it can also reduce unnecessarily expensive distribution upgrades. TRANSMISSION The Alliance first and foremost supports non-wires solutions to load and resource balance challenges. lnasmuch as investments in transmission infrastructure have waned regionally and nationwide, however, we understand the need for certain well-planned and well-sited transmission projects. ln the lntermountain and Pacific Northwest, it is clearthat many of our transmission pathways have become severely constrained. Because of the planning and development horizon for purposes of regulatory approval, Boardman to Hemingway presents some challenges. The Alliance generally supports 82H development as helping to move energy to and from ldaho to West Side markets in part because our respective peak seasons do not coincide, so excess power can be move to areas needing that generation depending on their seasonal loads. As a summer peaking utility, ldaho purchases energy from Mid-Columbia energy trading market to meet its peak, and then sell excess power to the Pacific Northwest during that region's winter and spring peaks. The Alliance does not oppose ldaho Power's inclusion of B2H in its preferred portfolio and we also commend ldaho Power's sharing of information regarding the B2H process to date, but given the gravity of a B2H delay could have on the balance of ldaho Power's preferred portfolio and the potential for increased CO2 emissions, such as with new natural gas generation projects, we urge the Commission to require quorterly public reports on the status of the B2H project. We are not proposing disclosure of confidential or proprietary information, but in the spirit of allowing public information to such information a willingness to inform in a direct way how the status of the Boardman to Hemingway project. SOLAR POWER As the Commission knows, the Alliance is at odds with both ldaho Power and the Commission's respective positions on utility-scale solar power, and, respectfully, the Commission's conclusion in Order No. 33357 in Case No. IPC-15-01. We believe the Commission should direct ldaho Power - and for that matter o// regulated utilities under its jurisdiction - to ensure the levels of solar power production as called for in the current ldaho Energy Plan, which states, in part: "Southwest ldaho's solar potential is very similar to that of the desert southwest, which has the highest solar potential in the United States. This allows ldaho many opportunities for solar power applications; however, despite its excellent solar resource potential, ldaho is behind much of the rest of the country in solar installations. lt is estimated that a total of 1 to 1.2 MW of solar PV is currently installed in ldaho. ln 2010 alone, the Solar Energy lndustry Association estimates 7,737 MW of PV were installed in the US." According to the U.S. Department of Energy's Nationa! Renewable Energy Laboratory (NREL), ldaho's "total estimated technical potential" for urban and rural utility-scale photovoltaics is 23,195 GWh and 3,936,848 GWh, respectively, ranking ldaho among the most favorable of the states for its solar potential. Yet for a variety of reasons, ldaho is not contributing a single megawatt of solar power to the western grid. And according to NREL (U.S. Renewable Energy Technical Potentials: A GIS-Based Analysis, JulV 2OL2l NREL/TP6A20-51946), ldaho also has 3 gigawatts of estimated technical potential for rooftop photovoltaics; yet again we are seeing rooftop PV installations stymied by resistant utilities. On P. 34 of the lRP, ldaho Power discusses its obligations to comply with Oregon solar pilot requirements: "Under the Oregon Solar PV Capacity Standard as stated in ORS 757.370,|daho Power is required to either own or purchase the generation from a 500-kW utility-scale solar PV facility by 2020. Under the rules if the utility scale facility is operational by 2016, the RECs from the project would be doubled for purposes of complying with the State of Oregon RPS. ldaho Power does not plan to build or acquire the generation from a 500- MW solar facility in Oregon prior to 20L6, as the company already has sufficient RECs to meet the Oregon RPS requirement and no near-term needs for additional generation. The company will further evaluate this requirement in the 2017 IRP and determine the best method of meeting the 2020 compliance deadline." We urge the Commission to direct regulated electric utilities and interested stakeholders to explore why these troubling trends are taking place. Clearly, there exists a decoupling of the intentions of the ldaho Legislature in the 2012 ldaho State Energy Plan to promote renewable energy development, including solar power, and what is happening in 2015 - or rather what is not happening in 2015. We ask that the Commission reiterate its intent that the spirit of the 2012 ldaho Energy Plan envisions robust development of solar energy at the utility and residential and commercial levels should be encouraged and that ldaho's regulated electric utilities plan for and encourage solar power development in their respective service territories. lf the Commission disagrees with the Legislature's intent as reflected in the state Energy Plan, we urge it to provide guidance to the Legislature as it prepares to update the Energy Plan in the coming Legislative interim session. PURPA issues aside, we believe the Commission should inquire further to ldaho Power why it is not attempting to secure RECs that could be doubled for purposes of complying with the Oregon RPS. lf ldaho Power doesn't intend to "build or acquire the generation from a 500MW (sic)facility in Oregon prior to 2OL6, it should better explain its intentions to comply with its obligations in Oregon. At a minimum, this apparent typographical error (500-kW versus a 500- MW)facility should be addressed. RISK The Snake River Alliance is concerned about the impacts that ldaho Power's proposed coal- plant upgrades will have on its customers, and those concerns are expressed in more detail in our testimony in IPC-E-73-L6. We believe the risks associated with this investment regime - and they are considerable - must be considered as always as the Commission deliberates the relative risk that should be assigned to ratepayers and to shareholders. As the Commission is hearing through public comments and as we have noted above, there are lower risk and lower cost portfolios than Portfolio 6(b). Our preference is that the Commission direct ldaho Power to pursue one of those alternatives, particularly in light of the Company's acknowledgement that a 2019 retirement of one of the Valmy coal units would benefit customers despite possible risks. We do not oppose Portfolio 6(b); we suggest instead that there are alternatives that may better serve customers' interests. MISCELLANEOUS 2015 IRP MATTERS AND RECCOMENDATIONS TO THE COMMISSION ,/ The Alliance believes that tdaho Power's estimate of the number of currently licensed electric vehicles in its service territory is inaccurate and must be recalibrated to reflect the actual number of electric vehicles license and operating in ldaho. Unless and until that occurs, any and al EV projections and more importantly the impacts, including benefit, from electric vehicle integration onto ldaho Power and other grids cannot be analyzed. The narrative on P. 10 in Appendix A must be updated for the 2017 lRP. A staff member from The Alliance joined ldaho Power and many other EV owners on Sept. 20, 20L5, at an EV event that featured more than 35 vehicles. lt is evident that ldaho Power must continuously update its forecasts for EV penetration, as it will influence the company's load forecasts. This is understandable inasmuch as the EV technologies and penetration numbers change so rapidly. We suggest the Commission direct ldaho Power to continue to freshen its EV projections, and the implications for its system, more frequently. ,/ The Alliance encourages the PUC to direct ldaho Power to conduct a complete investigation and report on the findings of that investigation of the 1954 Columbia River Treaty. CRT negotiations will have significant impacts on the operations of the Snake and Columbia river operations and ecosystems going forward, and the Alliance believes ldaho must be an important player in treaty negotiations and that those negotiations well represent ldaho's concerns about protecting habitat of its cherished fish runs and populations. ldaho Power is a member of the Columbia River Treaty Power Group and the coming changes to the CRT may well impact ldaho Power's hydro system and generation. The ldaho Legislature,in a2OL4 Joint Memorial (No. 10), noted that possible changes in such areas as flood control operations "could have a devastating impact on irrigation project reservoir supplies in ldaho." The Alliance doesn't share the alarm expressed in that Joint Memorial, but we believe ldaho and ldaho Power and ldaho Power's customers have a direct stake in how the CRTR is revised post-2024 and we believe the Commission should direct ldaho Power to address this issue in its 2017 lRP. As referenced above, the Alliance suggests that the Commission direct ldaho Power to address the issue of the social cost of carbon. lt will be difficult if not impossible to monetize the impacts of coal-fired generation on the environment, on utility customers, and on utility shareholders without such a calculation. The lack of precision in addressing SCC was understandably appropriate in excluding it from prior lRPs, but as we are seeing with utilities in our region and nationwide, the time has come for our electric utilities to include SCC calculations in their resource planning processes. We agree with the decision in the IRP to downsize the proposed Shoshone Falls upgrade (PP. 130-131). As we mentioned in our comments on ldaho Power's 2013 lRP, we believe a 50MW expansion at the Shoshone Falls Power Plant was unnecessary given that the power that would have been produced would have been produced at times when ldaho Power doesn't need the energy. We support ldaho Power's assertion that "While the analysis indicates some economic benefit from the incremental energy, the 50MW Shoshone Falls expansion cannot be linked to an IRP-determined resource need, as it provides little to no capacity or energy during peak summer load months." ln the IRP's discussion of Additional Firm Load (P.7911, there is a discussion of tdaho Power's large customers. ln the section on ldaho National Laboratory (P. 80), the IRP projects that the "forecast calls for loads to slowly rise though 202L, rise dramatically through 2024, and stay near that higher levelthroughout the remainder of the forecast period." lt does not indicate what might cause such a dramatic increase in load. We believe that the issue of the Hells Canyon Complex relicensing should be more thoroughly discussed in the 2017 lRP. lt is clear that the amount of relicensing costs that will be rate-based is huge, but for purposes of power planning it would be useful for customers to have a greater understanding of how the relicensing process is moving forward and (understanding this is an IRP docket and not a rate case) how it may impact customers. The Alliance would appreciate the Commission directing ldaho Power to supply additional information, to the extent it can, on its plans for possible participation in one of the West's energy imbalance markets. The IRP addresses ElMs on P. L9, and as the 2017 IRP takes form more information should be available. The narrative on the ldaho Strategic Energy Alliance (P. 13) is incomplete and should be updated. As of the submittal of this lRP, the ISEA board had not convened a meeting in 10 more than a year. The ISEA task force infrastructure is for the most part inactive, and the ISEA's meetings in 2015 have been conducted without public notice. Allof this renders the narrative relating to ISEA dated and inaccurate. CONCLUSION The Snake River Alliance appreciates this opportunity to submit these comments in IPC-E-15-L9. We particularly appreciate the facilitation of the IRPAC meetings by Phil DeVol and Mark Stokes and the entire IRPAC team on both the demand side and supply side of ldaho Power's operations. We have ongoing concerns about the coupling of developing the B2H transmission project and the apparent corresponding retirement of the Valmy coal units in Nevada. We would oppose any proposal to develop additional natural gas generation in the event the B2H timeline continues to be delayed, and in any event we will continue to advocate for a prompt retirement of the first Valmy unit by 2019 and a timely retirement of the second unit no later than 2025. The Alliance appreciates the challenge ldaho Power confronted in developing an IRP in such an uncertain federal regulatory environment, particularly regarding the Clean Power Plan. We also want to reiterate that there currently are no feasible methods to eliminate or reduce CO2 emissions from existing coal-fired power plants, and that is something that we hope the Commission acknowledges in the event tdaho Power intends to continue operations of its existing coalfleet. lt is our hope that in its expected acceptance order in this IRP that the Commission continues to make clear its previously stated concerns about further utility investments in coal assets, as such investments will likely be rigorously opposed. As we press for accelerated retirements of utility-owned coal assets, the Alliance is mindful of the need to address the issue of potential "stranded assets" owned by our utilities. As the Commission demonstrated in IPC-E-12-09 regarding the Boardman balancing account, however, the issue of stranded assets is not one that is insurmountable. Finally, we are grateful for the leadership of ldaho Power CEO Darrel Anderson and his admonition to the IRPAC that members address these often-difficult issues in a frank and respectful manner. Respectfu lly submitted, Ken Miller Clean Energy Program Director Snake River Alliance L7 208 344-9L6L kmiller@snakeriveralliance.org www.sn a keriverall iance.org 12