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HomeMy WebLinkAbout20150821Comments.pdfDAPHNE HUANG DEPUTYATTORNEYGENERAL idy^\, ,; .: .i ..1 i.,x r.{nIDAHOPUBLICUTILITIESCOMMISSION ' ',,i..,,. PO BOX 83720 (208) 334-0318 IDAHO BAR NO. 8370 Street Address for Express Mail: 472 W. WASHINGTON BOISE, IDAHO 83702-5918 Attorney for the Commission Staff BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF rDAHO POWER ) COMPANY'S APPLICATTON FOR APPROVAL ) CASE NO. IpC-E-1s-20 OF CAPACITY DEFICIENCY TO BE USED FOR) AVOIDED COST CALCULATIONS. ) COtvtMENTS OF THE) coTvTMISSIoN STAFF ) COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its Attorney of record, Daphne Huang, Deputy Attomey General, submits the following comments. BACKGROUND On July 2,2015, Idaho Power Company filed an Application with the Commission for an Order approving the capacity deficiency period to be used for the Company's avoided cost calculations under the Public Utility Regulatory Policies Act (PURPA). The Company asked that the Application be processed under Modified Procedure. Under PURPA, electric utilities must purchase electric energy from qualif,,ing facilities (QFs) at rates approved by the applicable state regulatory agency - in Idaho, this Commission. l6 U.S.C. $ 824a-3; Idaho Power Co. v. Idaho PUC,155 Idaho 780,789,316 P.3d 1278,1287 (2013). The purchase or "avoided cost" rate shall not exceed the "'incremental cost'to the purchasing utility of power which, but for the purchase of power from the QF, such utility would STAFF COMMENTS AUGUST 2I,2OI5 either generate itself or purchase from another source." Order No. 32697 at 7 , citing Rosebud Enterprises v. Idaho PUC, 128 Idaho 624, 917 P .2d 781 ( I 996); 1 8 C.F.R. $ 292.101(bX6) (defining "avoided cost"). In calculating avoided cost, the Commission found it "reasonable, appropriate and in the public interest to compensate QFs separately based on a calculation of not only the energy they produce, but the capacity that they can provide to the purchasing utility." Order No. 32697 at 16. As to the capacity calculation, the Commission found it appropriate "to identify each utility's capacity deficiency based on load and resource balances found in each utility's IRP." Id. The Commission elaborated : In calculating a QF's ability to contribute to a utility's need for capacity, we find it reasonable for the utilities to only begin payments for capacity at such time that the utility becomes capacity deficient. If a utility is capacity surplus, then capacity is not being avoided by the purchase of QF power. By including a capacity payment only when the utility becomes capacity deficient, the utilities are paying rates that are a more accurate reflection of a true avoided cost for the QF power. Id. at 21. The Commission directed that "when a utility submits its [RP] to the Commission, a case shall be initiated to determine the capacity deficiency to be utilized in the SAR Methodology." Id at 23. The Commission also stated "utilities must update fuel price forecasts and load forecasts annually - between IRP filings. . . . We find it reasonable that all other variables and assumptions utilized within the IRP Methodology remain fixed between IRP filings (every two years)." Id. at 22. ln2014, the Commission confirmed July 2021 as Idaho Power's capacity deficiency period for use in the incremental cost IRP methodology. Order No. 33159 at 9. Idaho Power states it o'currently utilizes a first capacity deficit of July 2021." Application at 2. AIso, the Company notes that it filed its 2015 IRP (Case No. IPC-E-15-19) with the Commission on June 30,2015. According to Idaho Power, its 2015 IRP "identifies the first capacity deficit occurring in July 2025." Id. Idaho Power's Application includes Table 1, which "shows a first capacity deficiency of 14 megawatts [(MW)] occurring in July 2025." Id. at3. According to the Company, this "includes 461 MW of PURPA solar that was under contract when the analysis of Table 1 was completed for the 2015 IRP." .Id However, after Table I was developed in the 2015 IRP, "four PURPA Energy Sales Agreements ("ESAs") were terminated due to failure of the projects to STAFF COMMENTS AUGUST 2I,2OI5 perform" per their terms and provisions. 1d., citing Case Nos. IPC-E-14-28, IPC-E-14-29,IPC-E- 14-30, and IPC-E-14-31. Idaho Power provides that the "total amount of capacity for these four terminated ESAs was 141 MW." Id. at3-4. Idaho Power's Application also includes Table 2, which shows anotpdated peak-hour surplus/deficit chart," reflecting removal of the 141 MW of PURPA. Id. at 4. Idaho Power states, "Removal of the 141 MW of terminated PURPA solar projects results in a first capacity deficit of 47 MW in July 2024, one year earlier than that shown in Table 1 and the 2015 IRP." Id. The Company asks that o'a first capacity deficit of July 2024be utilized for avoided cost calculations for both the SAR and IRP methodologres." Id. STAFF ANALYSIS The 2015 IRP indicates that a first capacity deficiency of l4 MW occurs in July 2025 (See boxes in Attachment A). Since the 2015 IRP analysis was completed, however, four PURPA projects have been terminated, totaling 141 MW. The removal of the 141 MW of solar projects affects two variables in the IRP analysis: Cogeneration and Small-Power Producers (CSPP), and Market Purchases (See triangles in Attachment A). This results in a first capacity deficiency of 47 MW that occurs in July 2024. For each of the removed projects, a capacity credit (approximately 53%) is applied to 141 MW nameplate capacity to reach a final, effective reduction of 74 MW. Therefore, the CSPP (PURPA) values in the analysis are reduced by 74 MW. In addition, the Market Purchases values need to increase, within the transmission limit, to compensate for the decrease in CSPP (PURPA) generation. As a result, the new first capacity deficiency occurs in July 2024. Staff Table 1 shows the effects of the four solar projects on the CSPP, the Market Purchases, and the Monthly Surplus/Deficit. Staff Table 1. Effects of Four Solar Pojects Original Values for July 2024 (MW) New Values for July 2024 (MW) CSPP (PURPA)405 405-74=331 Market Purchases 239 239+74=313>266 (2 66 :transmission capacity available) Monthly Surplus /Deficit 0 74-(266-239):47 STAFF COMMENTS AUGUST 2I,2OI5 Based on the revised capacity deficiency, Staff updated the Surrogate Avoided Resource (SAR) Model, and calculated new avoided cost rates (see Attachment B). RECOMMENDATIONS Staff has reviewed Idaho Power's updated capacity deficiency as a result of the removal of 141 MW of solar projects, and confirms that the new first capacity deficiency occurs in July 2024. Staff also updated the SAR Model and the avoided cost rates, and recommends that the Commission approve the new rates to reflect the removal of the 141 MW of solar projects. Respectfully submitted this 2, (f day of August 2015. Technical Staff: Rick Sterling Yao Yin i : umisc:comments/ipce I 5.20djhrpsyy comments Daphne Deputy Attorney General STAFF COMMENTS AUGUST 2I,2OI5 Attachment A IPC-E-1s-20 Staff Comments 08/21n5 go8flt{ g(,sfa {r} o66Ohra.r .' o60all .i.i.ocrGrfiE (, ''l*,,.,a--6bri, rf €€(r(r6 o ct ara8E oato88 go8.t (\t . o(rtoodtr {n o(t *oo r '.i : r,. .l! t.(,orE tt.rr: t*,3e:,5AE!t5{, {,lr!r -a.85EEooo5rra833:tXB5&Gta,2 I -V a, Eo<5crlGi?*TI 9., SoooliNri scto6(ro(rOr)( H mooooo66tdc{ r(rr)0(,0ct()Nk)s isctooo(,cr 6o u'l *EI $ooo a(toc500ss oo6000?c'u) t.5o cooooooot-6oi octoooo96f.{ t{ol o c, o (rcr ()rt6qrr (rtao()(f,{o()oadi c'UQqETE6Ekit*E,ilcsF9-!l\at2!, l' ?;i F E-?E E ()grui $$ 3!*.8E;5otr-65 E3I!5h6OOF-!!rdd)e1 (,uoooooNaacrarfl ora 60 oo 00aat (l .OFr,{ na rl ofl t\Oaa r(,cl at oo6ca Ocr (40 r!o o<loo6rl rrOC)(rC,fl OO(roO r)oaoo 11 mooo 06Fo(: 0l-S(rCf oi-{CtO s@(!oo 60ci()()ra s(,t(r(,t{ (r0(re)c)rt eEEOP.tfrs<l_L "E.i*,8C!.vcat E A! frac9os3 Ldfi3r,9r:c i oI ts!(ri;,!*4frfrruCZ()() oo6 aor, cr flclq .r)3* vse.4 Facr(!(!fr tr0tsctHI 38ryt crs rto ssr.t c{ omttO*, fl fio6l-..{ o{f! o@o60O-<)6C!r\tlF oo€ioO7..o),\arr\F o€tooO-t-dl-fOCI OOOEO6--oo6r*r-fl o6*er6d,F.!ofl. r- q) rtt €i.'(rh(lS?ONa:l. r- C) N O@-!le,$-6O0l-Ad s@o@oO-(,O&N-a{ ooc)*oFhoq c), cl oooooe6&rce q)o(,il6OF{iO(}l*0f{ &OrJl!g{0r{,d}&hA* o-@o& 1' o o-aa(3t\ 'r' S r,(! @--aot. o_@c) r . {"ol-6',('eOr,.d{ ,'"| aoo.4 q' (o O- ,'r - .rt ! roo --f-.r, .'.f FFO o 1; l\ - F O@ r, @ o:oo'l,ig -'_ N ooI'o;, (-l flsOl- ' oJ t' .;;t-t....: .t 1 .: c-t ;i ("1 ..t o-u3o. o.o. () $oo ot :E e oF {,u,BU =I(oul 9r,ourleiEll sgl]+-sEt![ 1r] aIEai{,rtB}5:*5155!BBt6Xcvriao-orrtoxXOxlxtsFuizuo-u, 3oooc; o ato oLpioJ o a ot! o 6e € (, U t4r5ttoaa Ig G (,uL ov,o&,1,o GIr. 0tro E rn (3(\t EI ao oa vG (lU IA fr. 4 go E!(J G IDAHO POWER COMPANY AVOIDED COST RATES FOR WIND PROJECTS xxxx,2015 $/MWh New Contracts and Replacement Contracts without Full Capacity Payments Eligibility for these rates is limited to projects {00 kW or smaller. LEVELIZED NON-LEVELIZED SONTRACI LENGTH /YFARS\ ON-LINE YEAR CONTMCT YEAR NON.LEVELIZED RATES2015 2016 2017 2018 2019 2020 1 2 a 4 5 6 7II 10 11 12 13 14 15 16 17 18 19 20 33.36 33.70 33.92 34.31 35.17 36.24 37.33 38.34 39.27 40.31 41.32 42.29 43.14 43.87 44.52 45.12 45.70 46.26 46.81 47.35 34.06 34.23 34.68 35.72 36.96 38.1 I 39.30 40.30 41.44 42.52 43.55 44.45 45.22 45.89 46.50 47.10 47.70 48.27 48.83 49.39 34.42 35.03 Jb.Jb 37.84 39.23 40.44 41.51 42.73 43.88 44.98 45.92 46.71 47.40 48.03 48.65 49.2s 49.84 50.42 51.01 51.60 2E AO 37.46 39. '17 40.68 41.96 43.0s 44.33 45.54 46.68 47.65 48.45 49.14 49.77 50.39 51.01 51.61 52.20 52.81 53.42 54.00 39.37 43.0541.14 44.4642.63 45.6143.86 46.5844.90 47.9446.22 49.20 47.44 50.39 48.61 51.3749.58 52.1450.36 52.7951.04 53.3951.66 53.99 52.27 54.6152.88 55.22 53.49 55.82 54.09 56.46 54.70 57.1055.33 57.7255.93 58.3655.55 59.04 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 2040 33.36 34.06 34.42 35.69 39.37 43.05 46.00 48.19 49.99 54.59 57.23 59.91 60.85 61.00 61.68 62.91 64.98 67.39 69.48 71.93 75.31 78.62 80.55 84.88 90.07 95.53 Note: These rates will be further adjusted with the applicable integration charge. Note: The rates shown in this table have been computed using the U.S. Energy lnformation Administration (ElA)'s Annual Energy Outlook20l5,releasedApril 14,2015. SeeAnnual EnergyOutlook20'l5,Table3.SEnergyPricesbySector-Mountainat http: //www. eia. gov/forecasts/aeo/tables-ref . cf m#supplemenU IDAHO POWER COMPANY PA9C 1 Attachment B rPc-E-ls-20 Staff Comments 08/21115 Page I of 5 IDAHO POWER COMPANY AVOIDED COST RATES FOR SOLAR PROJECTS xxxx,2015 $/MWh New Contracts and Replacement Contracts without Full Capacitv Pavments Eligibility for these rates is limited to projects 100 kW or smaller. LEVELIZED NON.LEVELIZED }ONTMCI LENGTH lYFAEIS\ ON.LINE YEAR CONTRACT YEAR NON.LEVELIZED RATES2015 2016 2017 2018 2019 2020 1 2 a 4 b 7 8 I 10 11 12 13 14 15 16 17 18 19 20 33.36 33.70 33.92 34.3 1 35.1 7 36.24 37.33 38.34 39.27 42.40 45.1 3 47.54 49.62 51.40 52,97 54.37 55.67 56.88 58.00 59.05 34.06 34.23 34.68 35.72 36.96 38.19 39.30 40 30 43.86 46.90 49.54 51,80 53,71 55.37 56.85 58.22 59.48 60.66 61.76 62.82 34.42 35.03 36.36 37.84 39.23 40.44 41.51 45.58 48.97 51.87 54.30 56.34 58.09 59.65 61.07 62.39 63.61 64.76 65.85 66.91 35.69 37.46 39.17 40.68 41.96 43.05 47.74 51.52 54.68 57.29 59.44 61.26 62.87 64.34 65.69 66.95 68.12 69.25 70.33 71.34 39.37 43.05 41.14 44.4642.63 45.6143.86 46 5844.90 53.1250.36 57.89 54.58 61.62 58.01 64.5260.77 66.8263.00 68.7164.88 70.3566,51 71.8368.00 73.20 69.37 74.47 70.64 75.66 71 .83 76.8172.97 77.9374.08 78.9675.10 79.9976.11 81 .02 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 2040 33.36 34.06 34.42 35.69 39.37 43.05 46.00 48.1 I 49.99 85.12 88.22 91.35 92.75 93.37 94.51 96.23 98.78 101 .69 104.28 107.25 111.14 114.98 117.44 122.31 128.05 134.07 Note: These rates will be further adjusted with the applicable integration charge. Note: The rates shown in this table have been computed using the U.S. Energy lnformation Administration (ElA)'s Annual Energy Outlook20l5,releasedApril 14,2015. SeeAnnual EnergyOutlook20l5,Table3.SEnergyPricesbySector-Mountainat http://www. eia. gov/forecasts/aeo/tables_ref . cf m#su pplemenU IDAHO POWER COMPANY Page 2 Attachment B IPC-E-15-20 Staff Comments 08121115 Page 2 of 5 IDAHO POWER COMPANY AVOIDED COST RATES FOR NON.SEASONAL HYDRO PROJECTS xxxx,2015 $/MWh New Contracts and Replacement Contracts without Full Capacity Pavments Eligibility for these rates is limited to projects smaller than 10 aMW. LEVELIZED NON.LEVELIZED ]ONTRACT LENGTH /YFARS\ ON.LINE YEAR CONTRACT YtrA P NON-LEVELIZED AATtrS2015 2016 2017 2018 2019 2020 1 2 J 4 5 b 7I 9 10 11 12 13 14 15 tb 17 18 19 20 33.36 33.70 33.92 34.3 1 35.17 36.24 37.33 38.34 39.27 42.20 44.76 47.03 48.99 50.67 52.1s 53.47 54.70 55.85 56.91 t7 0, 34.06 34 23 34.68 35.72 36.96 38.1 I 39.30 40.30 43.63 46.47 48.96 51.08 52.88 54.45 55.85 57.14 58.34 59.46 60.51 61 52 34.42 35.03 36.36 37.84 39.23 40.44 41.51 45.30 48.48 51.20 53.49 55.40 57.06 58.52 59.86 61.1 1 62.27 63.36 64.41 65.42 35.69 37.46 s9.l7 40.68 41.96 43.05 47.41 50.94 53.91 56.35 58.37 60.09 61.60 62.98 64.27 65.46 66.58 67.65 68.69 69.66 39.37 43.05 41.14 44.4642.63 45.6143.86 46.5844.90 52.6249.96 57.0453.89 60.53 57.10 63.25 59.69 65.39 61.78 67.1763.54 68.7065.07 70.1066.47 71 .4067.77 72.6068.97 73.7470.11 74.8471.20 75.9'l72.26 76.90 73.24 77.89 74.21 78.89 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 2040 33.36 34.06 34.42 35.69 39.37 43.05 46.00 48.19 49.99 82.16 85.21 88.30 89.65 90.23 91.33 92.99 95.50 98.36 '100.90 1 03.82 107.66 111.45 1 13.86 1 18.67 124.37 130.33 Note: The rates shown in this table have been computed using the U.S. Energy lnformation Administration (ElA)'s Annual Energy Outlook20l5,releasedApril 14,2015. SeeAnnual EnergyOutlook20l5,Table3.SEnergyPricesbySector-Mountainat http: //www. eia. gov/forecasts/aeo/tables-ref . cfm#supplemenU IDAHO POWER COMPANY Page 3 Attachment B IPC-E-15-20 Staff Comments 08l2ll15 Page 3 of 5 IDAHO POWER COMPANY AVOIDED COST RATES FOR SEASONAL HYDRO PROJECTS xxxx,20{5 $/MWh New Contracts and Reolacement Contracts without Full Caoacitv Pavments Eligibility for these rates is limited to projects smaller than 10 aMW. LEVELIZED NON.LEVELIZED CONTRACT LENGTH ryFARS'I ON-LINE YEAR CONTRACT YtrAP NON-LEVELIZED FIATtrS2015 2016 2017 2018 2019 2020 1 2 3 4 5 b 7I o '10 11 12 13 14 15 16 17 18 19 20 33.36 33.70 33.92 34.31 35.1 7 36.24 37.33 38.34 39.27 43.62 47.35 50.60 53.40 55.79 57.90 59.77 61.48 63.06 64.52 65.88 34.06 34.23 34.68 35.72 36.96 38.1 9 39.30 40.30 45.28 49.45 53.04 56.08 58.66 60.90 62.89 64.70 66.36 67.89 69.31 70.65 34.42 35.03 36.36 37.84 39.23 40.44 4 t.51 47.24 5't.94 55.89 59.19 61.96 64.33 66.43 68.32 70.05 71.64 73.12 74.51 75.83 35.69 37.46 39.17 40.68 41.96 43.05 49.72 55.01 59.35 62.91 65.85 68.34 70.52 72.47 74.26 75.89 77.41 78.84 80.20 81.46 39.37 43.05 41.14 44.4642.63 45.6143.86 46.5844.90 56.1552.78 52.9558.74 68.16 63.50 72.20 67.30 75.38 70.38 78.0072.95 80.2475.18 82.2477.17 84.0578.99 85.7080.64 87.2382.18 88.69 83.63 90.0785.01 91.3686.29 92.6187.53 93.84 201 5 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 33.36 34.06 34.42 35.69 39.37 43.05 46.00 48.19 49.99 1 02.93 106.29 109.69 I'l 1.35 112.24 1 13.67 'l 15.66 I 18.50 121.70 124.58 127.84 132.04 1 36.1 9 1 38.96 144.14 150.21 156.55 Note: A "seasonal hydro project" is defined as a generation facility which produces at least 55% of ils annual generation during the months of June, July, and Augusi. Order 32802. Note: The rates shown in this table have been computed using the U.S. Energy lnformation Administration (ElA)'s Annual Energy Outlook 2015, released April 14, 2015. See Annual Energy Outlook 2015, Table 3.8 Energy Prices by Sector-Mountain at http://www. eia. gov/forecasts/aeo/tables-ref. cfm#supplemenU IDAHO POWER COMPANY Page 4 Attachment B IPC-E-15-20 Staff Comments 08l2lll5 Page 4 of 5 IDAHO POWER COMPANY AVOIDED COST RATES FOR OTHER PROJECTS xxxx, 2015 $/MWh New Contracts and Replacement Contracts without Full Capacity Payments Eligibility for these rates is limited to projects smaller than 10 aMW. LEVELIZED NON-LEVELIZED CONTRACI LENGTH ryEARS) ON-LINE YEAR CONTRACT YtrAEI NON.LEVELIZED PATtrS2015 2016 2017 2014 2019 2020 I 2 3 4 5 6 7II 10 11 12 IJ 14 '15 16 17 18 19 20 33.36 33.70 33.92 34.31 35.1 7 36.24 37.33 38.34 39.27 41.6s 43.76 45.65 47.28 48.69 49.92 51.04 52.O7 53.05 53.97 54.83 34.06 34.23 34.68 3s.72 36.96 36.19 39.30 40.30 42.99 45.32 47.38 49.1 5 50.65 51.95 53.12 54.21 55.23 56.1 9 57.1 0 57.98 34.42 35.03 36.36 37.84 39.23 40.44 41.51 44.55 47.',t4 49.39 51.28 52.87 54.24 55.46 56.59 57.65 58.65 59.59 60.50 6't.39 35,69 37.46 39.1 7 40.68 41.96 43.05 46.51 49.36 51.80 53.8'l 55.47 56.89 58.1 5 59.31 60.40 61.42 62.38 63.32 64.23 65.09 39.37 43.0541.14 44.4642.63 45.6143.86 46.5844.90 51.2548.86 54.75 52.01 57.57 54.62 59.78 56.74 61.5258.45 62.9759.89 64.2461.16 65.4062.33 66.5063.43 67.53 64.45 68.51 65.43 69.47 66.39 70.42 67.32 71.30 68.19 72.1969.06 73.09 2015 2016 2017 2018 20't9 2020 2021 2022 2023 2024 2025 2026 2027 2028 2429 2030 2031 2032 2033 2034 203s 2036 2037 2038 2039 2040 33.36 34.06 34.42 35.69 39.37 43.05 46.00 48.19 49.99 74.11 77.05 80.02 81.25 E1.70 82.68 84.22 86.59 89.32 91.7 4 94.51 98.22 't01.87 104.14 108.81 1 14.36 120.18 Note: "Other projects" refers to projects other than wind, solar, non-seasonal hydro, and seasonal hydro poects. These "Other projects" may include (but are not limited to): cogeneration, biomass, biogas, landfill gas, or geothermal projects. Note: The rates shown in this table have been computed using the U.S. Energy lnformation Administration (ElA)'s Annual Energy Outlook 2015, released April 14,2015. See Annual Energy Outlook 2015, Table 3.8 Energy Prices by Sector-Mountain at http://www. eia- gov/forecasts/aeo/tables_ref . cfm#supplemenU IDAHO POWER COMPANY Page 5 Attachment B IPC-E-15-20 Staff Comments 08121115 Page 5 of 5 CERTIFICATE OF SERVICE I HEREBY CERTIFY THAT I HAVE THIS 2I't DAY OF AUGUST 2015, SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF IN CASE NO. IPC-E-15-20, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE FOLLOWING: DONOVAN E WALKER REGULATORY DOCKETS TDAHO POWER COMPANY PO BOX 70 BOrSE rD 83707-0070 E-mail: dwalker@idahopower.com dockets@ idahopower. com RANDY ALLPHIN TESS PARK IDAHO POWER COMPANY PO BOX 70 BOrSE ID 83707-0070 E-mail : rallphin@idahopolvg{.com tpark@idahopower.com CERTIFICATE OF SERVICE