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DONOVAN E. WALKER
Lead Couneel@
May 6, 2016
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-16-11
Update to Solar lntegration Rates and Charges - ldaho Power Company's
Application and Testimony
Dear Ms. Jewell:
Enclosed for filing in the above matter please find an original and seven (7)
copies of ldaho Power Company's Application.
Also enclosed for filing are nine (9) copies each of the Direct Testimony of Philip
B. DeVol and Michael J. Youngblood. One copy of each of the aforementioned
testimonies has been designated as the "Reporter's Copy." !n addition, a disk
containing Word versions of Mr. DeVol's and Mr. Youngblood's testimonies is enclosed
for the Reporter.
lf you have any questions about the enclosed documents, please do not hesitate
to contact me.
DEW:csb
Enclosures
LL€
Donovan E. Walker
1221 W. ldaho St. (83702)
PO. Box 70
Boise, lD 83707
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalker@ idahopower. com
Attorney for ldaho Power Company
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION TO UPDATE
SOLAR INTEGRATION RATES AND
CHARGES.
RECEIVED
2016 HnY -6 PH 3: I lr
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. !PC-E-16-11
APPLICAT!ON
In accordance with RP 052, ldaho Power Company ("ldaho Power" or
"Company") hereby respectfully requests the ldaho Public Utilities Commission
("Commission") authorize ldaho Power to update its solar integration rates and charges
consistent with its completed 2016 solar integration study ("Study" or "2016 Solar
Study").
!n support of this Application, ldaho Power represents as fo!!ows:
I. INTRODUCTION
1. On February 11,2015, the Commission approved a settlement stipulation
("Settlement Stipulation") which implemented solar integration rates and charges for
ldaho Power based upon the Company's 2014 solar integration study, its first solar
integration study. Case No. IPC-E-14-18, Order No.33227. The solar integration rates
APPLICATION - 1
and charges were set forth in a new tariff Schedule 87, Variable Generation lntegration
Charges, at the incremental cost of solar integration for each 100 megawatts ("MW") of
solar nameplate penetration. The Settlement Stipulation acknowledged that there were
disagreements with respect to the methodology used in the 2014 solar integration study,
and that Idaho Power would initiate a second solar integration study, to be completed as
expeditiously as possible with the goal of not exceeding 12 months. Settlement
Stipulation, p. 3. The Settlement Stipulation provides guidance regarding the conduct of
the second solar integration study and sets forth a list of issues for consideration in that
study. ld., pp.34. The Settlement Stipulation states that the second solar integration
study should utilize a Technical Review Committee ('TRC"), and anticipated the
participation of commission Staff from both the ldaho Public Utilities Commission and
the Public Utility Commission of Oregon, the appropriate personnel from ldaho Power,
and a technical expert designated by each of the parties to the Settlement Stipulation.
/d., p. 3.
2. ldaho Power initiated the first communications to parties for the 2016
Solar Study in January 2015, following the execution of the Settlement Stipulation by
the parties. The process for the 2016 Study started with formation of the TRC.
Subsequent to the Commission's February 11,2015, approval of the Settlement
Stipulation, the TRC was selected and a kick-off phone conference was held on March
6, 2015. The intervening parties from the Settlement Stipulation (ldaho Conservation
League, Sierra Club, and Snake River Alliance) requested the participation of Cameron
Yourkowski, Renewable Northwest, and Michael Milligan, Nationa! Renewable Energy
Laboratory ("NREL"), on the TRC. ldaho Power requested the participation of Brian
Johnson, University of ldaho; Clint Kalich, Avista Utilities; and Kurt Myers, ldaho
APPLICATION - 2
National Laboratory. Rick Sterling from the ldaho Public Utilities Commission and
Brittany Andrus and John Crider from the Public Utility Commission of Oregon
participated as observers throughout the process of the 2016 Study and the TRC
activities. During the 2016 Study, Barbara O'Neill became the NREL representative on
the TRC. However, NREL funding did not permit its active TRC participation through
the entire process, although ldaho Power continued to include NREL on electronic
correspondence through study completion. A TRC Study Plan ("Study Plan") was
developed and finalized by May 28, 2015, and the Study was subsequently conducted
during the remainder of 2015 according to that Study Plan. The Study Plan is found in
the Appendix to the 2016 Solar lntegration Study Report ('2016 Study Report") at page
44. The TRC was involved from the outset and throughout the entire process of
developing the Study Report. Prior to finalizing the Study Report, the TRC was
provided with a draft report for its review and comment.
II. 2016 SOLAR INTEGRATION STUDY AND REPORT
3. ln support of its Application, ldaho Power presents its current 2016 Study
Report as Attachment 1 to this Application. The Direct Testimony of Philip B. DeVol,
filed contemporaneously with this Application, discusses the 2016 Study and
development of the Study Report. The 2016 Study was initiated in January 2015 and
the Study Report was completed in April 2016.
4. 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. ln general terms, the average cost of integrating solar generation
increases as the amount of nameplate solar generation on the electrical system
APPLICATION - 3
increases. Failure to calculate and properly allocate solar integration costs to solar
Public Utility Regulatory Policies Act of 1978 (.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.
5. As stated in Mr. DeVol's testimony, the 2016 Study determined solar
integration costs for four solar build-out scenarios at installed capacities of 400 MW, 800
MW, 1,200 MW, and 1,600 MW. ldaho Power currently has 320 MW of solar generation
under contract to be on-line by the end of 2016. The Study utilized geographically
dispersed build-out scenarios with solar generation located across the Company's
service territory at Parma, Murphy Flats, Boise, Grand View, Orchard, Bliss, Twin Falls,
and Aberdeen. Pages 3 through 6 of the 2016 Study Report provide additional
information regarding the build-out scenarios. The 2016 Study Report shows the solar
integration costs as indicated in the following tables:
Average lntegration Cost Per MWh
(2016 dollars)
Suild-out Scenarios 0-400 MW 0-800 MW 0-1,200 MW 0-1,600 MW
ntegration Cost $0.27 $0.57 $0.69 $0.85
lncremental lntegration Cost Per MWh
(2016 dollars)
III. IMPLEMENTATION OF SOLAR INTEGRATION CHARGES
6. The Direct Testimony of Michael J. Youngblood, filed contemporaneously
with this Application, sets forth the Company's request and proposal to update solar
APPLICATION - 4
renetration Level 0-400 MW 400-800 MW 800-1,200 MW 1,200-1,600 MW
ntegration Cost $0.27 $0.88 $0.92 $1.31
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integration rates and charges based upon the costs identified in the 2016 Solar Study.
ldaho Power presents updated incremental integration costs at each 100 MW of solar
generation penetration, as currently set forth in Schedule 87, extending out to 1,600
MW. The updated solar integration charges from the 2016 Study, along with the
corresponding solar integration charges currently in effect from the 2014 solar
integration study, are illustrated in the following graph:
lncremental Solar lntegration Charge Comparison
$5.00
200 300 400 500
Nameplate Penetration Level of Solar Capacity (MW)
As can be seen above, the results of the 2016 Study are substantially less than those of
the 2014 solar integration study. The 100 MW incremental cost of solar integration out
to the highest penetration contained in the 2016 Study (1,600 MW) is depicted on the
following chart:
-2014
Solar lntegration Study
-2016
Solar lntegration Study
APPLICATION - 5
Proposed lncremental Solar lntegration Charge
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300 400 500 600 700 800 900 1000 1100 1200 1300 1400
Nameplate Ponetration Level of Solar Capaci$ (MW)
7. Exhibit No. 4 to the Direct Testimony of Michael J. Youngblood contains
16 tables which would replace the tables in the current Schedule 87, Sheets 87-9
through 87-15, and would create new Sheets 87-16 through 87-24. The charges set
forth in Schedule 87 are the amounts to be deducted from avoided cost rates, beginning
in the year the project comes on-line, and based on the nameplate capacity penetration
level of solar generation at the scheduled operation date of the proposed project. The
integration charges set forth in Schedule 87 are formatted to appear in the same format
as that used by the Commission to post published avoided cost rates. Each penetration
level (each 100 MW increment) has its own table clearly identified and set forth in
Schedule 87 and discloses both the levelized integration charge as well as the non-
levelized stream of integration charge amounts listed by year. Just like published
APPLICATION - 6
avoided cost rates, the scheduled operation date for the proposed generation project is
used as the starting point in the table, and each yearly amount through the term of the
proposed contract is set out accordingly. ldaho Power proposes that the solar
integration costs in Schedule 87, Variable Generation lntegration Charges, be updated
to the corresponding values set forth in Mr. Youngblood's Exhibit No. 4 out to 1,600 MW
of penetration, as identified by the 2016 Solar Study.
IV. MODIFIED PROCEDURE
8. ldaho Power believes that a technical hearing is not necessary to consider
the issues presented herein and respectfully requests that this Application be processed
under Modified Procedure; i.e., by written submissions rather than by hearing. RP 201,
ef seg. Idaho Power has contemporaneously filed the Direct Testimony of Philip B.
DeVol and the Direct Testimony of Michael J. Youngblood in support of this Application.
Should the Commission determine that a technical hearing is required, the Company
stands ready to present the testimony at hearing in support of this Application.
V. COMMUNICATIONS AND SERVICE OF PLEADINGS
9. Communications and service of pleadings with reference to this
Application should be sent to the following:
Donovan E. Walker
Regulatory Dockets
ldaho Power Company
Michael J. Youngblood
Idaho Power Company
1221West ldaho Street (83702)
Boise, ldaho 83707
myou noblood@ idahopower.com
1221West ldaho Street (83702) P.O. Box 70
P.O. Box 70
Boise, ldaho 83707
dwa I ke r@ id a h op owe r. com
dockets@ idahopower. com
APPLICATION - 7
V!. REQUEST FOR RELIEF
10. As described in greater detail above, ldaho Power respectfully requests
that the Commission issue an order updating the Company's solar integration rates and
charges as set forth in Schedule 87, Yariable Generation Integration Charges, as
indicated by the 2016 Solar Study presented herewith.
DATED at Boise, ldaho, this 6th day of May 2016.
DONOVAN E. WALKER
Attorney for ldaho Power Company
APPLICATION - 8
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
cAsE NO. IPC-E-16-1 1
IDAHO POWER COMPANY
ATTACHMENT 1
2016 SOTAR INTEGRATION STUDY REPORT