20131107Comments.pdf

Comments of the Snake River Alliance inl'9,,'r,- -' _-.: (, !11On ldaho Power Company's 2013 lntegrated Resource Plan (lRP) )r i li
Submitted by
Ken Miller, Clean Energy Program Director, Snake River Alliance
November 6,20L3
The Snake River Alliance appreciates the opportunity to submit these comments to the ldaho
Public Utilities Commission in docket IPC-E-13-15, ldaho Power Company's 2013 lntegrated
Resource Plan (lRP), on behalf of its members, many of whom are customers of ldaho Power.
The Snake River Alliance (Alliance) is an ldaho-based non-profit organization, established in
L979 to address ldahoans' concerns about nuclear waste and safety issues. ln early 2007, the
Alliance expanded the scope of its mission by launching its Clean Energy Program. The Alliance's
energy work includes advocacy for renewable energy resources in ldaho; expanded energy
efficiency, demand response and other demand-side management programs offered by ldaho's
regulated utilities and the Bonneville Power Administration; and development of local, state,
regional, and national initiatives to advance sustainable energy policies.
The Alliance commends ldaho Power for its ongoing 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 Idaho Power were to more actively promote or publicize its IRPAC meetings, more of its
customers might attend and participate. Given that most of tdaho Power's customers cannot
attend these meetings due to their work schedules, we recommend that Company also more
creatively explore methods to increase public participation. Nonetheless, ldaho Power deserves
credit for allowing the public to participate in a more conversational manner during the course
of the IRPAC meetings. The process of developing an IRP seems to improve with each Plan.
The Alliance recommends that the Commission accept ldaho Power's 2013 lRP, but not without
modifications as outlined below. We are disappointed that ldaho Power did not have an
opportunity to adjust this IRP to 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 overbuilt its
supply-side resources while compromising some of its demand-side resources (such as demand
response programs) as a result. We believe that emphasizing thermal power production
resources while shutting down demand response resources sends the wrong message to
customers, and raises questions about the Company's commitment to reducing its greenhouse
gas emissions.
PREFERRED PORTFOTIO
With exceptions that will not come as a surprise the Commission, The Alliance believes that a
portfolio that relies primarily on market purchases, chiefly from the proposed Boardman-
Hemingway transmission line, and also added demand response programs to alleviate future
peak demand issues is appropriate - at least for the time being and assuming the Company is
committed to an increase of its demand response programs. For reasons outlined below, the
Alliance opposes ldaho Power's proposed investments of ratepayer dollars in its coal plants
without knowing whether future state or federal health or environmental regulations may
render one or more of the plants uneconomic to operate.
One of the Alliance's concerns with this IRP is whether ldaho Power has sufficiently planned for
the possibility that Boardman-Hemingway is energized after 20L8, and whether it will have a
capacity deficit within the timeframe outlined in the lRP. Aside from investing more ratepayer
dollars in natural gas plants in the event Boardman-Hemingway is not available as planned, we
do not see from ldaho Power a comprehensive plan to replace anticipated market purchases
associated with B2H in this lRP.
The Alliance understands that the data used in the development of an IRP can quickly become
obsolete, but in this case the change is so significant that we recommend the Commission order
an update well in advance of the next IRP in 2015. That is particularly important given the
Company's intent to invest further in coa! assets that we believe may become uneconomic to
operate before the next lRP.
COAL PLANTS
As the Commission is aware, the Alliance does not support continued ldaho Power investments
in its coal assets unless it has negotiated a strategy to eventually divest those plants in a
prudent and well-planned manner. That being the case, we do not support the proposed
commitment to install dry sorbent injection emission-controltechnology, nor selective catalytic
reduction emission-controltechnology at ldaho Power coal assets at North Valmy Unit 1 and
Jim Bridger Units 3 and 4. Our position is outlined in our testimony in IPC-E-13-L6, and we will
not burden the Commission with it here. However, events subsequent to the filing of IPC-E-13-
15 as well as IPC-E-13-16 have shown that the coa! plant assumptions contained in IPC-E-13-15
have changed so much that they require another analysis. The likelihood of the retirement of
one or more coal units is now greater than anticipated in this lRP, and should be reflected in an
update demonstrating how ldaho Power anticipates acquiring the resources needed to meet
load in the event its coal plants become uneconomic to operate relative to other resources.
ln addition, ldaho Power's coal plant analyses assume that any replacement resource from a
retired coal plant must be a similarly sized plant located where the coal plant was located.
What we have seen in other states and regions is that such generation, when required, can be
deployed in a strategic distributed generation fashion. ldaho Power has not attempted to
analyze this possibility, as far as we can determine from this analysis. We do not see evidence
that distributed generation was thoroughly examined as a potential resource.
This lRP, like those before it, attaches a carbon adder to the assumptions in its resource stack.
While sometimes useful, such an adder excludes the use of another mechanism, such as a cap
on carbon emissions, which may be imposed instead of an adder in order to reduce carbon
emissions. Should such a reduction mechanism be employed rather than an adder, a carbon
adder becomes less relevant and the actual emissions from a power plant become the issue
that utilities may face. This possibility is not addressed in this lRP. Furthermore, this !RP fails to
adequately assess the probability of NV Energy's divestment of its coal assets, including the
North Valmy plant co-owned with ldaho Power. Despite the fact that this !RP is a two-year plan,
it cannot be assumed that ldaho Power will have a North Valmy coal-plant partner in two years,
nor can it assume that North Valmy will be in operation during the period covered by this plan.
TRANSMISSION
The Alliance has recognized the potential value of the Boardman-Hemingway transmission
proposal for several years and our position is unchanged, as the project has the potential to
allow for a greater flow of renewable energy between markets in the Pacific Northwest,
particularly with ldaho Power being summer peaking utility and utilities West of the Cascades
generally experiencing their peaks during the winter.
ldaho Power's 2013 IRP assumes Boardman-Hemingway may be energized in 2018. We were
concerned after reading on P. 58 of IDACORP's most recent Form 10-Qfiled with the U.5.
Securities and Exchange Commission that:
"The permitting-related delays and changing environmenta! requirements will result in
increased project costs, with the magnitude of the increase depending largely on the
length of the delay and the line route ultimately approved. The regulatory outcomes
associated with the siting process can also affect the ultimate feasibility and cost
effectiveness of the project."
And on P. 42 that:
"As it relates to the Boardman-to-Hemingway project, of which tdaho Power is the
project manager, the environmental requirements for, and application of environmenta!
regulations (particularly relating to sage grouse) to, the siting process have [sic] changed
significantly since commencement of the project, increasing permitting costs. ln light of
the delays and siting impediments that have occurred and are expected to continue,
ldaho Power estimates that the in-service date for the Boardman-to-Hemingway line
would be in 2020 or beyond. The Boardman-to-Hemingway line remains ldaho Power's
preferred resource alternative. Given project delays, however, ldaho Power is
conducting an enhanced review of other power supply resource options as it continues
progress on the Boardman-to-Hemingway line."
This appears to add to the uncertainty regarding the Boardman-Hemmingway project. With
regard to the Gateway West transmission line - or at least ldaho Power's anticipated share of
it, other utilities (PacifiCorp and the Bonneville Power Administration) have expressed a need
for additional transmission capacity, but ldaho Power has not yet demonstrated a compelling
reason why its customers should participate in the venture. Gateway West has been fraught
with regulatory and other problems since its inception and continues to be. Unless its proposed
developers can demonstrate a need for Gateway West that directly benefits ldaho Power
customers, and unless siting and similar issues are resolved by the state of Oregon, we
recommend that the Commission continue to treat it as an uncommitted resource.
Combined, the uncertainty surrounding both of these transmission projects is cause for
concern. The Commission should be concerned about the timeliness of the completion of the
Boardman-to-Hemingway !ine, and the impacts of what a delay until "2020 or beyond" would
mean to this IRP and its anticipated resources to meet new load growth.
ENERGY REQUIREMENTS
On Nov. 4,2OL3,ldaho Power filed Case No. IPC-E-13-21, seeking "Approval of the Capacity
Deficiency to be Utilized in the Surrogate Avoided Resource ("SAR") Avoided Cost
Methodology."
ldaho Power's 2013 IRP projects a capacity deficit beginning in2OL6, which is also reflected in
the Application in IPC-E-13-21. However, the Application in this case states on P. 4 that:
"Updating the peak-hour deficits shown above in Table 2, which are updated for the most
current load and cogeneration and small power forecast, with up to 440 MW of ldaho Power
demand response programs results in the peak-hour deficits shown below in Table 3, with the
first deficit occurring in July ol2O2L."
The Alliance recommends that the Commission direct tdaho Power to reconcile the difference
between the peak-hour deficit of 2016 as referenced in this !RP and also the projected peak-
hour deficit of 2021reflected in IPC-E-13-21. As the Commission and ldaho Power recognize,
there is a significant difference between the two, and while it could not have been reflected in
the original 2013 IRP filing, the IRP must be adjusted to reflect the information contained in
Table 3 (Peak-Hour Surplus/Deficit Charts) referenced above.
SHOSHONE FALLS UPGRADE
While we generally support zero-carbon supply side resources that are developed in a way that
minimizes environmental impacts, the Shoshone Falls Upgrade raises questions. We're aware
that this project has been under consideration for several years. However, ldaho Power is not
deficient in energy and certainly not in hydroelectric power, as it accounts for nearly one-half of
its generation portfolio. As this IRP states many times, however, ldaho Power expects deficits
during its summertime peak demand periods. The power plant at Shoshone Falls is not normally
a reliable summertime peak power producer due to summertime diversions for agricultural
purposes, so we are unsure about the value of this investment to ldaho Power customers at the
present time and would like to see an analysis of how a new turbine at Shoshone Falls helps
ldaho Power meet its peak requirements.
SOLAR POWER
The Alliance believes ldaho Power has miscalculated both the energy value but also the
economic value of solar energy. The Commission is well aware of the differences between
tdaho Power and its customers and the solar PV community. The Alliance echoes the comments
made by both in this case as well: The Commission must take note of the changes in this
industry and its impacts on future electricity planning. More important, the Commission must
evaluate the models employed by ldaho Power in its cost allocations for purposes of this lRP.
We believe ldaho Power's failure to calculate the costs of customer-installed solar PV,
particularly on residential rooftops, renders the resource evaluations as reflected the tables on
Pages 66 and 67 (as well as elsewhere in a narrative form).
Commissioners know this issue was discussed at length during meetings of the IRPAC to
prepare this !RP. Commissioners should also know that there was no resolution during these
discussions. We recommend that the Commission direct stakeholders, including our investor-
owned utilities, to reconcile these differences. Any attempts to construct a resource stack that
is not based on what we consider adequate information (cost of customer-installed and
customer-financed resources such as such as solar PV generation brings not only the IRP but
also projections for various energy resources into question.
DEMAND SIDE MANAGEMENT
The Alliance appreciates that ldaho Power has made progress in expanding its energy efficiency
programs. However, we are concerned about ldaho Power's commitment (or lack thereof)to
the funding of the Northwest Energy Efficiency Alliance (NEEA) and its work across the region.
The Commission deserves and should expect a response from ldaho Power regarding its
intentions for NEEA funding.
RISK
The Snake River Alliance is concerned about the impacts that ldaho Power's proposed coa!-
plant upgrades will have on its customers, and those concerns are expressed in more detail in
our testimony in IPC-E-13-L6. We believe the risks associated with this investment proposal -
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.
Respectful !y su bmitted,
&*lq,'url
Ken Miller
Clean Energy Program Director]
Snake River Alliance
208344-9L6L
[e-mail]
www.snakeriveralliance.org