20141006Comments.pdf

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McDevitt & Miller LLP
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P.O. Box 2564-8370L
Boise,Idaho 83702
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DeanJ. $oe) Millet
Celeste I( Millet
October 6,2014
Yia l{aad Delivery
JeanJewelt Secretary
Idaho Public Utilities Commission
472W. Washingon St.
Boise,Idaho 83720
Re: Intennountain Enetgy Partners, [-LC/[PC-E-14-22
Dear Ms.Jewell:
Enclosed fot filing in the above matter, please find an odginal and seven copies of Intermountain
Enetgy Partnets, T.T C's Cornments in Response to Idaho Powet Company's Application.
Kindly retum a file stamped copy to me.
Very Truly Yours,
cDevitt & Millet LLP
DJM/hh
Enclosutes
ORIGINAL
Dean J. Miller (ISB No. 1968)
MoDEVITT & MILLER LLP
420 West Bannock Street
P.O. Box 2564-83701
Boise, D 83702
Tel: [phone]
Fax: [phone]
i oe@mcdevitt-mill er. com
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201tr OCT -5 PH h: 05
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Attorneys for Intermountain Energt Partners, LLC
BEFORE THE IDAIIO PUBLIC UTILITIES COMMISSION
IN TIrE MATTER OF TrIE APPLICATION ) CASE NO. IPC-E-1,4-22
oF IDAHO POWER COMPANY )
CONFIRMING USE OF THE CAPACITY ) INTERMOUNTAIN ENERGY
DEFICIENCY PERIOD FOR THE ) PARTNERS, LLC'S COMMENTS
INCREMENTAL COST,INTEGRATED ) IN RESPONSE TO IDAHO
RESOURCE PLAII, AVOIDED COST ) POWER COMPAI\IY'SMETHODOLOGY. ) APPLICATION
Intermountain Energy Partners (IEP) petitioned to intervene in this proceeding on
September 22,2014 and the Commission granted intervention on October 1,2014. Order No.
331,46.IEP respectfully submits the following Comments in accordance the filing deadline of
October 6,2014 established by Order No. 33147.
The Commission Should Reject Use of the 2021Capacity Deficit Period
in Determining Avoided Costs Based on the IRP Methodology
IEP acknowledges that in OrderNo. 33084, Case No. IPC-E-13-21, the Commission
accepted the use of 400 MW of Demand Response programs in determining the resource
sufficiency period under the SAR methodology. Subsequent events, however, call into question
the accuracy of the assumed level of actual demand response dispatch. Following is Idaho
Conservation Leagues Production Request No. 3 and Idaho Power Company's Response in this
proceeding:
INTERMOLINTATN ENERGY PARTNERS, LLC'S COMMENTS IN RESPONSE TO IDAHO POWER
COMPANY'S APPLICATION- 1
"BElUESlLll9J: Based on Idaho Power's representations, submitted April 29,2014,
the Commission found the Company had enrolled 403 MW of demand response capacity
across three programs for the summer of 2014. Order No. 33084 at 4-5. For April 2014
through August 2014, please provide for each of the three demand response programs the
actual MW reduction, the dates each program was dispatched, and the duration of the
dispatch.
RESPONSE TO REQUEST NO.3: Idaho Power dispatched the Irrigation Peak
Rewards program three times this program season. Each event split the participants in
four groups, each experiencing a four hour duration. The groups were dispatched either
2-6 p.m.,3-7 p.m., 4-8 p.m., or 5-9 p.m. The preliminary estimate of total MW reduction
was 286 MW on J:u/ry 2; 294 NNV on July l0; and 27 5 MW on July 14 during the 5-6 p.m.
hour on each date when each ofthe groups overlapped.
Idaho Power dispatched the NC Cool Credit program three times this program season.
Each event's duration was three hours from 4-7 p.m. The preliminary estimate of total
MW reduction was 43 MW on July 14;33 MW on July 31; and 35 MW on August 1 1.
Idaho Power dispatched the Flex Peak Management program three times this program
season. Each event's duration was four hours from 4-8 p.m., except on August 13 the
event time was 3-7 p.m. The preliminary estimate of total MW reduction was 32 MW on
Jlu/ry 2;32 MW on July 13; and 25 MW on August 14."
The results shown in the above are not surprising. The DR programs IPCo cites as
placing the Company into sufficiency are single-year alrangements that have no effect on
sufficiency one way or another beyond the year contracted. If IPCo maintains that these contracts
do indeed affect capacity sufficiency for the period through 2021, then it must demonstrate to the
Commission some cofimensurate commitment on the part of IPCo and their counterparts to
engage throughout the sufficiency period claimed. And this it cannot do. Idaho Power
acknowledges this. [n response to ICL Production Request No. 4. IPCo states in part, "It is
possible that actual levels of demand response could vary from year to year over the 'the 2}-year
IRP forecast period' as referenced in Request for Production No. 4. d-actual amounts could be
less or could be more."
INTERMOLINTAIN ENERGY PARTNERS, LLC'S COMMENTS IN RESPONSE TO IDAHO POWER
COMPANY'S APPLICATION-2
There are good reasons for limiting the types of adjustments to IRP results between IRP
filings, which the Commission recognized in Order No. 32697, Case No. GNR-E-I1-03. For
example a potential consequence of allowing such short-term arrangements to be used to
establish sufficiency is that the Company could use annual purchases of capacity on short-term
markets to count toward sufficiency-making the entire sufficiency concept virtually moot.
Potentially more troubling is the ability for the Company to claim sufficiency at its will to avoid
QF projects-one month claiming sufficiency from contracts not signed, and the next month
disclaiming the potential of the resource in some future year to enable the Company to contract
for resources of its choosing and avoid QF projects at will.
Accordingly, the sufficiency effect of the DR contracts should be limited to the period
over which those contracts are in effect. Counting them toward sufficiency in years for which no
contracts exist is overly speculative. It is not correct that entering into QF contracts with capacity
payments harms Idaho ratepayers in the intervening years because there is no proof of
sufficiency for those years today, and presumably the cost of entering into demand response
contracts that extend over those future years would likely result in higher costs and/or fewer
megawatts than were arranged for the 2014 season.
IPCo could alternatively approach the Commission to reduce the avoided costs payments
by requesting demand response resources be recognized as the avoided resource. That would be
an interesting case, but has not been broached by IPCo. Instead, the Company requests a finding
of sufficiency for speculative resources that have not been contracted for the duration of the
purported sufficiency period. The Commission should reject IPCo's request to extend the
sufficiency period, or alternatively to require the Company to show long term contractual terms
sufficient to show that these resources are not speculative in the 2016 to 2021 peiod.
INTERMOT'NTAIN ENERGY PARTNERS, LLC'S COMMENTS IN RESPONSE TO IDAHO POWER
COMPANY'S APPLICATION.3
In addition, IEP broadly supports the Idaho Conservation League's Comments in this
matter. Specifically, IEP agrees with ICL's contention that the application does not conform to
Order 32697, allowing for updating "long-term contract commitments" and other variables that
do not include short-term contracts. Variables not included in the list are to be held constant
between IRP filing. The Commission should hold that the resources cited in IPCo's Application
are not consistent with the variables allowed to be changed between IRPs.
Again, this is not merely a minor technical /semantic issue because longer term
conkactual agreements with the demand response resource providers could result in prohibitively
high costs to IPCo or fewer megawatts contributing to the sufficiency period. IPCo's contracts
should not be considered because they are not consistent with Order 32697, and if they are
considered, should not be allowed to contribute their fulI contracted megawatts. The latter
because the fulI amount would likely not be able to be contracted over the longer period, but also
because the contribution to sufficiency is likely less than the nominal contract quantities.
As noted above, IPCo's Response No. 3 to ICL's First Production Request shows the
combined contribution to meeting peak demand significantly less than the nominally contracted
amounts in the 2013 exercise of demand response resources.
IEP supports the inclusion of cost effective resources, including demand response in
meeting the state's capacity and energy needs. However, the contracts cited in IPCo's
Application simply do not meet the Commission's requirements for inclusion in the process of
updating data between IRPs. IPCo could relatively quickly remedy that situation by concluding
agreements through July 2021. Failing that, the Company simply does not cite sufficiency
resources in its Application. Accordingly, the Commission should reject the application and
INTERMOUNTAIN ENERGY PARTNERS, LLC'S COMMENTS IN RESPONSE TO IDAHO POWER
COMPAIIY'S APPLICATION-4
encourage IPCo to pursue longer term resources such as demand response and qualifying
facilities to extend its sufficiency period.
Conclusion
Bas'ed on the reasons and authorities citied herein, the Commission should reject use of
rhe202l capacity deficiency period for determining avoided cost rates based on the IRP
methodology.
Respectfully submitted.
DATED this [^l day of October,2014.
INrrnuouNtmv ExBncy Pnnrunns, LLC
Attornqt for Intermountain Energt Partners, LLC
INTERMOUNTATN ENERGY PARTNERS, LLC'S COMMENTS IN RESPONSE TO IDAHO POWER
COMPAIYY'S APPLICATION.S
CERTIFICATE OF SERVICE
I hereby certify that on ,t " fufauy of Octobe r,2014,I caused to be served, via the
method(s) indicated below, true and correct copies of the foregoing document, upon:
Jean Jewell, Secretary
Idaho Public Utilities Commission
47 2 W est Washington Street
P.O. Box 83720
Boise,lD 83720-0074
i ean..i [e-mail]. eov
Kristine Sasser
Deputy Attorney General
Idaho Public Utilities Commission
47 2 W est Washington Street
P.O. Box 83720
Boise,lD 83720-0074
kris. [e-mail]. eov
Donovan E. Walker
Randy C. Allphin
Regulatory Dockets
Idaho Power Company
1221 West Idaho Street
P.O. Box 70
Boise,ID 83707
dwalker@idahopower. com
rallphin@idahopower. com
dockets@idahopower. com
Idaho Conservation League
c/o Benjamin J. Otto
710 N. 6th St.
Boise,Idaho 83702
botto@i dahoconservation. or*
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INTERMOLINTAIN ENERGY PARTNERS, LLC'S COMMENTS IN RESPONSE TO IDAIIO POWER
COMPANY'S APPLICATION-6