20161129notice_of_application_order_no_33657.pdf

Office of the Secretary
Service Date
November 29, 2016
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMP ANY FOR A
CERTIFICATE OF PUBLIC
CONVENIENCE AND NECESSITY TO
CONSTRUCT SYSTEM IMPROVEMENTS
FOR WOOD RIVER VALLEY
CUSTOMERS
------------------
)
) CASE NO. IPC-E-16-28
)
) NOTICE OF APPLICATION
)
) NOTICE OF
) INTERVENTION DEADLINE
)
) ORDER NO. 33657
On November 8, 2016, Idaho Power Company filed an Application for a Certificate
of Public Convenience and Necessity (CPCN) to make system improvements and to secure
adequate and reliable service to customers in the Wood River Valley. Specifically, the Company
seeks a CPCN to construct a new (second) 138 kilovolt (kV) transmission line and related
facilities "to provide redundant service from the Wood River substation near Hailey into the
Ketchum substation." Application at 1-2. The Company asks that the CPCN permit the
particular line route and facilities identified in testimony accompanying the Application. Id. at 2.
The Company would like to start construction of the line in 2019 and have it in service by 2020.
Id. at 6. The Commission issues this notice of the Company's Application and sets a deadline
for interested parties to intervene in the case.
BACKGROUND
Idaho Power states it serves over 9,000 customers in the North Valley, which includes
the resort communities of Ketchum and Sun Valley, and the Sun Valley ski resort. Peak demand
in that area swells at the height of the tourist seasons in summer and winter, but especially
winter. Id. at 4. The risk of power outages -and economic impacts therefrom is heightened
when tourism activity and thus electrical demand are at their peak. Id. at 5.
Idaho Power states the North Valley is served by a substation in Ketchum and a
substation in Elkhorn Valley within the Sun Valley city limits. The two substations "are
supplied by a single 12.4 mile 138 kV transmission line from the Wood River substation in
Hailey" that was constructed with wooden poles built in 1962. Idaho Power states that access
and thus repairs to the transmission line have been impeded due to residential development,
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 33657
rough terrain, and aged construction roads. Id. at 4. According to the Company, impeded access
can result in sustained outages. Id. at 4-5.
Idaho Power typically initiates and constructs a second transmission source and
transformer in an area when peak load for the area's substations is projected to exceed 40
megawatts (MW). Id. For example, the Company is working on a second transmission project
in the Eagle and Star area, which peaks at 71 MW. Id. at 4-5. The Ketchum and Elkhorn
substations' peak load in the winter of 2007 was 634 MW. Id. at 4.
Idaho Power obtained a Certificate (No. 272) to construct a second transmission line
to the North Valley, and related facilities, in 1974. Id. at 6; Order No. 11315. In 1995, the
Company participated in public meetings about the proposed construction of a second
transmission line, including an open house for which it sent invitations to more than 8,000 Idaho
Power customers. Id. at 6. There was considerable public opposition to the proposal, based on
the route that the transmission line would take, aesthetic impacts, perceived health and safety
issues, and the requirement that the incremental cost of placing the line (in part or all)
underground be funded locally. Id. at 7. At the Company's request, the Commission cancelled
Certificate No. 272. Order No. 26107.
Idaho Power initiated a Community Advisory Committee ("CAC") in 2007 to
develop the Wood River Valley Electrical Plan, a comprehensive plan for future transmission
facilities in the Wood River Valley, including the North Valley area. Id. at 8-9. In 2011, the
CAC recommended that Idaho Power construct the second 138 kV transmission line. Id. at 9.
From 2012-2014, the CAC took additional input from the community, including the City of
Ketchum and the Ketchum Energy Advisory Committee, and re-affirmed the need for a second
energy path into the North Valley. Id. The Company states it has participated "in several
collaborative processes geared towards exploring the possibility of providing alternative sources
of energy in the North Wood River Valley." Id. at 10. Idaho Power contends that the costs of
alternative sources (such as diesel engine, gas turbines, and photovoltaic plus battery energy
storage systems) are significantly higher, and would be less reliable, than the line the Company
now proposes. Id.
According to Idaho Power, most parties in the affected communities generally agree
on the purpose and need for a redundant energy source. Id. The Company asserts that the Sun
Valley City Council "unanimously agreed that the redundant line project was necessary and vital
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 33657 2
for its community." Id. at 11. As of the Application's filing, the Company had not received a
response from Blaine County, but a final decision was anticipated by November 10, 2016. Id.
The City of Ketchum City Council met on October 3, 2016, and recommended that the Company
evaluate local distributed energy resources and microgrid options. Id.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that Idaho Power asserts the existing 138 kV radial
transmission line is aging and needs reconstruction. Id. at 12. According to the Company,
reconstruction of the existing line would result in "extreme disruption of service ... [ unless the
Company builds] either a redundant transmission line or a temporary line that would be removed
after construction." Id. at 16. Idaho Power states the proposed redundant 138 kV line will
increase reliability and avoid long-term disruption of service to the North Valley. Id. at 3. The
Company further asserts the proposed project is necessary "to meet its continuing obligation to
serve customers." Id. at 12.
YOU ARE FURTHER NOTIFIED that the Company believes, based on its
engagement with affected communities, that if the needed redundant energy source is achieved
by adding a transmission line, "a feasible route could be obtained and permitted, as long as at
least a portion of the line is underground." Id. at 3. The Company acknowledges, "[t]he parties
have been unable to reach agreement upon the funding and payment of any incremental cost
difference between an overhead, or least-cost alternative, and an underground, or higher-cost
build." Id. Idaho Power states it is in the process of acquiring the necessary permits, such as
applying for a right-of-way encroachment permit with the cities of Ketchum and Sun Valley in
2015, and a conditional use permit with Blaine County in 2016. Id. at 5-6.
YOU ARE FURTHER NOTIFIED that Idaho Power states it investigated four routes
that would provide the needed redundant energy source. Id. at 17. Each route would extend
overhead from the Wood River substation near Hailey, north along Highway 75 for about 7.5
miles, to the area near Owl Rock Road and south of the St. Luke's Medical Center. Id. at 18.
From there, north to the Ketchum substation, the routes would differ. Id. The routes are more
fully described in the testimonies of David Angell and Ryan Adelman ( attached to the
Application).
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 33657 3
YOU ARE FURTHER NOTIFIED that Idaho Power characterizes the four routes
using the following descriptions: (1) overhead transmission; (2) underground transmission; (3)
overhead distribution; and ( 4) underground distribution. Id. at 18-23. As to the overhead
transmission route, the Company asserts several reasons why it is not viable, including that "the
community is adamantly against [the] visual impacts." Id. at 18-20. About the underground
transmission route, Idaho Power states this is the option that CAC recommended, and estimates it
would cost between $30 million and $35.7 million. Id. at 20-21. As to the overhead distribution
route, the Application describes potential problems, and estimates it would cost between $29 .1
and $31.1 million. Id. at 21-22. Finally, about the underground distribution route, the Company
states it is substantially similar to the overhead distribution option, but with greatly reduced
visual impacts, and an estimated cost between $43.4 and $45.9 million. Id. at 22-23.
YOU ARE FURTHER NOTIFIED that Idaho Power asserts it "is not seeking any
specific rate recovery for the facilities involved herein at this time, and will do so in a proper rate
recovery proceeding in the future." Id. at 23. The Company seeks approval of a CPCN for the
underground transmission route recommended by the CAC (option 2, above). Id. at 23-24. In
addition, the Company asks "that the incremental cost difference between the overhead
distribution and underground transmission configurations be assessed to the cities of Ketchum
and Sun Valley and to Blaine County." Id. at 24. Idaho Power contends that "it is appropriate to
require those local government entities and communities to contribute the additional incremental
cost associated with the required line routing or underground facilities" where those entities and
communities "require that the facilities be constructed underground." Id. According to the
Company, "If the local government and communities do not bear that incremental additional
expense, Idaho Power's other customers will ultimately pay higher rates as a result of one
community's dissatisfaction with the aesthetics of overhead transmission facilities." Id.
YOU ARE FURTHER NOTIFIED that Idaho Power notes the Commission has
authority to order it to build new structures or upgrade and improve existing plant and structures
to secure adequate services or facilities. Idaho Code § 61-508; Application at 12. Before
constructing "a line, plant, or system," a public utility providing electrical service must obtain a
CPCN from the Commission ( establishing that the "public convenience and necessity" requires
it); but a CPCN is not required to extend lines, plant or system in an area already served by the
utility. Idaho Code § 61-526; Application at 13. Under Idaho Code § 61-526, whether the
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 33657 4
"public convenience and necessity does not require or will require" the construction or extension
of lines, plant or system, the Commission "may, after hearing, make such order and prescribe
such terms and conditions for the locating or type of the line, plant or system affected" as the
Commission finds just and reasonable. Idaho Code § 61-526; Application at 14.
provides:
YOU ARE FURTHER NOTIFIED that the Company notes Idaho Code § 67-6528
If a public utility has been ordered or permitted by specific order, pursuant to
title 61, Idaho Code, to do or refrain from doing an act by the public utilities
commission, any action or order of a government agency pursuant to titles 31,
50, or 67, Idaho Code, in conflict with said public utilities commission order,
shall be insofar as it is in conflict, null and void if prior to entering said order,
the public utilities commission has given the affected governmental agency an
opportunity to appear before or consult with the public utilities commission
with respect to such conflict.
Idaho Code § 67-6528; Application at 14. Idaho Power asserts that this statute gives the
Commission "the ultimate authority for determining whether the public interest, convenience,
and necessity requires the construction of certain facilities by expressly providing that land use
actions or orders of other government agencies or local governments that are in conflict with an
order of the Commission are null and void." Application at 14.
YOU ARE FURTHER NOTIFIED that the Application and attachments have been
filed with the Commission and are available for public inspection during regular business hours
at the Commission offices. The Application and attachments are also available on the
Commission's web site at www.puc.idaho.gov. Click on the "File Room" tab at the top of the
page, scroll down to "Open Electric Cases," and then click on the case number as shown on the
front of this document.
NOTICE OF DEADLINE TO INTERVENE
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in this matter
must file a Petition to Intervene with the Commission pursuant to this Commission's Rules of
Procedure 72 and 73, IDAPA 31.01.01.072 and -.073. All Petitions to Intervene must be filed
no later than 21 days from the service date of this Order. Persons desiring to present their
views without parties' rights of participation and cross-examination are not required to intervene
and may present their comments without prior notification to the Commission or the parties.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 33657 5
YOU ARE FURTHER NOTIFIED that the following persons are designated as Idaho
Power's representatives in this matter:
Donovan E. Walker, Lead Counsel
Tim Tatum, Vice President, Regulatory Affairs
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E-mail: dwalker(t_µidahopower.com
[e-mail]
dockets(lv,idahopower.com
YOU ARE FURTHER NOTIFIED that, once the deadline for intervention has
passed, the Commission Secretary shall prepare and issue a Notice of Parties. Once all parties
have been identified, the Commission will determine how best to process this case.
ORDER
IT IS HEREBY ORDERED that persons desiring to intervene in this matter shall file a
Petition to Intervene by 21 days from the service date of this Order. Once the deadline for
Petitions to Intervene has passed, the Commission Secretary shall prepare and issue a Notice of
Parties, and the Commission shall determine how best to process this case.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 33657 6
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of November 2016.
ERIC ANDERSON, COMMISSIONER
ATTEST:
O:IPC-E-16-28_djh
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 33657 7