20170427Avista Comments.pdf

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April26,2017
Via Ovemieht Mail
Diane Hanian
Idaho Public Utilities Commission
472 W. Washington Street
Boise, lD 83702
Re: Comments of Avista Corporation
IPUC Docket No. IPC-E-L7 -01
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Dear Ms. Hanian:
Please find enclosed for filing in the above-referenced docket an original and seven
copies of the Comments of Avista Corporation. Please let me know if you have any questions
regarding this filing.
Sincerely,
Michael G. Andrea
Senior Counsel
Enclosures
cc: Service List
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I have this 26th day of April, 2017, served the foregoing
comments in Docket No. IPC-E-17-01, upon the following parties, by mailing a copy
thereof, properly addressed with postage prepaid to:
Diane Hanian, Secretary
!daho Public Utilities Commission
Statehouse
Boise, lD 83720-5983
diane. hanian@puc. idaho.qov
Camille Christen
Daphne Huang
Deputy Attorneys General
ldaho Public Utilities Commission
472 W . Washington
Boise, lD 83702-0659
cam il le. ch risten@puc. idaho. qov
Peter Richardson
515 N. 27th Street
Boise, ldaho 83702
Tel. [phone]
peter@ richardsonadams. com
Paul Kimball
Sr. Regulatory Analyst
David Bender
Earthjustice
3916 Nakoma Road
Madison, W! 53711
dbender@.ea rthj ustice.org
Benjamin J. Otto
ldaho Conservation League
710 N.6th St.
Boise, lD 83702
botto@ ida hoconservation. orq
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Michael G. Andrea (ISB No. 8308)
Senior Counsel
Avista Corporation
1411 East Mission, MSC-33
Spokane, WA99202
Phone: [phone]
Facsimile: (509) 777 -5468
Email : [e-mail]
IN THE MATTER OF THE PETITION OF
IDAHO POWER COMPANY FOR A
DECLARATORY ORDER REGARDING
PROPER CONTRACT TERMS,
CONDITIONS, AND AVOIDED COST
PRICING FOR BATTERY STORAGE
FACILITIES
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l.i',li-ii,
Attorney for Avista Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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NO. rPC-E-17-01
COMMENTS OF AVISTA
CORPORATION
Idaho Power Company ("Idaho Power") initiated this proceeding by filing a
Petition for Declaratory Order ("Petition") seeking a ruling from the Idaho Public
Utilities Commission ("Commission") that battery storage facilities over 100 kW should
be treated in the same manner as variable resources. That is, such battery storage
facilities should receive a negotiated avoided cost rate determined by the integrated
resource plan ("IRP") methodology and utilities should only be required to offer a
contract with a two year term.l In Order No. 33729, the Commission issued notice that
the above-captioned proceeding will be processed by modified procedure and established
deadlines for submitting comments. Pursuant to Order No. 33729, Avista, as an affected
utility, submits the following comments:
t Petition at 2.
Page - I COMMENTS OF AVISTA CORPORATION
I.
COMMENTS
There is a Real and Substantial Controversy that is Properly Raised by
Idaho Power in its Petition for Declaratory Order
In its Petition, Idaho Power notes that the Commission has jurisdiction to issue
declaratory orders ifthere is an actual orjusticiable controversy that is real and
substantial, definite and concrete, touching the legal relations of parties having adverse
legal interests.2 Idaho Power further notes that the Commission may clarify any order on
its own motion.3 Idaho Power asserts that "[t]here is a real and substantial controversy as
to the proper application of this Commission's implementation of PURPA with regard to
specific requests and actual and existing facts, applicable to the Proposed Battery Storage
Facilities."a
In its comments, Franklin Energy Storage Projects ("Franklin Energy") asserts
that Idaho Power is not seeking a declaration of legal rights, but rather is requesting that
the Commission reconsider its prior orders. Accordingly, Franklin Energy argues that a
Petition for Declaratory Order is not the proper vehicle for Idaho Power to make its
request.
Franklin Energy is incorrect. The issue raised by Idaho Power in this proceeding
is whether output provided by a battery storage facility that is fueled by output from a
solar facility should be classified, and treated in the same manner, as a solar QF or
whether the output from such battery storage facility should be treated in the same
2 Petition at 5 (citing Title 6l of the Idaho Code and the Idaho Uniform Declaratory Judgments Act of 1933
and quoting Order No. 33667 at pp. 5-6).
3 Petition at 6 (citing RP 325).
4 Petitoin at 7 . The Proposed Battery Storage Facilities are the five proposed projects identified in Idaho
Power's Petition at footnote l.
Page - 2 COMMENTS OF AVISTA CORPORATION
manner as non-variable QFs. This issue presents a real and substantial controversy that is
properly raised in Idaho Power's Petition.
II. Battery Storage Facilities, Like Other QFs, Should be Classified Based on the
Primary Enerry Source (Fuel) Used to Energize Such Facilities.
The Federal Energy Regulatory Commission ("FERC") has suggested that energy
storage facilities such as the proposed battery storage facilities may be QFs.5 Contrary to
the Proposed Battery Storage Facilities' assertions that "[t]he sole source of electric
power and energy provided to the purchasing utility will be the electro-chemical reaction
giving rise to the discharge of electric power and energy by the battery"6, FERC found in
Luz that:
the primary energy source of the battery system is not the electro-chemical
reaction. Rather, it is the electric energy which is utilized to initiate that reaction,
for without that energy, the storage facility could not store or produce the electric
energy which is to be delivered at some later time."7
For a battery storage facility to be a QF, there must be a demonstration by the QF "that
the primary energy source behind the electric energy input to the facility is biomass,
waste, renewable resources, geothermal resources, or any combination thereof or that the
use of oil, natural gas or coal contribute no more than 25 percent as a source of that
energy and that such use, if any, is for an appropriate purpose.s
5 Luz Development and Finance Corp.,5l FERC fl 61,078 at6l,170-61,172 (1990) ("Luz"). As noted by
Idaho Power, the determination of whether a facility is or is not a QF is within the exclusive jurisdiction of
FERC and therefore whether any specific energy storage facility is or is not a QF is not an issue for the
Commission in this proceeding. Accordingly, Avista does not take any position in this proceeding as to
whether the proposed battery storage facilities are or are not QFs.6 E g., Franklin Energy Storage One, LLC's FERC Form 556 at page 9 (attached to Idaho Power's Petition
at Attachment l).
7 Luz, 5l FERC at 6l,17l.
8 Luz, 5l FERC at 61,170; see also l8 C.F.R. S 292.204(b).
Page - 3 COMMENTS OF AVISTA CORPORATION
The Proposed Battery Storage Facilities at issue here have each submitted
substantially similar FERC Forms 556 for self-certification as QFs. Each of the proposed
battery storage project's FERC Form 556 states
The energy storage system that comprises the energy storage Qualifying Facility
is designed to, and will, receive l00o/o of its energy input from a combination of
renewable energy sources such as wind, solar, biogas, biomass, etc. The current
initial design utilizes solar photovoltaic (PV modules mounted to single-axis
trackers to provide the electric energy input to the Qualifying Facility's battery
storage system. The PV modules are planned to be connected in series/parallel
combinations to solar inverters, rated approximately 2.5 MWac each, (subject to
change).e
Although each of the Proposed Battery Storage Facilities have attempted to convolute the
issue by suggesting that the primary energy source will be a combination of renewable
energy sources, it is clear that the primary energy source for each of the Proposed Battery
Storage Facilities will actually be solar energy.
Absent a demonstration by each of the Proposed Battery Storage Facility that the
primary energy source for each such project is something other than solar energy, to the
extent that such facility is a QF, the facility is properly characterized, and treated, as a
solar QF. Accordingly, the Commission should issue an order that, to the extent that such
facilities are QFs, the Proposed Battery Storage Facilities are properly characterized, and
treated, as solar QFs.
e See FERC Forms 556 attached to Idaho Power's Petition at Attachment I
Page - 4 COMMENTS OF AVISTA CORPORATION
III.To the Extent the Commission Does Not Find that the Treatment of Battery
Storage QFs Should be Based on the Primary Enerry Source for Such QFs,
the Commission Should Initiate a Generic Proceeding to Determine the
Appropriate Treatment of Such QFs.
As discussed above, to the extent that a battery storage facility is a QF, it should
be classified and treated in the same manner as the facilities that provide the primary
energy source for such QFs. That is, if the primary energy source of a proposed battery
storage facility is wind or solar facilities, the proposed battery storage facilities should be
treated in the same manner as wind or solar QFs. If, however, the Commission
determines that battery storage facilities that use wind or solar facilities as their primary
energy source should not be treated in the same manner as the primary energy source, the
Commission should initiate a generic proceeding to determine the appropriate treatment
of battery storage facilities. Further, to ensure utility customers are protected during such
proceeding, a moratorium should be placed on energy storage QFs with nameplate
capacities above the 100 kW threshold until the completion of the generic proceeding.
CONCLUSION
As discussed herein, to the extent that battery storage facilities are QFs, such
facilities should be classified, and treated, in the same manner as the facilities that
provide the primary energy source for such battery storage facilities. To the extent that
the Commission does not find in this proceeding that battery storage facility QFs should
be treated in the same manner as the facilities that provide the primary energy source for
such battery storage facilities, Avista requests that the Commission initiate a generic
proceeding to determine the appropriate treatment of such facilities. Finally, if the
Commission initiates a generic proceeding on this matter, the Commission should place a
Page - 5 COMMENTS OF AVISTA CORPORATION
moratorium on energy storage QFs with nameplate capacities above 100 kW to protect
utility customers during such proceeding.
Respecttully submitted this 26th day of April 2017.
AVISTA CORPORATION
Michael G. Andrea
Senior Counsel
Page - 6 COMMENTS OF AVISTA CORPORATION