20170911Comments.pdf

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C. Tom Arkoosh, ISB No.2253
ARKOOSH LAW OFFICES
1802 W. Bannock Street, Suite 900
P.O. Box 2900
Boise,ID 83701
elephone: [phone]
Facsimile: [phone]
Email: [e-mail]
Attorneys for IdaHydro
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
APPROVAL OF THE CAPACITY
DEFICIENCY TO BE UTILIZED FOR
AVOIDED COST CALCULATIONS
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Case No. IPC-E-I7-12
IDAHYDRO'S RESPONSE TO
COMMENTS OF THE COMMISSION
STAFF
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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COMES NOW the Idaho Hydroelectric Power Producers Trust, an Idaho Trust, d/b/a
IdaHydro ("IdaHydro"), by and through its counsel of record, C. Tom Arkoosh of Arkoosh Law
Offices, and hereby provides the following response to the Comments of the Commissi:on Stoff,,
filed September 6, 2017 in the above matter:
Commission Stafff'Staff'] concurs with Idaho Power Company ["Idatro Power"] that the
Integrated Resource Plan ["IRP"] shows tdaho Power will be capacity deficient in2026 instead
of 2024 because ldatro Power will have more transmission capacity than historically
contemplated, thus more market access. This conclusion is factually confiary to the text of the
IRP. This conclusion is conceptually contrary to the Public Utilities Policy Act ["PURPA"].
This ftesponse seeks clarification from the Commission of these two topics.
Staff writes at page 3 of its Comments:
By comparing average loads and average arnounts of capacity from supply
resources between 2024 and 2026, Staffwas able to determine that the over-riding
cause for the two-year shift was a 103%o increase in market purchase availability.
IDAHYDRO'S RESPONSE TO COMMENTS OF THE COMMISSION STAFF - Page I
The increase comes from two sources: (l) an additional 130 MW of import
transmission capacity into the south side of its system by closing Valmy Unit I in
2019; and (2) an additional 80 MW of incremental transmission capacity through
the Company's ldaho/Montana transmission pathway.
At page 59 of the IRP, however, Idaho Power writes regarding the Montana-ldaho
transmission pathway:
The Montana-Idatro transmission path consists of the Antelope-Anaconda 230-kV
and Goshen-Dillon l6l-kv transmission lines. The Montana-ldaho path is also
capacity-limited during the summer months as ldaho Power, BPA, PacifiCotp,
and others move energy south from Montana into ldatro.
Similarly, it also appears that the Valmy plant currently occupies all the transmission
capacity from the south of the system. Its decommission thus opens only space that is currently
fully occupied and does not clear additional transmission capacity. At pages 68-69 of the IRP,
Idaho Power writes:
The ldaho-Nevada transmission path is co-owned by ldaho Power and NV
Energy, with ldaho Powbr having full allocation of northbound capacity and NV
Energy having full allocation of southbound capacity. As noted earlier in this
chapter, the northbound capacity of the path is fully subscribed with Idaho
Power's share of the North Valmy generation plant.
In its evaluation of North Valmy retirement options, Idaho Power has reviewed
the potential to import wholesale energy across the ldaho-Nevada transmission
path following retirement of North Valmy generating capacity. Idaho Power has
principally participated in the Mid-Columbia wholesale power market to the
northwest and considers the availability of wholesale energy for import across the
Idaho-Nevada path as less certain. In particular, the frequent import of wholesale
energy from Nevada is likely to encounter scarcity and/or costly energy.
Therefore, while Nevada is not considered a viable source for abundant wholesale
energy, it may have potential to soruce seldom-needed capacity during peak
loading periods. For this reason, Idaho Power is assuming for the 2017 IRP that
the retirement of North Valmy generating capacity can be adequately replaced
with infrequent wholesale capacity imports across the Idaho-Nevada transmission
path.
Idaho Power recognizes the uncertainty of assuming wholesale capacity imports
from Nevada can replace North Valmy generating capacity. The viability of the
Idatro-Nevada path can be evaluated as the company continues to transition away
from coal in a measured and responsible manner. Idaho Power expects to develop
IDAHYDRO'S RESPONSE TO COMMENTS OF THE COMMISSION STAFF -PageZ
greater understanding of the viability of the Idatro-Nevada path with participation
in the western EIM beginning in spring 2018. As it continues its evaluation, Idaho
Power recognizes the assumption that wholesale capacity imports from Nevada
can replace North Valmy generating capacity may prove unfounded, and future
IRPs may need to reflect such a change.
Thus, the IRP appears to trend toward less "capacity" from future market and
transmission trends, not more.
More importantly, however, it is submitted that the "market purchase availability" does
not supplant the capacity that PURPA anticipates Qualifying Facilities ("QFs") bring to a
utilities system when ratemaking. Commissioner Raper queried in her comments to the Federal
Energy Regulatory Commission:
If investment in base load resources is required, not because the utility needs
additional generation, but because it must balance intermittent "must take" QF
energy, how are costs being avoided?
Comments of the Honorable Kristine Raper, Commissioner, Idaho Public Utilities Commission,
Technical Conference on Implementation Issues Under lhe Public Utility Regulatory Policies Act
of 1978, FERC Docket No. ADl6-16-000. [Emphasis in original.]
Conversely, if no investment in base load resources is required because QFs supplant
such capacity, and the current Idaho Power base load balances intermittent "must take" QF
energy without additional investment, Idaho Power's new capacity costs are being avoided by
QF capacity. Thus, new QFs should have a capacity payment. If "market purchase availability"
in turn supplants compensation for QF capacity as well as utility base load capacity, QFs may
never receive capacity compensation as contemplated by PURPA even though QFs displace new
base load investment and capacity. The accurate inquiry to determine when QFs should be fairly
paid for the capacity they bring to the system is not whether ldaho Power has access to an
outside market, i.e., transmission capacity, but instead whether QF energy displaces new Idaho
IDAHYDRO'S RESPONSE TO COMMENTS OF THE COMMISSION STAFF - Page 3
Power capacity without the need for new investment by the utility to balance intermittent 'onlust
take" QF energy.
Because this dockel depends entirely upon the outcome of the pending IRP docket (lPC-
E-I7-ll), it is respectfully submitted this docket be stayed until the IRP docket comes to final
order.
,ilh,DATED this \\ day of September,2017.
ARKOOSH LAW OFFICES
C. Torrr
Attorney for ldal{ydro
IDAIIYDRO'S RESPONSE TO COMMEN'|S OIr THE COMMISSION STAFF - Page 4
CERTIFICATE OF MAILING
_{rv\I I'IERIIBY CERI'IFY that on thc l\' day of September, zAn. I scrved a true and
correct copy of the foregoing docurnent(s) upon the lbllorving person(s), in the nlanner irrdicatcd
9rieinal and 7 copies to:
Diane Hanian
Comrnission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise,lD 83702
Copies to:
Donovan E. Walker
Regulatory Dockets
Idaho Power Company
PO Box 70
Boise, ID 83707
Michael Darrington
Iirrergy Contacts
Idaho Power Company
I'}O llox 70
Boise, ID 83707
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E-mail
d iane.hanian puc. idaho. gov
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C. Tom r\rkoosh
IDAHYDRO'S RESPONSE TO COMMENTS OF l'l{E COMMISSION STAFF * Page 5