19910131Order_No_23548.pdf

OEdfU tfia secrcrarv
-Sirvlce Date
JAN 31 1991
BEI'ONE THE II}AEO PT]BLIC IIMLTilES COMIUISSION
IN TEE MATIER OF lEE APPIJCATTON
OF IDAEO POWEB @MPAITY TORAPPROVALOFAIVWON
TARIF:F F1OB NON.IIILITTG72
CASE NO,IPGF-90-20
oRDER NO. 23548
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On December L7, 1990, Idaho Power Company (IPCo, Company) filed
an Application with the Idaho Public Utilities Cornrnission (Commission) for
approval of an Interconnection Tariff for non-utility generation (Tariff Schedule
No. 72). The Company rlequested an effective date of February 1, 1991.
Previously, the terms and conditions for interconnection of a non-utility
generation to the Company's transmissioD/distribution system have been indi-
vidually negotiated, although the terrns and conditions have proved to be substan-
tially sirnilsl. The Company contends that now that it has gai''ed experience in
this area, the development of a schedule directly addressing such interconnec-
tions will simplify the process and will errsure that all non-utility generators are
treated similarly under uniform and standard terms and conditions.
As proposed, the Schedule No. 72 Tariff applies to the construction,
upgrade, relocation, or removal of transrnission and./or distribution lines and
equipment necessary to safely interconnect a seller's generation plant (and seller
fui:nished facilities) to the Company's system. The tariff addresses cost
(valuation), construction and transfer of interconnection facilities, together with
associated payment obligation for such facilities, and related operation and
maintenance obligations and expenses. The tariff also addresses vested interest
refunds.
oRDER NO. 23548 1
{i
The Company has submitted direct testimony and exhibit in support of
its Application. The Company contends that it will primarily recover costs and
not realize any signifrcant revenues from implementation of its proposed tariff.
lhs Qemrnission by Notice of Modified Procedure issued December 27,
1990 indicated its intent to process the Company's Application by written
submission rather than by hearing. The deadline for filing written commenls or
protests with respect to the Qernrnission's proposed use of Modilied Procedure in
Case No. IPC-E-90-20 was Friday, Januar5r 18, 1991.
A W. BBOWNPRCIIESI
On January L7, 1991 A W. Brown (Brown) frled a timely protest
(cornplaint) in Case No. IPC-E-90-20.
Brown, the developer of Sunshine No. 2, a small power project located
in Lemhi County, disputes Idaho Power's contention that the Company will not
realize any significant revenues from irnplementatiou of its proposed Schedule 72
tariff. Characterizing Idaho Power's practices in this area as predatory and
monopolistic, Brown contends that the Company has realized siguificant profits
from charging inflated construction costs for interconnection facilities. By
overcharging with impunity and. escalating the cost of interconnect facilities,
Brown contends that the Qernpan/ is then able to increage related operation and
maintenance charges.
Brown further contends that many of the interconnection and
maintenance costs Idaho Power seeks to charge PURPA QFs are (to the extent
that such charges would be incurred by IPCo if the Qernpan/ was to generate the
power themselves) imperrnissible under federal statute and are not
"interconnection costs" as defined by FERC in 18 C.F.R. $ 292.101(7) and allowed
in $ 292.306.
oRDER NO. 23548 -2-
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To support his position, Brown cites a chrouology of events related to
his development of Sunshine No. 2 and the firrstration that he experienced in
dealing with IPCo. In opposing Schedule 72 Brown contends that it makes no
sense that IPCo be perrnitted to control the t1rye and sales prices of standard
switch gear. Brown also disputes the reasonableness of basing standard
operational and maintenance fees on equipment costs, when there is no proved
direct relationship.
Brown requests in its filing that the Qemrnigsien direct IPCo to pay
retribution for the difference between the stated $19,000 cost of switrhing
equipment installed in its Sunshine No. 2 facility in 1987 and the alleged $4,500
worth of such equipment plus what it characterizes as subsequent fees charged
by the Company for non-existent maintenance plus interest.
The Commission recognizes that Brown has raised what is ostensibly
valid criticism regarding aspects of the Qsrnpanf's proposed Schedule 72. The
Company is directed to file a written response to such criticism in this docket on
or prior to lhursdan February 28, 1991.
That portion of Brown's filing, however, which relates to its
development of Sunshine No. 2 and interconnection with Idaho Power and the
related claim of overchargrng and request for refund is more appropriately
handled in a separate complaint action. We will therefore copy the frling of A. W.
Brown into a separate docket, Case No. IPC-E-}L-L, and treat it as a formal
complaint, styled as A. W. Brown, Qemplainant v. Idaho Power Company,
Respondent. The Cornrnission Secretary is accordingly directed to issue a
Summons in the new case.
IEPT COMMENIS
On January 18, 1991 timely comrnents in Case No. IPC-E-90-20 were
filed by the Independent Energy Producers of Idaho (IEPI).
oRDER NO. 23548 -3-
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IEPI while expressing general agreement with the need for and the format of
IPCo's proposed Schedule 72, raises specific concerns and recorttrnends the
following changes:
Divesteit int€rest refrmd time period (fiye years) iB
artiEcially short.
IEPI can see no rationale, stated or implied, for
establishing a vested interest refund that is shorterthan the term of the underlying QF. Powei Sales
Agreement.
15e Company's neasune of the co6t of interonnedion
facilitiee is inappropriatc.IEPI contends that interconnection equipment for
purposes of O&M obligation and vested interest
refunds should be valued at actual construction
cost and not IPCo's determination of "construction
costs".
Dispoeition of interonnection equipment at the
termination of the contract
IEPI contends that the QF who has paid for theconstmction, installation, operation and
maintenance of interconnection equipment mayhave an interest in its disposition at thetermination of the Power Sales Agreement, aninterest which may vary rrnder different post
contract termination scenarios and which should bespecifically recognized and accoynrnodated for in
Schedule 72.
The recornrnendations of IEPI regarding proposed Schedule 72 are
deserving of consid.eration and response by Idaho Power Company. The Qernpan[
is directed to file a written response to IEPI's cornrnents in this docket on or prior
to Thursday, Febrnrar5r 28, 1991.
In consideration of the criticism and cornvnents filed by A. W. Brown
and IEPI in Case No. IPC-E-90-20, our decision requiring the Company to
respond, and because the Cornrnission itself desires additional time to consider
and deterrnine the issues presented in this Application, we find it reasonable to
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3.
oRDER NO. 23548 -4-
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suspend implementation of the proposed Tariff for a period of thirty (30) days
plus five (5) months from the proposed effective date of Febmary 1, 1991, or until
such earlier time as the Cornrnission may enter its order. Reference lda.ho Code
$ 61-623.
The Cornrnission reserves judgment on the appropriateness- of
processing the Company's Application under Modified Procedure, i.e., by written
submission rather than by hearing. Reference IDAPA 31.4.23.4.
ORDEB
In consideration of the foregoing, IT IS HEREBY ORDERED that the
proposed implementation of an interconnection tariff for non-utility generation
(Tariff Schedule No. 72) iD, Case No. IPC-E-90-20 should be, and hereby is,
suspended for a period of thirty (30) days plus five (5) months from Febmary 1,
1991, or until such earlier time as the Cornrnission may issue an Order accepting
or rejecting or modiffing the Application in this matter.
IT IS FIIRTIIER ORDERED that Idaho Power Company respond to the
frlings of A. W. Brown and Independent Energy Producers of Idaho as more
particularly described above on or prior to THU&SDAY, E:EBBUABY 28, 1991.
0RDER NO. 23548 -5-
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DONE by Order of the Idaho Public Utilities Qernrnission at Boise,
Idaho, tlhis 3o* day of January 1991.
J,PBE
H.ONER
ATTEST:
J.
SW:nh/O-t294
0RDER NO. 23548 -6-
SCHEDULE NO. 72
INTERCONNECTIONS TO
NON.UTI L ITY GENERATION
AVAILABILITY
Throughout the Company's serv'ice area within the State of Idaho.
APPLICABI LITY
This schedule applies to the construction, Upgrade, Relocatjon, or removal of
transm'ission and/or distrjbutjon lines and equipment necessary to safely interconnect a
Seller's generation plant to the Company's system.
DEFINITIONS
Additional Aooljcant: A person or ent'ity whose request for electrical connectjon
requires the Company to utjlize existing Interconnection Facil'itjes whjch are subject to
a Vested Interest.
Comoanv: The Idaho Power ComPanY.
Construction Cost: The cost, as determined by the Company, of Upgrades, Relocation
or construction of Company furnished Interconnection Facji'it'ies.
Disconnection Eou'ioment: Any devjce or combination of dev'ices by which the Company
can manua'l1y and/or automatical'ly interrupt the f'low of energy from the Se'ller to the
Company's system, including enclosures or other equipment as may be requ'ired to ensure
that only the Company will have access to certain of the devices.
Fjrst Energv Date: The date when the Seller begins delivering energy to the
Company's system.
Interconnection Facilities: A'll facilities which are reasonably required by prudent
electrica'l practices and the National Electric Safety Code to'interconnect and to allowthe delivery of energy from the Seller's generation plant to the Company's system,'includ'ing, but not limited to, Special Facil'it'ies, Disconnection Equipment and l'letering
Equ i pment .
I DAHOFiled - December 14, 1990
Effect i ve
Order No. 23631 Attachment
Issued by IDAHO P0WER COi'1PANY
D. H. Jackson - Vice President, Distribution
1220 Idaho Street, Boise, Idaho
IDAHO POWER COMPANY
I.P.U.C. NO.TARIFF NO. lOI SHFFT NO 27F
IDAHO POWER COMPANY l
T
SCHEDULE NO. 72
Conti nued)
Meterjnq Eoujoment: Equipment required to measure, record or telemeter power flows
between the Seller's generat'ion plant and the Company's system.
Relocatjon: A change in the location of existing Company-owned transmission and/ordjstributjon lines, poles or equipment
Seller: A non-utility generator who has contracted or w'ill contract with the
Company to supply energy.
Seljer Furnished Facil'itjes: That portion of the Interconnectjon Facjl jties
provided by the Seller.
Special Fac'iljtjes: Add'itions or alterations of transmission and/or distrjbution
l'ines and transformers, including, but not ljmited to, Upgrades and Relocation, to safely
interconnect the Seller's generation plant to the Company's system.
Transfer Cost: The cost, as determjned by the Company, for acceptance by the
Company of Seller FurnjsheU Facjlities.
Upqrades: Those improvements to the Company's exist'ing system which are reasonably
required by prudent electrical pract'ices and the National Electric Safety Code to safely'interconnect the Seller to the Company's system. Such improvements include, but are notlimited to, additional or larger conductors, transformers, po1es, and related equipment.
Vested Interest: The claim for refund that a Seller or Additiona'l Applicant holdsin a specific portion of Company-owned Interconnection Facilities. The Vested Interestexpires five years from the date the Company completes construction of its portion of the
Interconnection Fac'i'lities unless fu'lly refunded earl ier.
ssueFiled - December 14, 1990
Effect i ve
. H. Jackson - Vice President, D.istributionD
1220 Idaho Street, Boise, Idaho
SCHEDULE NO. 72
INTERCONNECTIONS TO
NON-UTI LITY GENERATION
( cont i nued )
COST OF INTERCONNECTION FACILITIES
All Interconnection Facil'ities provided under this Schedule will be valued at lhe
Company's Construction Cost and/or the Transfer Cost for vesting pur.posbs'as well as for
operation and maintenance payment obl igations.
PAYI,IENT FOR INTERCONNECTION FACILITIES
Unless specifically agreed otherwise'in the Fjrm Energy Sales Agreement between a
Seller and Company, Sel)er will pay all costs of interconnecting a Facility to the
Company's system. Project specific payment provisions will be set out in the Firm Energy
Sales Agreement between Seller and Company or thg agreement implementing Schedule 86
(Cogeneiation and Small Power Production Non-Firm Energy) orits successor schedule(s).
CONSTRUCTION OF INTERCONNECTION FACILITIES
The Company will construct, own, operate and maintain all Disconnection Equipment,
Metering Equipment, Upgrades and Relocation. Seller may construct, jnstall, own, operate
and ma'inta'in all other agreed upon Interconnect'ion Fac'il'it jes. The Seller may retain
ownershjp of Seller Furnished Facilities or may transfer them to the Company.
TRANSFER OF INTERCONNECTION FACILITIES
(A) Transfer at First Enerqv Date: if the Seller desires to transfer and ldaho
Power desires to accept any Se'ller Furnished Facilities at the First Energy Date, the
following will apply:
(1) Prior to the beg'inn'ing of construction, Seller shall cause the contractorthat is constructing the Se'l'ler Furnished Facil'it'ies to provide the Company with acertjficate naming the Company as an additiona'l insured in the amount of not less than onemillion dollars under the contractor's general liability policy.
(2) The Company will provide Seller's contractor w'ith construction and material
specifications and wil'l have final approval of the design of the Seller Furn'ishedFacilities.
(3) During construction and upon completion, the Company will inspect the
Seller Furnished Fac'ilities to be transferred to the Company. The cost of such inspect'ionwjll be borne by the Seller.
F'iled - December 14, 1990
Effect i ve
D. H. Jackson - Vice President, Distributjon
1220 Idaho Street, Boise, Idaho
IDAHO POWER COI,IPANY {I
I.P.U.C. NO. 25. TARIFF NO. IOI ORIGINAL SHEET NO. 27H
SCHEDULE NO. 72
INTERCONNECTIONS TO
NON-UTILITY GENERATION
( Cont i nued )
(4) If the Seller Furnished Fac'ilities meet the Company's design, material
and construction specificatjons, are free from defects in materials and workmansh-ip, and
the Seller has provided the Companywith acceptable easements, b'ills of sale and assurance
against labor or materials Ijens, the Company !111 acce_pt ownersh'ip effective as of the
First Energy Date. In the bill of sale, the Seller will warrant to the Company that the
Seller Furnished Faci'lities are free of any liens or encumbrances and wjll be free from
any defects in materials and workmanship for a period of one year from the First Energy
Date.
(B) Subseouent Transfer: If, after the F'irst Energy Date, the Seller des
transfer and Idaho Power desires to accept any Se]'ler Furnjshed Facjl jt'ies, the fowjll app'ly:
'ir
il es to
owi ng
( 1) The Company wi'lf inspect the faci I i ti es proposed for sal e to determ'ineif they meet the Company's design, material and construction specifications.
(2) The Company will determine the Transfer Cost of such facilities. The
Transfer Cost will be equal to the depreciated Construction Cost the Company would have
incurred if it had originally constructed the facilities plus the cost, if iU, ofbringing the facil itjes into compl iance with the Company's design, materjal and
construction specifications. Depreciation of the facilities proposed for transfer w'ill
be determi ned on the same bas'is as the Company depreci ates i ts own f ac i I i t'ies i n
accordance w'ith the appropriate FERC account numbers for the type and size of line or
equipment'involved. The time period used for the calculation of the depreciated transfer
cost w'ill extend from the First Energy Date until the agreed upon transfer date. The
Transfer Cost will be paid to the Company jn cash at the time of transfer. At the sametime, the Company will pay the Seller in cash an amount equa'l to the depreciated
Construction Cost.
(3) As a condition ofthe Company's acceptance, the Seller will provide the
Company with acceptable easements, bil'ls of sale and acceptable assurance against labor
and material liens. The bill of sale will include a warranty that the transferredfac'iljties are free of all ljens and encumbrances and will be free from any defects'in
materials and workmanship for a period of one year from the date of transfer.
(4) Effect'ive as of the date of the transfer, Company will operate and
mainta'in the transferred facil ities.
Fi ed - December 14, 1990 D. H. Jackson - V'ice Pres jdent, Di stribution
1220 Idaho Street, Boise, IdahoEffecti ve
IDAHO POWER COHPANY r' {
I.P.U.C. NO. 25. TARIFF NO. IOI ORIGINAL SHEET NO. 27I
SCHEDULE NO. 72
INTERCONNECTIONS TO
NON-UTI LITY GENERATION
( Cont i nued )
VESTED INTEREST
A Seller's e'ligibility for a Vested Interest refund will ex'ist for five years after
the date the Company completes construction of its portion of the Interconnection
Facil'it'ies.
1. The Company will provide a refund payment to each Seller holding a
Vested Interest in Company-owned Interconnectjon Facilitjes when an Addit'ionai Applicant
shares use of those Interconnection Facilities.
2. The refund payment wi'!1 be based on the following formula:
Refund =
L i near
Footage
Rati o
xx
Connected
Load/Peak Generation
Ratio
Original
Interconnect i on
Cost
a. The Linear Footage Ratio is the'length of jo'int1y used SpecialFacjlities divided by the length of the vested Speciai Facilitjes.
b. The Connected Load/Peak Generation Ratio is the Connected Load or
Peak Generation of the Add'itional Applicant divided by the sum of the
Connected Load or Peak Generation of the Additjonal Appficant and all other
Connected Loads and/or Peak Generation on the Special Facilit'ies.
c. The Origina'l Interconnection Cost is the sum of the Company's
Construction Cost and any Transfer Costs for the Interconnection Fac'ilities
to which the Additional App'licant intends to connect and share usage.
3. The Additional Applicant wjll pay the Company the amount of the VestedInterest refund(s). Additjonal Applicants mak'ing Vested Interest payments are in turneligible to receive refunds within the S-year limit described above.
4. Vested Interest refunds will not exceed 100 percent of the refundableport'ion of any party's cash payment to the Company.
5. Vested Interest refund payments may be waived by notifying the Companyjn wrjting.
IDAHO
F'i'l ed - December 14, 1990
Issued bv IDAHO POWER C0MPANY
D. H. Jackson - Vice President, Distribution
1220 Idaho Street, Bojse, Idaho
E ffect i ve
'IDAHO P0WER C0MPANY ( t
I.P.U.C. NO. 25. TARIFF NO. IOI ORIGINAL SHEET NO. 27J
SCHEDULE NO. 72
INTERCONNECTIONS TO
NON-UTI LITY GENERATION
( Cont j nued )
OPERATION AND I',IAINTENANCE OBLIGATIONS AND EXPENSES
The Company will operate and maintain Company furnjshed Interconnection Fac'il'ities
as well as any Seller Furnished Facilities transferred to the Company. In considerationof such operation and maintenance services, Seller wi'll pay the Company a monthly
operation and maintenance charge equal to a percentage of the Construct'ion Cost and
Transfer Cost paid by the Sel'ler. The percentage js 0.4%for 138 kV and 161 kV facilities
and 0.7% on facil ities below 138 kV.
The cost upon which an ind'ividual Seller's operat'ion and maintenance charge is basedwill be reduced by subsequent Vested Interest refunds. Additional Appljcants who are
Sellers will pay the month'ly operation and ma'intenance charge on the amount they paid as
an Addi t i ona'l Appl i cant.
Seller Furnished Facilities not transferred to the Company wiIl be operated and
maintained by the Sel'ler at the Seller's sole risk and expense.
Fi I - December 14, 1990 D. H. Jackson - Vice res i , D'i stri buti on
Ef fect'ive 1220 Idaho Street, Boise, Idaho
'IDAHO POWER COMPANY r{
I.P.U.C. NO. 25. TARIFF NO. 101 ORIGINAL SHEET NO. 27K