19910118Comments.pdf

Roy L. BigurenPeter J. Richardson
DAVIS WRIGBT TREI,IAINE
350 N. Ninth 8t., Euite {00Boise, fdaho 83?02208) 336-8844208) 336-8833 fax
fN THE UATrER oF THE APPLICATTON
OF IDAIIO POI'ER COUPANY TOR
APPROVAL OF AlI INTERCOIINECTION
TARTFF FOR NON-UUI,ITY GENERATION
RECEIVED E
rILED N
'31 JRll 18 Pn { 5'l
i.JAHO FUBLIC
UTI LITIES C OI.t I'I I S Si ON
BEtr'ORE THE IDAIIO PUBLIC UTTLITIES COUI,IISSTON
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CASE NO. rPC-E-90-20
COUUENTS OE TEE
INDEPENDE}IT ENERGY
PRODUCERS OF IDAIIO
COIIES NOW, the Independent Energy Producers of fdaho (IEPf),
and pursuant to Order No. 23477 of the Idaho Public Utilities
Commission (Commission) hereby provides its comments regarding the
Application of Idaho Power Company (Company or IPCo) for approval
of Tariff Schedule No. 72.
I.
INTRODUCTION
The IEPI is an unincorporated association of entities with an
interest in cogeneration and small power QF production in the State
of Idaho. The IEPI has actively participated in the Commissionrs
most recent avoj-ded cost proceedings for PacifiCorp and Idaho Power
Company.
II.
GENERAIJ AGREEUE}IT
The IEPf is in general agreement with the need for and the
format of Idaho Power's Schedule 72. Idaho Power Company is to be
commended for its attempts to standardize this small part of the
CO!{I,{ENTS OF IEPI - PAGE 1
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process by which QFs embark on the relationship nrith fPCo for the
purchase of power and energy. Although in general agreement with
the overall purpose of Schedule 72, the IEPI has specific concerns
identified below.
III.
trIIE VE8TED INTEREST REFUND
TII'IE PERIOD I8 ARTIFfCIAIJLY SHORT
The vested interest refund provision found in proposed Tariff
Schedule 72 para1le1s exactly the vested interest refund provisions
found in the Company's line extension rules. See Section VIIf B of
Idaho Power Company Tarif f Schedule No. 7L rrOverhead and
Underground Distribution Line Extensions.rr While possibly a good
working model from which to devise a tariff schedule for
application to QF facilities, Schedule 7l should not necessarily
control in this proceeding.
A seIler of power to IPCo who has contributed to the
construction and installation of interconnection facilities is only
eligible for a refund from third party use of those facilities for
a peri-od of five years. The five year time period during which
refunds may be had from additional third party use of the
interconnection facilities is the same as the five year time period
found in the Company's general line extension ru1es. The IEPI can
see no rationale, stated or implied, for establishing a vested
interest refund period that is shorter than the term of the
contract under which the QF is obligated to provide power and
energy to Idaho Power.
A fj-ve year vested interest refund period may be reasonable
CO!,III{ENTS OF IEPI - PAGE 2
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for 1j-ne extensions to new customers of the utility because of
possible difficulties in locating the individual who made the
initial investment in the line extension. The same rationale does
not apply to a QF. Idaho Power and the QF will have a contractual
relationship that will last at least as long as the power sales
agreement. There will never be any difficulty in locating the
entity (or its lega1 successor) that made the initial contribution
for the interconnection equipment that the third party seeks to
use.
Another reason traditionally asserted for limiting the vested
interest refund period is the difficulty in correctly apportioning
the benefits of the facilities. That problem also is not present
in the case of a QF. The typical QF interconnects to the utility's
transmission or primary distribution facilities. There simply will
not be a multitude of entities sharing such utility facilities as
there would be in a housing subdivision. As a result, there will
be litt1e difficulty in j.dentifying all who are making use of the
QF contributed interconnection facilities.
It is reasonable to a1low the QF the opportunity to collect a
portion of the contributed cost of installation of the
interconnection facilities throughout the life of the QF's power
sales agreement. The utility's only interest in lirniting sueh
refunds is for administrative ease. As noted above, the
traditional problems identified with refunding Iine extension
contributions are sinply not present in the QF context. Idaho
Power has not offered the Commission any rationale for limiting the
COU}IENTS OI' IEPI PAGE 3
vested refund period for QFs. The IEPI therefore respectfully
request that the Commission modify Tariff Schedule 72 to provide
that the vested interest refund period for QFs will be the same
length as the underlying power sales agreements.
IV.
TEE COUPA}IY'8 ITEASURE OT
THE CO8T OF INTERCONNECTfON rACILITTESIg INAPPROPRTATE
Idaho Power's proposed Tariff Schedule 72 provides that for
purposes of operations and maintenance obligations and vested
interest refunds the disconnection equipment be valued at Idaho
Power,s construction costs. Idaho Power determined ftConstruction
Costsrr may not be the same as actual construction costs. The
definition of rrConstruction Cost[ makes it c]ear that Idaho Power
anticipates that there may be a difference between actual
construction costs and rrConstruction Costsrr for purposes of
proposed Schedule 72. Proposed Schedule 72 defines construction
costs as:
The cost, ds deterrnined by the Company, of Upgrades,Relocation or construction of Company furnishedInterconnection Facilities
Interconnection equipment should be valued at actual
construction cost and not fdaho Power's determination of
trConstruction Costs.rr There is no reason for placing any other
value on such costs.
V.
DISPOSITTON OF INTERCONIIECTION
EQUTPI.IENT AT rIIE TERIiTNATTON Or TEE CONTRACT
Proposed Tariff Schedule 72 is silent as to the disposition of
COI{IIIENTS OF IEPI - PAGE 4
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the interconnection equi-pment at the termination of the power sales
agreement. The QF, who has paid for the construction,
installation, operation and maintenance of such equipment may have
an interest in its disposition at the termination of the power
sales agreement. Schedule 72 should recognize and make
accommodations for that interest.
There are three scenarios that are possible at the termination
of the power sales agreement. Each should be recognized in
Schedule 72.
First, the QF may seek to continue selling power and energy to
the utility. In such case, Schedule 72 should make it. explicit
that rdaho Power will continue to maintain the originally installed
interconnecting equipment at no additional cost so long as such
equipment is electrically sound.
Second, the QF may seek to sell its power and energy to a
third party and only utilize Idaho Power as a wheeling utility. As
in the scenario outlined above, Schedule 72 should be explicit that
the interconnection equipment will be maintained as originally
installed without additional cost to the QF for the length of the
equipments' useful Iife.
Third, the QF may cease electrical production at the site but
sti1I have a need for the interconnection equipment in lieu of
salvage va1ue. In other words, the QF rnay wish to take physical
possession of the disconnection equipment. Schedule 72 should
accommodate such a possibility with the caveat that the utility is
made whole for any tax or other monetary consequences of such a
COI'{MENTS OF IEPf - PAGE 5
transfer.
vr.
CONCLUSIO}I
The IEPI respectfully asks the Commi-ssion to consider and
adopt as reasonable the above recommended changes to Idaho Power
Company's proposed Tariff Schedule No. 72. The IEPI does not
believe a public hearing or additional briefing is necessary to
adequately present this matter to the Commission for resolution.
However, should the Commission determine that further proceedings
are necessary, the IEPI respectfully request to be afforded fuII
opportunity to participate.
Respectfully submitted this tltday of January , Lssl.
a
By
on- Of the Firm -
CO!{MENTS OT IEPI - PAGE 6
CERTIFICATE OF SERVICE
r HEREBY cERrrFY that r have this Jt-day of January,
1991, served the foregoing GoMMENTS oF THE INDEPENDENT ENERGY
PRODUCERS OF IDAHO in Case No. IPC-E-90-20 upon all parties ofrecord in this proceeding, by nailing a copy thereof, properly
addressed with postage prepaid to:
Scott Woodbury
Idaho Public Utilities Commission
472 W. WashingtonBoise, ID 83720
Office of CounselIdaho Power CompanyP.O. Box 7OBoise, ID 83707
I
er R chardson
By
CERTIF'ICATE OF SERVICE - PAGE 1
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