pace01.10jhdes.doc

JOHN HAMMOND
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BAR NO. 5470

Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983

Attorney for the Commission Staff

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF PACIFICORP REQUESTING APPROVAL OF ITS EMERGENCY MANAGEMENT PLAN (THE “CURTAILMENT PLAN”). )
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CASE NO. PAC-E-01-10

COMMENTS OF THE COMMISSION STAFF

COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its Attorney of record, John Hammond, Deputy Attorney General, and in response to the Notice of Application, Notice of Modified Procedure, and Order No. 28822 issued on August 28, 2001, submits the following comments.
BACKGROUND
On June 13, 2001, PacifiCorp filed an Application requesting Commission approval of its Emergency Management Plan (the “Emergency Plan”). The Emergency Plan outlines procedures employed by the Company to temporarily interrupt electric service to its customers during emergencies and power shortages, and is intended to provide equitable procedures for the curtailment of power while minimizing adverse impacts to customers and maintaining overall system reliability.
PacifiCorp’s generation, transmission and distribution facilities serve approximately 1.5 million residential, commercial and industrial electric customers in the western United States. Headquartered in Portland, Oregon, PacifiCorp has more than 8,700 megawatts of generation capacity. PacifiCorp operates as Pacific Power in California, Washington, Oregon and Wyoming and as Utah Power in Idaho and Utah. PacifiCorp also is now part of the ScottishPower group, which provides energy and other utility services to 5.5 million customers in the United Kingdom. PacifiCorp’s system is interconnected with other utility systems in the western United States in a regional system known as the Western Systems Coordinating Council (WSCC). The WSCC is a part of the North American Electric Reliability Council (NERC). The WSCC includes two Canadian Provinces, 11 western states, and a portion of Mexico. The WSCC administers operating criteria to maintain the integrity and reliability of the western grid.

THE EMERGENCY PLAN
The Company states the Emergency Plan is operational 24 hours a day, 365 days a year to:
Match customers’ demand and electrical supply generation;
Maintain the integrity of the electricity network;
Make available resources to restore supply quality to normal
as soon as is practicable;
Keep customers informed of the state and progress of the
incident or emergency;
Take steps for the care of its customers.

PacifiCorp’s Emergency Plan consists of four contingency plans that incorporate system-operating procedures for addressing system emergencies. Plan 1 is entitled “System Outages Emergency Procedures” and is meant to provide effective service to customers in response to a diminution of electrical supply quality due to damage or failure of critical plant and equipment. The Company states that the objective of this Plan is to establish sufficient arrangements to restore electrical supplies as soon as is reasonably practicable and provide good customer communications and care.
Plan 2 is entitled “System Integrity Emergency Procedures” and sets out the actions to be taken to preserve the integrity of the transmission system if certain events occur. System integrity emergency actions are mainly designed to deal with situations where immediate action is required and little or no warning of load reduction and disconnection is possible. For example, the sudden loss of generators or the separation of the integrated transmission system resulting in “islanding” of generation customers and a threat of the total collapse of the system through to Black Start if emergency actions are not taken to balance demand and generation. Procedures in this Plan involve automatic under frequency load shedding, emergency load shedding (irrespective of frequency), controlled load shedding (selective shedding of lower priority blocks of load), and demand side management.
Plan 3 is entitled “Energy Supply Emergency Procedures” and establishes procedures for the long term restriction of demand or consumption of electricity by customers in the event of generating plant shortage, a fuel shortage, a combination of both of these circumstances, or for some other reason. Restrictions on the demand/consumption of electricity over the longer term may be achieved by (a) appeals by the State to the public for voluntary restraint; (b) issuance of orders under state and federal legislation to initiate load curtailment on consumption by industry and commerce; and/or, (c) issuance of directives under state or federal order to initiate curtailment plans.
Plan 4 is entitled “Black Start Emergency Procedures” and establishes procedures to follow in the event of a total collapse of the transmission system.
The above plans recognize two categories of incidents and emergencies, minor incidents and major emergencies. If either of these events occur, the Company has established detailed procedures so that these situations may be dealt with under one of its proposed contingency plans. Also included in PacifiCorp’s Emergency Plan are two volumes that contain a directory of resources, load disconnect schedules and information detailing the Black Start restoration process.
Curtailment of the Company’s services may occur in one of two general circumstances. First, curtailment may be caused by unforeseen events with little or no warning. The situation may require remedial actions to be taken very rapidly. For example, lightning strike or equipment failures may cause protection equipment within the Company’s electric system to automatically “trip” to protect the system from damage (or further damage) and to maintain reliability of the unaffected portion of the system. The procedures, which deal with these circumstances, are described in Plan 2. Curtailment could also result from circumstances that gradually develop over time or occur in a foreseeable manner and persist for a long term. An example of this second type of curtailment may result from extended cold weather, fuel shortage, or extremely low hydro conditions. The procedures dealing with these circumstances are contained in Plan 3.
The Company clarified by letter dated September 24, 2001, that the Emergency Plan is consistent with the “Northwest Energy Emergency Plan” (NEEP), and NERC rules. The letter also explains that Plan 3 is intended to substantially replicate the function of the “Regional Curtailment Plan” (RCP) The RCP addresses shortage of regional electric supply, i.e., when the Northwest suffers a prolonged energy shortage due to drought or other fuel shortage conditions. Under this RCP, the States of Idaho, Montana, Oregon and Washington implement voluntary and mandatory load curtailments. The intent of the RCP is to have customers reduce load so that rotational power outages (rotational disconnection or rolling blackouts) can be avoided. The NEEP contains procedures for (1) identifying potential northwest energy shortages; (2) issuing appropriate public alerts; (3) coordinating communication efforts; and (4) taking actions to reduce shortages. The NEEP was developed by the Pacific Northwest Utilities Coordinating Council and the Northwest Power Pool to increase the region’s ability to avoid power emergencies or longer-term adequacy problems by promoting regional coordination, cooperation and communications. The NEEP is aimed at promoting actions in advance to avoid potential short-term capacity emergencies and longer-term adequacy problems in the Northwest Power Pool area. Among other things, the NEEP provides criteria for communicating emergency warnings and energy adequacy problems to the utilities, state and federal agencies, public officials, and the public. Once a regional warning has been issued, load reduction measures include halting discretionary exports of power; adjusting planned outages for the maintenance of generation or transmission facilities; operating generating resources to full operational capabilities; exploring options to increase transmission capability; and curtailing supplies to customers via existing contract provisions or purchasing load reductions from customers.
In the event restrictions in demand/consumption of electricity is envisaged, the curtailment plan will be implemented in three stages as described in NEEP. The three stages are consistent with NERC’s definition or criteria and escalate in relationship to the severity of the emergency. The applicability of Stage 1 and Stage 2 alerts will depend upon the circumstance(s) that are causing or contributing to the power emergency. For example, situations that require immediate attention may necessitate moving immediately to a Stage 3 power emergency.
Without getting too technical, PacifiCorp’s system is required to operate in a “balanced” condition. In other words, at any given time the generating resources of the Company must be sufficient to meet the demand or load caused by customer usage. The WSCC requires PacifiCorp (and all utilities) to maintain a 5% reserve capacity for hydroelectric generating resources and a 7% reserve for thermal (coal and gas-fired) generating resources. Under its Emergency Plan, the Company will declare a Stage 1 power alert when it foresees or is experiencing conditions where it cannot sustain spinning and non-spinning reserves of at least 5% hydro and 7% thermal. Before declaring a Stage 1 alert, the Company will (1) bring online all available generation; (2) purchase necessary additional generation from sellers or the Northwest Power Pool; (3) exercise its right to curtail power delivery to interruptible customers and non-firm wholesale energy loads; and (4) seek voluntary curtailments.
When declaring a Stage 1 alert, the Company will issue public warnings requesting that all customers reduce energy usage on a voluntary basis. PacifiCorp will also notify the WSCC regional coordinator and the State Communications Center.
In the event that PacifiCorp cannot maintain its 5% and 7% reserves, then the Company will declare a Stage 2 alert. Additional actions for Stage 2 alert include seeking emergency power assistance from neighboring utilities and increasing efforts to conserve or reduce load.
At such time as the Company’s reserves fall below 2.5% for hydro and 3.5% for thermal, then the Stage 3 power emergency will be declared. Stage 3 emergencies require the Company to curtail load. As previously mentioned, Stage 3 power emergency may also occur if there is a disturbance or event which requires immediate action to maintain system reliability. In such extreme emergencies, the Company will take automatic action to balance load in order to avert a system blackout. If the automated load shedding mechanisms are not sufficient to maintain system reliability, the Company will initiate load shedding in the form of rotational disconnection.
It is the Company’s intent to implement rotational disconnection in a fair and equitable manner, while maintaining system reliability. PacifiCorp’s service area is divided geographically into approximately 36 equal load groups. Critical load customers are not included in these load groups. A critical load customer is defined as a customer who supplies essential services relating to public health, public safety, welfare, or energy production. When implementing rotational disconnection, distribution circuits in each of the Curtailment Plan Load Groups will be curtailed. Outages are expected to last about two hours, however, factors like customer requirements, cold load pick-up, crew availability, will determine the actual outage duration. When possible, advanced notification will be provided to facilitate preparations and minimize the effect on customers. When rotational outages become necessary, or an emergency occurs, information will be disseminated through the Customer Service Center, telephone, e-mail, the Company Internet site, loud speaker and public announcements. Depending on the events that precipitate the various stages, the Northwest Security Coordinator, the Idaho State Communication Center, the U.S. Department of Energy, the Idaho Public Utilities Commission and large customers will be notified. The State Communication Center will then provide notification to the Bureau of Disaster Services, County/City 911 Centers, Fire Departments, Sheriff’s Departments, Police Departments, Red Cross and various public officials.

STAFF REVIEW / COMMENTS
Circumstances surrounding the present electrical energy situation in the West are strikingly similar to the situation that existed in 1977, when the Idaho Public Utilities Commission last ordered individual utility curtailment plans. At that time Idaho, along with the entire Pacific Northwest, faced an electric energy crisis. The Pacific Northwest suffered a severe drought during the winter of 1976 – 1977. Precipitation during that period was the lowest on record for much of the area. Because electric power for most of the Northwest is generated primarily by hydropower in the Columbia River Basin, the drought resulted in short supplies of electrical energy. This situation was aggravated by the fact that loads were higher than expected due in part to the high irrigation demand. Furthermore, a number of new thermal generators were suffering delays in coming on line. As a result of these extreme conditions the Commission required all electric providers in the state of Idaho to file electric load curtailment plans. At that time PacifiCorp (Utah Power and Light) filed a Curtailment Plan. As of 1992 PacifiCorp has been a party to the “Regional Curtailment Plan”.
The Regional Curtailment Plan was designed to respond to a regional protracted drought. The model used in that Plan to predict an energy shortage relied on the free flow of data to the Director of the Northwest Power Pool who is designated as the Utility Coordinator. While the Regional Plan is still in effect, it is not clear how well it would function in today’s environment. Changes in the electric industry and FERC Orders have made gathering the data necessary to run the model more difficult if not impossible.
In the Fall/Winter of 2000 the electric energy situation in the northwest was shaping up much like 1976 –1977. Load growth, delayed construction of new generation, and drought conditions made for severe energy shortages. At that time the Northwest Energy Emergency Plan (NEEP) was developed to increase the northwest region’s ability to deal with the energy shortage and avoid electric power emergencies. That Plan is forward-looking. It provides for the collection of data necessary to forecast loads and resources and identify potential shortages. The Plan provides a framework for communication of emergency warnings in the event of severe weather conditions or unexpected outages of transmission or generation facilities. It defines a range of actions that could be taken to avoid declaration of an official NERC energy emergency alert.
The energy shortage of 2000 - 2001 prompted many utilities to reexamine their Curtailment Plans. In June of 2001, PacifiCorp filed its Emergency Management Plan (Emergency Plan) with this Commission.
Idaho Code § 61-531 requires all electric corporations to maintain a plan for the curtailment of electric or gas consumption during an emergency. Idaho Code § 61-532 requires that these plans be submitted and reviewed by the Commission. In reviewing the plans, the Commission is to consider consistency of the plan with the public health, safety and welfare; the technical feasibility of implementing the plan; and the effectiveness with which the plan minimizes the impact of any curtailment. Id.
As envisioned in the Plan, PacifiCorp that specific customers or customer class will be exempt from the impacts of curtailment. More specifically, the Company plans that rotational outage curtailment will occur by circuit based upon the regional team’s goal of minimizing impacts on communities. In other words, the Company does not exempt certain customers like hospitals, 911 dispatch centers, police and fire stations from curtailment. The adverse effect of curtailing service to these types of entities is mitigated by the notification procedures and by the fact that many, if not most, of these facilities already maintain emergency back-up systems. In addition, the Company’s automated curtailment schemes do not lend themselves to selective curtailment because time is of the essence and they have limited control.

RECOMMENDATIONS
The Company’s Plan implements practices normally utilized by the electric industry to avoid rolling outages. If rolling outages become necessary, the Plan provides for an orderly, nondiscriminatory process to reduce load and to provide notification. The Plan employs both load reduction and increased generation measures to mitigate curtailments. In the event that rolling outages become necessary, Staff believes that spreading outages evenly across the 36 load groups is equitable and fair. The planned curtailments of about two hours appropriately balance the need to safeguard system reliability while minimizing adverse impacts to customers.
Upon review of the Company’s Emergency Management Plan, Staff believes that the Plan is in the interest of the public health, safety and welfare. Furthermore Staff believes that it is a workable plan. It provides for an interface with existing plans and organizations. Staff recommends approval of the Company’s Emergency Plan.

Respectfully submitted this day of September 2001.

____________________________________
John Hammond
Deputy Attorney General

Technical Staff: Dave Schunke

JH:DES:i:umisc/comments/pace01.10jhdes

STAFF COMMENTS 2 SEPTEMBER 25, 2001