20011218Acceptance of Filing.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

in the matter of THE FILING BY PacifiCorp DBA UTAH POWER & LIGHT COMPANY OF ITS 2001 ELECTRIC INTEGRATED RESOURCE PLAN (IRP). )
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CASE NO. PAC-E-01-13

ACCEPTANCE OF FILING

On July 5, 2001, PacifiCorp dba Utah Power & Light Company (PacifiCorp; PCP; Company) filed its 2001 Resource and Market Planning Program (RAMPP-6; IRP) with the Idaho Public Utilities Commission (Commission). The Company’s filing is pursuant to a biennial requirement established in Commission Order No. 22299, Case No. U-1500-165. The IRP describes the Company’s loads and resources, provides an overview of technically available resource options including conservation and establishes a demonstrated need for resources in 2004. PacifiCorp’s filing includes a model output appendix and an addendum to the report entitled “RAMPP-6 Special Studies.”
The Company notes that the IRP was not filed as anticipated on December 31, 2000, and apologizes for the delay. The Company notes that the IRP also does not reflect the impacts of recent events. The current state of the industry, the Company notes, is not encompassed in any of the scenarios analyzed in the study. Nonetheless, the Company contends that the study stands on its own merits and will provide a useful basis for current and future analysis. Future analysis may require using the base model developed for RAMPP-6 with assumptions updated to current conditions.
In anticipation of the continued change within the electric industry, the Company states that it is currently reforming its long range planning process. A centralized resource planning function is being created that will be able to evaluate and compare the resource options available to the Company such as adding resources, repowering resources, purchasing commodity, or the various sophisticated financial transactions being offered in today’s energy marketplace. The function will be staffed by experts in generation, transmission, modeling, economics and regulatory requirements. The purpose of the function will be to better align the Company’s long-range planning, regulatory requirements and business planning.
A Notice of Filing and Request for Comments in Case No. PAC-E-01-13 was issued on August 22, 2001. The deadline for filing comments was October 19, 2001. The Commission Staff was the only party to file comments. Staff’s comments can be summarized as follows:
Staff recommends that the Commission acknowledge receipt of the Company’s RAMPP-6 Integrated Resource Plan. Despite recent volatility of gas and market prices and the problems this presents in planning, Staff finds that the Company’s IRP provides valuable insight into the Company’s need for new resources, the alternatives likely to be pursued, and the risks associated with various alternatives.
PacifiCorp’s load forecast projects an overall annual growth rate over the 20 year planning horizon of 2.6%. Because open access is already available in California and is scheduled to begin soon in Oregon, PacifiCorp believes there is a possibility that it could lose a substantial portion of its regulated load. In Oregon, as a result of SB 1149, the Company believes that it is possible that between 32% and 50% of its load could eventually be lost. For the purpose of this IRP, however, no loss in regulated load is assumed.
PacifiCorp concludes that development of new resources is warranted in the next three to five years. The Company identifies a need for 540 MW of summer capacity in 2004. The weighted average risk analysis indicates a need for 364 MW at the same time. If the Company proceeds to develop new resources for the 2004 time frame and a loss of load materializes, the Company’s report indicates it will be in a position with a 18.2% reserve. This reserve margin is significantly higher than that required for providing safe, reliable service. The Company’s IRP utilizes a minimum reserve margin of 10%.
The RAMPP-6 action plan establishes a new target for the amount of demand side management (DSM) to be pursued. The reference case chooses 16.5 aMW in 2001 and 16.1 aMW in 2002. The Company bases its DSM targets on DSM costs that are 15% lower than costs the Company actually incurs. The 15% reduction reflects the 10% Northwest Power Act credit and an additional 5% for avoided investment and transmission and distribution.
As in RAMPP-4 and -5, gas-fired resources are identified as the least cost alternative for new generation. Cogeneration and combined cycle combustion turbines (CCCT) are selected resources for 2004. Prior to 2004, short-term capacity purchases are selected.
Staff finds the Company’s suggestion that it conduct ongoing analyses and provide periodic updates to its plan to be a reasonable solution to the problem of the IRP preparation cycle being too long to quickly consider changes in conditions.
Staff’s only real criticism of the IRP is that it does not appear to fully reflect the plans the Company intends to pursue. Few, if any, of the scenarios analyzed by the Company, Staff contends, identify simple cycle combustion turbines to be located in the Salt Lake area and the addition of a fourth unit at Hunter as the preferred alternatives, although these are specific actions under consideration in 2001 and 2002. In fact, in the near term, the Company’s planning model selects short-term capacity purchases instead of simple cycle combustion turbines. The deviation between the IRP and the actual Company plans, Staff states, is understandable given recent events, but still, the IRP offers little support for the short-term activities. This makes the report, Staff contends, somewhat confusing to readers and confirms that the report is of limited value in light of recent changes in the electric industry. Staff believes, however, that the lessons learned during the past year will be incorporated into the Company’s next IRP.

COMMISSION FINDINGS
The Commission has reviewed the filings of record in Case No. PAC-E-01-13 including the Company’s year 2001 Resource and Market Planning Program (RAMPP-6; IRP) and related comments. We find that the Company’s IRP contains the necessary information and is in the appropriate format as directed by the Commission in Order No. 22299. The Company has suggested and we concur that it is appropriate to conduct ongoing analyses and provide periodic updates to its plan so as to have the plan more accurately reflect changes in conditions. The Company informs us that it is in the process of creating a centralized resource planning function. We look forward to the results of its efforts in future planning documents.

CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over PacifiCorp dba Utah Power & Light Company, an electric utility, pursuant to Title 61 of the Idaho Code and the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq.

ACCEPTANCE OF FILING
Based on our review, we find it reasonable to accept the Company’s filed 2001 Resource and Market Planning Program (RAMPP-6; IRP). Our acceptance of the 2001 IRP should not be interpreted as an endorsement of any particular element of the plan, nor does it constitute approval of any resource acquisition or proposed action contained in the plan.

DATED at Boise, Idaho this day of December 2001.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

Vld/N:PAC-E-01-13_sw2

ACCEPTANCE OF FILING 1

Office of the Secretary
Service Date
December 18, 2001