20030213Notice of Filing Notice of Comment Deadline.pdf

Office of the Secretary
Service Date
February 13, 2003
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE FILING BY PACIFI- )
CORP DBA UTAH POWER & LIGHT
COMPANY OF ITS 2003 ELECTRIC
INTEGRATED RESOURCE PLAN (IRP).
CASE NO. P AC-03-
NOTICE OF FILING
NOTICE OF COMMENT
DEADLINE
YOU ARE HEREBY NOTIFIED that on January 27, 2003 , PacifiCorp dba Utah
Power & Light Company (PacifiCorp; Company) filed its 2003 Integrated Resource Plan (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.
PacifiCorp states that its IRP provides a framework and plan for the prudent future actions
required to ensure PacifiCorp continues to provide reliable and least-cost electric service to its
customers. The final IRP, it states, culminates a year-long collaboration with considerable public
involvement from customer interest groups, regulatory staff, regulators and other stakeholders.
PacifiCorp serves approximately 1.5 million retail customers in service territories
comprising about 135 000 square miles in portions of six western states: Utah, Oregon
Wyoming, Washington, Idaho and California.This service territory has diverse regional
economIes ranging from rural, agricultural and mining areas to urban, manufacturing and
government service centers.
PacifiCorp forecasts average annual load on its system to grow by 2.2% in the east
and 2.0% in the west. Given uncertainties of economic growth and other factors, this growth in
PacifiCorp s load, the Company states, could vary by 1.4% and 3.4%. At the same time
PacifiCorp notes, the resources available to the Company to serve this demand will diminish
over time as supply contracts expire, hydro electric generation facilities are subjected to
relicensing conditions and thermal plants comply with more stringent emissions requirements.
The Company s IRP was developed against the backdrop of continuing market
regulatory and structural changes in the electric industry. These changes, the Company states
higWight the importance of understanding the risks and uncertainties inherent in resource
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planning. The IRP reveals that PacifiCorp has substantial new resource needs and will require an
additional 4 000 MW of new resources (DSM, generation, and supply contracts) through 2013.
Load growth, load shape growth, asset retirement and contract expirations cause the gap between
demand and supply to grow over time.
Other key findings in the IRP include:
The strongest resource strategy relies on a diverse portfolio of options
including strong components of renewables and demand-side
management, but also natural gas- and coal-fired generating resources. A
resource procurement process to pursue this diversified approach is
described in the Action Plan.
Possible paradigm shifts in the electric industry driven by federal
regulatory requirements are significant uncertainties for PacifiCorp and
its customers to manage in the next several years. These issues include
(potentially favorable) changes in transmission operations, as well as the
potential increased cost associated with PacifiCorp s existing resource
assets, including complying with air emission standards and relicensing
hydro electric facilities.
Renewable resources are a good fit for PacifiCorp within the context of a
diversified portfolio. The IRP proposes procuring renewable resources
(primarily wind, and possibly geothermal) at a level shown to be cost
effective, given the assumptions used to evaluate the resource.The
amount of renewables is also a level that would meet or exceed
renewable portfolio standards that have been proposed in federal and
state legislation.
Demand-side management (DSM) will continue to be an important and
cost-effective program for PacifiCorp. A significant increase in
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programmatic measures is proposed, including a load control program to
help mitigate growing capacity requirements.
In addition to renewable resources and DSM, the study concludes that
additional resources from thermal generation will also be required. The
least-cost option is a combination of three natural gas-fired units and one
coal unit to meet both growing energy and capacity requirements.
The least-cost portfolio includes a coal baseload thermal unit in the east.
Coal-fired generation may be particularly advantageous when procuring
resources in the Rocky Mountains, the Company states, because coal is
an abundant indigenous resource there. However, the long-term impact
of atmospheric emissions is casting doubt on the viability of coal-fired
generation. The IRP least-cost portfolio is dependent upon the impact of
a number of these paradigm risks, including air emission standards and
possible global warming measures. PacifiCorp believes it has adequately
addressed these risks, based on its current understanding of them, and
coal plants remain a low-cost option. The IRP action plan includes
further work to develop and test the viability of a coal baseload thermal
unit, including an ongoing assessment of the risks.
The Company s IRP proposes a significant procurement of new resources. The
strategy outlined in the IRP includes the addition of about 4 000 MW of new capacity over the
first 10 years of the 20-year IRP. The least-cost, risk-adjusted approach proposed is a diverse
portfolio of resources, including renewables , DSM and thermal baseload and peaking units.
These additions include the following portfolio additions during the planning period:
1400 MW of renewable resources
450 MWa ofDSM and 90 MW of direct load control
2100 MW of base load capacity
1200 MW of peaking capacity
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700 MW shaped resource contracts
The Action Plan details findings of resource need and specific implementation
actions. The plan also outlines step-by-step decision processes by which proposed resources will
be continually evaluated and procured. Going forward, PacifiCorp will implement the Action
Plan, while also maintaining the flexibility to adjust to future changes and opportunities. The
Action Plan will be revisited and refreshed no less frequently than annually.
For analytic purposes, the IRP assumes new resources are developed and owned by
PacifiCorp. However, no decision has been made to invest in specific resources. The decision
to own, build and invest in a new resource versus contracting with a third party would be made
as part of the procurement process for each new resource addition, and on a case-by-case basis.
A multi-state process (MSP) (Case No. P AC-02-3) is expected to provide clarity on the
regulatory treatment on investment decisions and the degree of cost recovery risk held by
PacifiCorp. The Company anticipates that the MSP will issue findings in the spring of 2003.
The MSP outcome will influence the activities and operations of PacifiCorp and may impact
action plan implementation. The Company states that a significant procurement program and
potential investment is required to maintain reliable electric service. It is critically important, the
Company contends, that state regulators support this IRP and issue their acknowledgement of the
Action Plan. This support coupled with a useful and durable MSP outcome, the Company states
is vital to PacifiCorp being able to resolve issues around recovery lag and achieve allowed rates
of return, and is critical in ensuring PacifiCorp can continue to provide least-cost, reliable
electric service to its customers.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the Company
filing in Case No. P AC-03-02 and finds it reasonable to establish the following schedule for
comment on the 2003 Integrated Resource Plan:
Wednesday, March 26, 2003 Deadline for fIling written comments
All comments should contain the case caption and case number shown on the first page of this
document.
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Written comments concerning this Application and the Company s filing should be
mailed to the Commission and the Company at the addresses reflected below:
COMMISSION SECRETARY
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
Street Address for Express Mail:
JANET MORRISON
DIRECTOR OF RESOURCE PLANNING
P ACIFICORP
825 NE MUL TNOMAH, STE 800
PORTLAND, OR 97232
J anet.Morrison~Pacifi Corp .com
472 WWASHINGTON ST
BOISE, ID 83702-5983
Persons desiring to submit comments by e-mail may do so by accessing the
Commission s home page located at www.puc.state.id.under the heading "Contact Us." Once
at the "Contact Us" page, select "e-mail case comments or questions " fill in the case number as
it appears on the front of this document, and enter your comments. These comments must also
be sent to the Applicant at the e-mail address listed above.
YOU ARE FURTHER NOTIFIED that the Application and submitted documents are
available for public inspection during regular business hours at the Commission s office and at
the Idaho offices ofPacifiCorp. The Company s 2003 IRP is also available at the Commission
website at www.uuc.state.id.under the "file room" icon.
DATED at Boise, Idaho this J."" day of February 2003.
~iP
Commission Secretary
Vld/N:PACEO302
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