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HomeMy WebLinkAbout20070530Compliance filing re Commitment 40.pdfaOCKY MOUNTAIN ~gY!~BORP ..- , . 1" i: ij ri f L.'( :J 0 i~: j 9: L~ 7 201 South Main, Suite 2300 Salt Lake City, Utah 84111 May 30, 2007 'i" j;) ;,1:188: VL4 OVERNIGHT DELIVERY Idaho Public Utilities Commission 472 West Washington Boise, ID 83702 Attn: Jean Jewell Commission Secretary RE:Compliance Filing Pursuant to Commitment 40 of Stipulation Appendix A, Consolidated List of Commitments, Docket No. P AC-05- Dear Ms. Jewell: MidAmerican Energy Holdings Company ("MEHC") and PacifiCorp submit to the Idaho Public Utilities Commission ("Commission ) an original and seven (7) copies ofPacifiCorp Renewable Energy Action Plan. Copies of the report are available electronically and will also be posted on PacifiCorp s web site, at www.pacificorp.com. The Renewable Energy Action Plan is provided in compliance with General Commitment 40 pursuant to the Commission Order granting approval of the acquisition ofPacifiCorp by MidAmerican Energy Holdings Company, issued March 14 2006, in the referenced proceeding. The Commission approved the acquisition ofPacifiCorp by MEHC, subject to a Consolidated List of Commitments specified in a settlement agreement supported by all parties to the proceeding. Included in this consolidated list is MEHe's and PacifiCorp s commitment regarding the filing of the enclosed report. The general commitment in pertinent part is as follows: 40) .. .MEHC and PacifiCorp commit to work constructively with states to implement renewable energy action plans so as to enable PacifiCorp to achieve at least 1400 MW of cost-effective renewable energy resources by 2015. Such renewable energy resources are not limited to wind energy resources. By copy of this letter, other parties to the proceeding are being provided notice of this filing. It is respectfully requested that all formal correspondence and Staff requests regarding this filing be address to the following: Bye-mail (preferred):datareq uest~pac ifi corp. com By Fax:(503) 813-6060 By regular mail:Data Request Response Center PacifiCorp 825 NE Multnomah, Suite 2000 Portland, OR 97232 If there are informal inquiries concerning the filing, please contact Brian Dickman, Idaho Regulatory Affairs Manager, at (801) 220-4975. Sincerely, ~r" ~f.A Jeffrey K. Larsen Vice President, Regulation Enclosure cc: Service List P AC-05-(wi out enclosures) :' CERTIFICATE OF SERVICE I hereby c~ftify that on this 30th day of May, 2007, I caused to be served, via E-mail, if address a~Hable or U.S. Mail a true and correct copy of the Cover Letter regarding the Renewable Energy Action Plan in PAC-05-08 to the following: Andrea L. Kelley Vice President, Regulation ACIFICORP 825 NE Multnomah, Suite 2000 Portland, OR 97232 Mail: andrea.kelly(illpacificorp.com Douglas L. Anderson Senior Vice President & General Counsel MidAmerican Energy Holdings Company 302 S. 36th Street, Suite 400 Omaha, NE 68131 Mail: danderson(illmidamerican.com Eric L. Olsen Racine, Olson, Nye, Budge & Bailey, Chartered 201 E. Center O. Box 1391 Pocatello, ID 83204-1391 Mail: elo(illracinelaw.net Barton L. Kline, Senior Attorney Monica B. Moen, Attorney II Idaho Power Company O. Box 70 Boise, ID 83707 Mail: bkline~idahopower.com mmoen(illidahopower.com Brad M. Purdy Attorney at Law 2019 N. 17th Street Boise, ID 83702 Mail: bmpurdv(illhotmail.com R. Scott Pasley Assistant General Counsel R. Simplot Company O. Box 27 Boise, ID 83702 Mail: spaslev(illsimplotcom Mark C. Moench Senior Vice President - Law MidAmerican Energy Holdings Company 201 S. Main, Suite 2300 Salt Lake City, UT 84111 Mail: mcmoench(illmidamerican.com Anthony Yankel 29814 Lake Road Bay Village, OH 44140 Mail: tony(illyankel.net John R. Gale Vice President, Regulatory Affairs Idaho Power Company O. Box 70 Boise, ID 83707 Mail: rgale(illidahopower.com Arthur F. Sandack, Esq. 8 E. Broadway, Suite 510 Salt Lake City, UT 84111 Mail: asandack(illitower.net Donald L. Howell, II Deputy Attorney General Idaho Public Utilities Commission 472 W. Washington (83702) O. Box 83720 Boise, ID 83720-0074 Mail: donlhowell(illpuc.idaho.gov Terri Carlock Accounting Supervisor Idaho Public Utilities Commission 472 W. Washington O. Box 83720 Boise, ID 83720-0074 Mail: terri.carlock(illpuc.idaho.gov Randall C. Budge Racine, Olson, Nye, Budge & Bailey, Chartered 201 E. Center O. Box 1391 Pocatello, ID 83204-1391 Mail: rcb(illracinelaw.net Katie Iverson Brubaker & Associates 17244 W. Cordova Court Surprise, AZ 85387 Mail: kiverson consultbai.com David Hawk Director, Energy Natural Resources R. Simplot Company O. Box 27 I Boise , ID 83702 Mail: dhawk sim lot.com James R. Smith Monsanto Company Highway 34 North O. Box 816 Soda Springs, ID 83726 Mail: lim.r.smith(illmonsanto.com Alan Herzfeld Herzfeld & Piotrowski LLP 713 W. Franklin O. Box 2864 Boise, ID 83701 Mail: aherzfeld(ill net R. Scott Pasley Assistant General Counsel R. Simplot Company O. Box 27 Boise, ID 83702 Mail: s aslev(illsim lot.com Debbie DePetris Regulatory Analyst ~ E~!;N ~QN~ P Renewable Energy Action Plan May 30, 2007 ILJliL, 3D ;':1 j: 1:7 i \ , , ; ~' , i I: ! ~ UTiLI'! Ie:;) Cl)I....JS~1 Background MidAmerican Energy Holdings Company ("MEHC") made a commitment to work with the states to produce a Renewable Energy Action Plan ("the Renewable Plan ) as part of its acquisition of PacifiCorp. PacifiCorp committed to filing a ten-year plan, concurrent with its next Integrated Resource Plan ("IRP") filing to acquire 1 400 megawatts of new cost-effective renewable resources by 2015, including specific milestones over a ten year planning period as to when resources will be added. The Renewable Plan also includes a ten-year plan for installing transmission that will facilitate the delivery of renewable energy and the achievement of PacifiCorp s goal of acquiring at least 1 400 megawatts of cost-effective renewable resources by 2015. Consistent with the commitments, MEHC and PacifiCorp filed a preliminary plan for achieving the 1 400 megawatt renewable target on September 21 , 2006. This document is an updated Renewable Energy Action Plan and is being filed concurrent with PacifiCorp s 2007 Integrated Resource Plan in May 2007. Overview PacifiCorp s 2003 Integrated Resource Plan found that 1 400 megawatts of renewable resources using generic wind projects as a proxy, formed part of the least cost portfolio of resources. This was reaffirmed in the 2004 IRP and the 2004 IRP Update (both filed in 2005) and was subsequently adopted by MEHC as part of the transaction commitments. This plan reviews progress toward the goal of acquiring 1 400 megawatts of renewable resources by 2015 , and sets forth the Renewable Plan objectives and action items outlined to meet the MEHC commitment. The 2007 IRP filed concurrent with this filing raises the bar, selecting 2 000 megawatts of renewable resources targeted by the end of 2013. This Renewable Plan defines what PacifiCorp intends to consider as renewable resources in meeting the objective identifies renewable resource acquisitions to date and broadly characterizes activities currently underway (without revealing confidential commercially sensitive information). The Renewable Plan is divided into four categories: Resource Acquisition, Institutional, System Operations and Transmission. These components were designed to provide a foundation for the acquisition of cost-effective renewable resources by the target date. Finally, a summary is provided with a table showing the components of the plan together. Renewable Resources Definition for meeting the 1,400 Megawatt Target For the purposes of this document, PacifiCorp adopts a definition of renewable resources as follows: wind; waste; 1 Note , " waste" is included within the current Oregon definition of "renewable energy resources" (Le., Oregon restructuring legislation, Senate Bill 1149 (1999), see http://www.leg.state.or.us/99reg/measures/sbll00.dir/sbl149.en.html). However the broad eligibility of "waste solar photovoltaic or solar thermal energy; geothermal; biomass and biomass by products, excluding municipal solid waste or wood pieces that have been treated with chemical preservatives such as creosote pentachlorophenol or copper chrome arsenic, which include: (a) organic human or animal waste; (b) spent pulping liquor; (c) forest or rangeland woody debris from harvesting or thinning conducted improve forest or rangeland ecological health and to reduce uncharacteristic stand replacing wildfire risk; (d) wood material from hardwood timber grown on private, managed, or timberlands; (e) agricultural residues; (j) dedicated energy crops; and (g) biogas produced from organic matter, wastewater, anaerobic digesters or municipal solid waste. certified low impact hydroelectric or upgrades to existing hydroelectric facilities where the additional generation does not result in new water diversions or impoundments; wave, tidal, or ocean thermal energy; or hydrogen derived from photovoltaic electrolysis or a non-hydrocarbon derivation process. For the purposes of meeting the 1 400 megawatt target, PacifiCorp will utilize the nameplate generating capability of any renewable resource added to PacifiCorp s portfolio beginning in January 2003 (the date that PacifiCorp first committed to acquiring 1 400 megawatts of cost- effective renewable resources). These renewable resource additions will include all renewable resources as defined by the Renewable Resource definition. Purchases from Qualifying Facilities QFs ) under the Public Utility Regulatory Policies Act of 1978 ("PURP A") will count towards satisfaction of the capacity goal whether or not PacifiCorp is able to secure the renewable energy credits ("RECs ) associated with the QF production (refer to the QF discussion later in this Plan). Renewable Resource Acquisitions and Current Activities Table 1 , below, shows a snapshot of the renewable resource capacity additions since January 1 2003 that are either in service or have been committed to by the company as well as planned acquisitions through 2015. With the Marengo and Goodnoe Hills wind farms (currently under construction) in PacifiCorp s portfolio, PacifiCorp has met, and exceeded, its commitment to have 400 megawatts of new cost-effective renewable resources in its generation portfolio by December 31 2007. PacifiCorp will need to acquire approximately 750 megawatts of additional cost-effective renewable resources to meet the 1 400 megawatt target by 2015. Of that total, over projects is likely to be rescinded with the passage of an Oregon Senate Bill 838 (2007). PacifiCorp reserves the right to consider waste projects since it was an eligible renewable resource at the time the original 1 400 megawatt commitment was made. 500 additional megawatts are actively being pursued for addition to PacifiCorp s generation portfolio during 2008. Table 1 Renewable Resource Acquisitions (Nameplate MW) Projects Agreements 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 H dro Upl!:rades Lemolo #1 JC Bovle #1 JC Bovle #2 Rockv Reach Swift II Upgrade Swift 12Uegrade Swift 13 Upgrade BiomasslBiol!:as PPAI Douglas County Forest Products RickReal Dairv DeRuvter Dairv DrvCreek Landfill Evergreen Biooower (Freres) Rough and Ready Lumber PPA2 PPA3 Geothermal Blundell Uegrade ICove Fort 201 201 201 201 201 201 201 Wind Combine Hills PPA Wolverine Creek Leaning Junieer 101 101 101 101 101 101 101 101 101 101 Pioneer Ridge Spanish Fork Wind Park Mountain Wind I Mountain Wind II Schwendiman Fanns Under Construction Marengo 1401 1401 1401 1401 1401 1401 1401 1401 140 Goodnoe Hills 941 941 941 941 941 941 Under development and/or negotiations Alan Barklely I (Wasco)IC F Alan Barkley 2 (The Dalles)leF Wind Project Ongoing Negotiations 4 358 358 358 358 358 358 358 358 Proxy Resources (Unspecified) IRP Wind 2009 100 100 100 100 100 100 100 IRP Wind 2010 300 300 300 300 300 300 IRP Wind 2011 200 200 200 200 200 IRP Wind 2012 100 100 100 100 IRP Wind 2013 300 300 300 Total Renewable Additions 260 671 192 292 592 817 922 247 247 247 2 PacifiCorp is continuing to evaluate the economics of further expansion of the Blundell facility The table above includes several upgrades to existing hydroelectric facilities. These hydro upgrades provide capacity and energy without change to impoundments or existing stream flow regimes. Additional upgrades are under consideration but are not specified at this time. Consistent with the 2007 IRP, PacifiCorp plans to continue to pursue additional renewable resources at an average rate of 200 megawatts per year through 2013 , meeting the 1 400 megawatt commitment in 2010, well ahead of schedule. These are represented in the table above as proxy wind resources but will be selected from any available cost-effective renewable resources that meet the definition herein. In addition, PacifiCorp points out that the mix of renewable resources projected to be acquired beyond 2007 is today s projection. Future projections will be updated to account for changes in public policy, regulatory requirements, and technology advancements. State Renewable Portfolio Standards (RPS) A renewable portfolio standard (RPS) is a policy that obligates each retail seller of electricity to include in its resource portfolio (the resources procured by the retail seller to supply its retail customers) a certain amount of electricity from renewable energy resources, such as wind and solar energy. The retailer can satisfy this obligation by either (1) owning a renewable energy facility and producing its own power, or (2) purchasing renewable electricity from someone else s facility. Some RPS statutes or rules allow retailers to trade their obligation as a way of facilitating compliance with the RPS by avoiding the need to secure scarce or costly transmission service. Under this trading approach, the retailer, rather than maintaining renewable energy in its own energy portfolio, instead purchases tradable renewable energy credits ("RECs ) that demonstrate that someone else has generated the required amount of renewable energy. RPS policies are currently implemented at the state level, and vary considerably in their requirements with respect to time frame, resource eligibility, and treatment of existing plants arrangements for enforcement and penalties, and whether they allow trading of RECs.3 As of mid-2007, 23 states and the District of Columbia had adopted RPS regulations. The most recent adoption occurred in Washington, which passed a ballot measure in November 2006. Two states in PacifiCorp s service territory-California4 and Washington-now have an RPS in place. Oregon is considering such a standard during the current 2007 legislative session. Congress is expected to take up federal energy policy legislation, including the possibility of a federal RPS, as early as summer 2007. On the House side, Rep. Tom Udall (D-) has introduced legislation creating a 20 percent standard by 2020. Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-) has indicated he is planning legislation with a level of 15 percent by 2020. 3 See, http://www.eere.energy.gov/states/maps/renewable ..,portfolio - states.cfm4 California rulemaking, currently in progress, would strengthen the existing RPS, requiring a retail seller to increase its total procurement of eligible renewable resources to at least 33 percent of its retail sales no later than Dec. 31 2020. Reference: Senate Bill 411 (2007) The table below identifies each state s current or expected RPS procurement targets, expressed as a percentage of retail sales, as well as a federal RPS proposal currently being circulated by Senator Bingaman (D- Table 2 PrOi osed Year California Wasbin2ton Ore2on Federal 2007 17% 2008 18% 2009 19% 2010 20%75% 2011 20%75% 2012 20%75% 2013 20%7.50% 2014 20%50% 2015 20%15%7.50% 2016 20%15%50% 2017 20%15%11.25% 2018 20%15%11.25% 2019 20%15%11.25% 2020 33%15%20%15% 2021 33%15%20%15% 2022 33%15%20%15% 2023 33%15%20%15% 2024 33%15%20%15% 2025 33%15%25%15% The remainder of this paper provides a description and status of the additional activities PacifiCorp is undertaking to ensure acquisition of sufficient resource and transmission capability to meet the 1 400 megawatt renewable resource objective. Action Items Resource Acquisition Action Items The primary objective of the Renewable Energy Action Plan is to acquire the remaining renewable resources shown in Table 1 , above, to achieve the 1 400 megawatt commitment by the 2015 target date. These additional renewable resources must be cost-effective and provide sufficient capability to PacifiCorp s renewable generation portfolio to ensure compliance with the mandatory RPS targets through the Plan s current time horizon; e., by 2015. In order to secure cost-effective resources, the year by year acquisitions may vary from the schedule shown 5 Actual compliance obligations are likely to be achieved using eligible renewable resources, renewable energy credits, or a combination of the two. in Table 1. Issues that may affect attaining a systematic and constant rate of cost-effective acquisition are the unpredictable nature of the federal production tax credit (PTC), state-specific renewable portfolio standards, transmission limitations, carbon regulations, capital costs, and market prices. Although the PTC has consistently been extended since its inception, the extension has not always happened prior to the end of the previous term. This has caused major boom and bust cycles as the industry waits for Congressional action on extending the PTC. In one of its last actions of 2006 Congress extended the PTC at current levels, adjusted for inflation, through the end of 2008 . However, there is no certainty that it will continue past this date or, if it does, how long it will be extended or that it will be renewed at current levels.7 As long as acquisition of additional renewable resources remains cost-effective, PacifiCorp plans to continue to acquire such resources Action Item: Continue to negotiate for the acquisition of cost-effective renewable resources until such time as the 1 400 megawatt goal is achieved. Action Status: Multiple resources are currently being pursued and transmission service for specific resources has been requested. Congress has extended the PTC through the end of 2008, improving the outlook for the systematic development of renewable resources. The Company continues to support multi-year extensions of the PTC to provide stability to the industry. PacifiCorp maintains ownership of properties throughout its system. Given the proximity of some of these holdings to transmission facilities, the company proposes to engage in an assessment of wind resources on the existing properties that may have the potential for cost- effective resource development. Action Item: Perform a wind resource inventory and assessment on PacifiCorp property holdings by June 30, 2007. Action Status: The proposed inventory is currently underway and on schedule. Renewable resources can face important impediments relating to the high voltage transmission. system. Many potential renewable resources are located far from population centers where the power must ultimately be delivered. In addition, transmission lines are constructed to transfer the maximum capability of a power plant and wind projects usually have relatively low capacity 6 Tax Relief and Health Care Act of 2006 (H.R. 6408)7 PacifiCorp s parent, MidAmerican Energy Holdings Company, is actively lobbying Congress for a long-term extension of the FTC.8 Consistent with the IRP PacifiCorp expects to continue pursuing renewable opportunities beyond the 1 400 megawatt commitment as long as cost effective resources are available. factors, often generating about a third of the maximum capability on average. This can have the effect of tripling the cost of transmission service on a dollar-per-megawatt-hour basis. Another issue is that long distance transmission line construction may have more transfer capability than an individual project requires. This means that individual power project proposals often cannot absorb the costs of a full transmission construction project. Finally, the time required to site permit, design, and construct new transmission lines often does not align with the time frame for development of new wind sites. Transmission can require five or more years, whereas permitted and fully developed wind generation sites can be constructed upon in less than a year. PacifiCorp can help facilitate developing new areas for renewable resource development that are currently constrained by transmission transfer capability. This can be done through PacifiCorp Integrated Resource Plan in which competing regions are evaluated against one another including the cost of transmission and the relative value of power from renewable resources in the regions due to projected capacity factors and timing of generation (e., winter/summer day/night). Once the most economic regions are determined, PacifiCorp can evaluate project proposals in those regions in combination with existing or possible future transmission facilities. Action Item: Identify likely regions for new renewable resource development through the IRP and evaluate potential resources within those regions. Action Status: The 2007 IRP identifies various potential wind projects located in specific locations throughout the Northwest and Western United States. These proxy resources were developed from PacifiCorp experience with wind developers and from responses to the 2003 renewable resource request for proposals. As part of its renewable acquisition plan, PacifiCorp intends to conduct an economic assessment of biomass project opportunities, focusing on the Oregon biomass market segments. The main biomass market segments are wood mill waste and forest waste resulting from timber residue and forest thinning in the Pacific Northwest. The initial focus on Oregon biomass opportunities is a result of: 1) the greater number of economic incentives available in Oregon than other surrounding states and 2) the greater quantity of biomass generation that exists or is planned in Oregon than other surrounding states. Additional opportunities in the areas of sewage treatment plant digesters, dairy-based anaerobic digesters, and landfill gas to energy will be pursued as they are identified. Action Item: Perform an economic assessment of biomass project opportunities focusing on the Oregon biomass market segment. Action Status: PacifiCorp has completed an overall biomass strategy and is in the process of implementing the biomass strategy. PacifiCorp has signed Purchase Power Agreements with multiple biomass/biogas projects and expects to have at least 66 megawatts on line by the end of 2008, as shown in Table 1. Negotiations for additional development continue. Institutional Action Items PacifiCorp recognizes that a successful renewable resource acquisition plan necessitates active measures to lay a framework for continued progress. PacifiCorp s ability to meet the 1 400 megawatt target has been enhanced by the MEHC acquisition by MEHC's commitment to include an own/operate alternative in any commission-approved request for proposals for resources with a dependable life greater than ten years and greater than 100 megawatts. Action Item: Evaluate staffing needs with regard to renewable resource acquisition project management, and/or development by March 1 2007. Action Status: PacifiCorp has evaluated staffing needs with respect to new resource acquisition, re-allocated personnel to support the increased activity, and is currently evaluating the staffing need to support the future operational needs of recently acquired resources. As described previously, the uncertainty around the PTC extension impacts the renewable resource market by disrupting the systematic addition of new renewable resources through time. It also exacerbates the timing issues related to combining wind resources with the needed transmission expansions. It is incumbent on PacifiCorp to maintain a political presence in support of efforts to reduce the uncertainty surrounding renewal of PTC legislation. Action Item:Support efforts by renewable resource advocacy groups to reduce uncertainty in PTC extension and directly contact influential individuals to express PacifiCorp s support of certainty in the federal renewable resource production tax credit. Action Status: Congress has extended the PTC through the end of 2008. The Company continues to support efforts by renewable resource advocacy groups to enable multi-year extensions of the PTC to provide stability to the industry . An important mechanism for PacifiCorp s acquisition of renewable resources is through the acquisition of qualifying facilities (QFs) under the Public Utility Regulatory Policies Act (PURP A) of 1978. Under PURP A, utilities must purchase power from QFs at their avoided costs. The avoided cost methodologies are set by the various states, and the Federal Energy Regulatory Commission has deferred to the states the issue of whether the QF, or the purchasing utility, owns the RECs under QF contracts. Some states have granted ownership of RECs to the utilities, other states have granted ownership to the QF seller, and still others have not yet addressed the ownership issue at all. PacifiCorp s service territory encompasses states in all three of those conditions. As part of the contracting process, PacifiCorp will make a good faith effort to secure the RECs associated with a QF. However, those credits are a function of production (i.e., kilowatt-hour output); while PacifiCorp s commitment is a function of capacity (i.e., megawatts). Thus, if the QF otherwise satisfies the definition of a renewable resource, the QF capacity will count towards the satisfaction of the 1 400 megawatt commitment even if PacifiCorp is unsuccessful in securing the RECs.9 Table 3 , below, summarizes, by state, the current Commission treatment of REC ownership as it relates to QF contracts. Table 3 California Idaho Oregon Utah Washington Wyominj! For new CommIssion contracts, the PacifiCorp Renewable will decide QF owns but PacifiCorp owns the RECs Energy PacifiCorp is for the term of Certificates No decision when the QF allowed to owns but QF No decision the power position contract is purchase can buy back purchasefiled. RECs if not agreement over market Action Item: Work with state regulators to clarify REC ownership for PURPA QF contracts and applicability toward Federal and/or state-specific RPS standards. Action Status: PacifiCorp has been an active participant in each of its jurisdictions as the states works through the issues. Recent activity includes the treatment of RECs generated by QFs within the proposed Oregon RPS legislation Senate Bill 838. In the Washington Utilities and Transportation Commission RPS rulemaking, PacifiCorp filed commentslO which include a clarifying question regarding the definition of "renewable energy certificate" and ownership rights of "non-power attributes. 9 PacifiCorp acknowledges that for the purpose of certain regulatory reporting and customer disclosure provisions, it may not be able to identify the production of such QF resources as renewable ifPacifiCorp does not own the RECs. The absence of REC ownership, however, does not change the underlying fact that the generation capacity in PacifiCorp s portfolio is powered by a renewable "fuel."10 PacifiCorp s comments may be downloaded from http://www.wutc.wa.gov/rms2.nsf/ frm2005V w DS W eb?OpenF orm&vw2005L 1 DktSh=061895- Documents&NA V999999. Operational Action Items Continuous concern has been expressed regarding operational issues surrounding the relatively volatile and less-predictable nature of some renewable resources. Considerable progress has been made at PacifiCorp and in the industry generally in understanding the interactions between wind resources and utility systems. PacifiCorp has worked for over five years to quantify the costs associated with integrating wind into its system. As the amount of wind on the system increases it becomes ever more important for the utility to take operational actions to ensure that the system is capable of reliably integrating the amount of intermittent power anticipated. Resource variability can increase the intra hour regulation and load following requirements of the control area and increase overall ancillary service costs. As large blocks of variable resources are added to the system, new reserve resources capable of compensating for the intra hour variability may be required to insure system reliability. Toward that end, the following action items are proposed: Action Item:Continue an active role in the regional Northwest Power and Conservation Council Wind Integration efforts, and support the work of the American Wind Energy Association (A WEA) and the Utility Wind Integration Group. Action Status: PacifiCorp has participated in the Wind Integration efforts which subsequently issued the Northwest Wind Integration Action Plan in April 2007. Sixteen specific actions are identified. PacifiCorp will continue to participate in the newly chartered Northwest Wind Integration Forum whose role it is to provide leadership through the prescribed actions. Action Item: Continue to refine day-ahead hourly wind forecasts into daily system planning and scheduling. Action Status: PacifiCorp has entered into a three-year contact to provide wind generation forecasts effective April 1 , 2007. PacifiCorp will be gathering data to determine the value of the forecast. Action Item: A wind penetration study to reappraise wind integration costs and cost- effective renewable energy levels will be completed in the 2007 IRP. Action Status: In the 2007 IRP, Appendix J, PacifiCorp builds on earlier studies with upgraded and updated wind generation data. The benefits of geographic diversity, contribution to peak capacity, and the cost of incremental reserves are considered. Estimates of integration costs are consistent with earlier studies. Transmission Action Items PacifiCorp plans to facilitate the acquisition of wind projects through construction of new cost- effective transmission facilities. Two transmission paths have been identified: Path C from southeast Idaho into northern Utah, and Walla Walla to Yakima area loads. These paths are potentially cost-effective projects that can help to facilitate the development of economic wind projects. Action Item a): Complete Walla Walla to Yakima area transmission upgrade by end of 2010 if cost-effective. b): Complete Path C upgrade by end of2010 if cost-effective. c): An assessment of transmission options for PacifiCorp system identified in the Rocky Mountain Area Transmission Study (RMA TS), scenario 1 related to facilitating additional generation at Jim Bridger and, on equal footing, new cost-effective wind resources. An assessment of transmission options will be completed in the 2007 IRP. Action Status:Transmission reviews have found that both of the planned transmission upgrades (Walla Walla to Yakima and the Path C Upgrade) are cost effective. These projects are in progress and expected to be available by the end of2010. In addition to the two transmission lines listed above, the 2007 IRP considered many transmission options and selected several new line segments from the Bridger area and throughout Utah to be available in 2012 and beyond. This new transmission would support the construction of new resources in Utah and Wyoming including Wyoming wind resources. The details are provided in Table 4, below. Table 4 Transmission Resource Investment Schedule for All Group 2 Portfolios Transfer Capability, Me2awatts Resource 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 East Path C Upgrade: Borah to Path-C South to Utah North 300 Utah - Desert Southwest (Includes Mona - Oquirrh)600 Mona - Utah North 400 Craig-Hayden to Park City 176 Miners - Jim BridJ!;er - Tenninal 600 Jim Bridger - Tenninal 500 West Walla Walla - Yakima 400 West Main - Walla Walla 630 Total Annual Additions 700 630 776 500 Source: PacifiCorp s 2007 IRP, Table 7.36 Ac t i o n P l a n S u m m a r y Th e f o l l o w i n g t a b l e l i s t s t h e a c t i o n i t e m s i d e n t i f i e d a b o v e , a n d a s s o c i a t e d m i l e s t o n e s . 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IA I Ev a l u a t e s t a f f i n g n e e d s w i t h r e g a r d t o Co m p l e t e St a f f i n g n e e d s h a v e b e e n e v a l u a t e d re n e w a b l e r e s o u r c e a c q u i s i t i o n s a n d an d s e v e r a l s t a f f i n g a d j u s t m e n t s op e r a t i o n s b y M a r c h 1 , 2 0 0 7 . ha v e b e e n e f f e c t e d . IA 2 Su p p o r t e f f o r t s b y r e n e w a b l e r e s o u r c e On g o i n g a d v o c a c y o f P T C PT C h a s b e e n e x t e n d e d t o t h e e n d ad v o c a c y g r o u p s t o r e d u c e u n c e r t a i n t y i n ex t e n s i o n , m a i n t a i n m e m b e r s h i p of 2 0 0 8 . 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Ac t i o n P l a n w a s p u b l i s h e d b y t h e Wi n d I n t e g r a t i o n e f f o r t s , a n d s u p p o r t t h e No r t h w e s t P o w e r a n d C o n s e r v a t i o n wo r k o f t h e A m e r i c a n W i n d E n e r g y Co u n c i l i n A p r i l 2 0 0 7 . P a c i f i C o r p As s o c i a t i o n a n d t h e U t i l i t y W i n d wi l l c o n t i n u e p a r t i c i p a t i o n i n t h e In t e g r a t i o n G r o u p . ne w l y c h a r t e r e d W i n d I n t e g r a t i o n Fo r u m . OA 2 In c o r p o r a t e d a y - ah e a d h o u r l y w i n d Co m p l e t e A t h i r d - pa r t y v e n d o r h a s b e e n fo r e c a s t s i n t o p r e - s c h e d u l e s f o r w i n d co n t r a c t e d t o p r o v i d e h o u r l y w i n d pr o j e c t s a s p a r t o f t h e P a c i f i C o r p s y s t e m . fo r e c a s t s f o r c u r r e n t w i n d ge n e r a t i o n f o r t h e n e x t t h r e e y e a r s . OA 3 A w i n d p e n e t r a t i o n s t u d y t o r e a p p r a i s e In c l u d e d i n t h e 2 0 0 7 I R P Ap p e n d i x J t o t h e 2 0 0 7 I R P wi n d i n t e g r a t i o n c o s t s a n d c o s t e f f e c t i v e in c l u d e s a n u p d a t e d a p p r a i s a l o f re n e w a b l e e n e r g y l e v e l s w i l l b e c o m p l e t e d in t e g r a t i o n c o s t s a n d c o s t e f f e c t i v e in t h e 2 0 0 7 I R P le v e l s o f w i n d r e s o u r c e s . TA I Co m p l e t e W a l l a W a l l a t o Y a k i m a a r e a De c e m b e r 2 0 1 0 Pa c i f i C o r p t r a n s m i s s I O n i s m o v i n g tr a n s m i s s i o n u p g r a d e ah e a d w i t h t h e W a l l a W a l l a t o Ya k a m a p r o j e c t . TA 2 Co m p l e t e P a t h C u p g r a d e De c e m b e r 2 0 1 0 Pa c i f i C o r p t r a n s m i s s i o n I S m o v i n g ah e a d w i t h t h e P a t h C u p g r a d e pr o j e c t . TA 3 Tr a n s m i s s i o n a s s e s s m e n t o f a d d i t i o n a l In c l u d e d i n t h e 2 0 0 7 I R P Th e 2 0 0 7 I R P p r e f e r r e d p l a n ge n e r a t i o n o n e q u a l f o o t i n g w i t h w i n d in c l u d e s n e w t r a n s m i s s i o n f a c i l i t i e s re s o u r c e s fo r t h e W y o m i n g l U t a h a r e a t h a t wi l l s u p p o r t t h e c o n s t r u c t i o n o f ne w r e s o u r c e s i n c l u d i n g w i n d i n th a t a r e a .