20070924Gardner Comments.pdf

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TO: The Idaho Public Utilities Commissioners
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FROM: John F. Gardner, Ph., P., Professor of Mechanical EIj1j/",~~nDS COMt\1IbSIO;
2700 Harmony St., Boise, ID 83706
208.336.0767
jfgardner~cableone.net
ZOU1 SEP 2. Pr1 4: 45
RE: PAC-O7-
Date: 21 September 2007
I offer these comments regarding the above-referenced case currently before the
commission dealing with the future of wind energy projects under the provisions
of the federal PURPA law.
I am a professor of mechanical engineering, currently at Boise State University,
but have been a professor for over 20 years with more than 50 referred
publications and 2 textbooks to my name. For the past 4 years , my research has
been focused on wind turbine technology. Most recently, my team has been
focusing on local energy storage for wind farms , a technology that has the
potential for mitigating the intermittency problems which lie at the root of the
cases you now consider.
I am considered an expert in dynamic modeling of energy systems and I have a
thorough understanding of the intricacies involved in the issues presented here. I
have read the wind integration studies offered by the utilities as well as several
others commissioned throughout the country in the past years.
I have no financial interest (that I know of) in a wind farm, current or planned.
Neither am I a shareholder (to the extent that I'm aware , some of my retirement
investments may well hold some stock in one of the utilities) in any of the
companies who are party to the complaint.
I offer my comments as a state employee who has particular expertise in the
matter in front of the commission and I do so in a sincere attempt to be impartial
and unbiased.
PacifiCorp s request asks that the current limit of 1 OOkW for wind-powered
projects governed by the PURPA rules be restored to 10 MW under a number of
conditions. I would like to address the request of this petition point-by-point, but
first let me comment on the overall request.
The lowering of the cap for wind-powered PURPA projects to 100kW effectively
halted all development of small wind farms in the state of Idaho; This seems to
run counter to the current Idaho Energy plan (2007) which calls for, among other
SEP-21-2007 02: 54P FROM: BOISE STATE COEN 2084264800 TO: 83343762
things, the protection of "Idaho s public health , safety and natural environment
and conserve Idaho s natural resources" (objective 3) and the promotion of
sustainable economic growth , job creation and rural economic development"
(Objective 4). In addition , the development of wind-powered projects under the
provision of PURPA promotes a distributed, diverse and robust power generation
system in Idaho. Finally, as the country and the world moves toward a system of
constraining the way in which carbon dioxide is introduced into the atmosphere
we should be embracing and encouraging the development of energy systems
not subject to the inevitable constraints (and related price increases) that will be
placed on fossil fuels. I would welcome the granting of this request.
Now I'll comment on the conditions requested by PacifiCorp.
Condition 1: Reducing the published avoided cost rates applicable to purchases
by Rocky Mountain Power of electric power from wind-powered QFs by $5.04 per
MWh, which amount represents the inflation-adjusted integration costs of that
wind power, to be applied against published avoided cost rates except in those
circumstances where the QF developer agrees in the power purchase agreement
with Rocky Mountain Power to deliver QF output to Rocky Mountain Power on
firm hourly schedule;
This condition, charging a $5.04/MWhr integration fee, stands in stark contrast to
the requests of the other two investor-owned utilities currently doing business in
Idaho. It amounts to roughly one-half of the fees requested by Avista and Idaho
Power and is much more in line with the costs of integration found by studies
throughout the country. While it's a bit higher than similar fees across the
country, it is the most reasonable and defensible of the proposals put forward by
the three investor-owned utilities related to this issue.
Condition 2: Removing the requirement that the 90%/110% performance band
be applied to purchases from wind-powered QFs;
On the elimination of the 90/100 rule, most people are in complete agreement.
My colleagues involved in wind energy research (not commercial operations)
across the country are perplexed and troubled by the existence of this
. requirement. It requires that small wind farm operators (spanning in size from
the approximately 300 kW Lewandowski Farm to the 10.5 MW Fossil Gulch
installation) predict the wind conditions 4 to 6 months in advance. Anyone who
watches the nightly weather report and looks out the window the following
morning understands the impossible nature of that requirement.
Therefore, I would argue that the rule should be eliminated regardless of the
other actions by the commission. It provides no real value to the utilities or the
OF operators and serves only to penalize the operators of small wind farms, and
does so in an arbitrary and unpredictable manner.
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I concur with the request that the rule be eliminated.
Condition 3: Authorizing Rocky Mountain Power to purchase state-of-the-art wind
forecasting services to provide Rocky Mountain Power with forecasted wind
conditions in those geographic areas in which wind generation resources are
located, provided that QFs will reimburse Rocky Mountain Power for their share
of the on-going cost of the wind forecasting service, in proportion to their
percentage share of the wind-generator capability being supplied to Rocky
Mountain Power from that area;
It's important to note that, according to the best experts in the field of wind
forecasting, the best current predictor of wind is persistence. That is, your highest
chance of being correct in prediction what the wind will do in the next hour is to
say that it will continue to do what it has been doing in the previous hour.
Clearly, such a prediction is often wrong, yet we can do no better than that.
Therefore , it is unclear that such 'state of the art' forecasting models are effective
enough to justify their cost. That said, this condition is less vague than the
similar request from Avista and Idaho Power. It does not limit the use of wind
forecasting tools to PURPA projects and is more explicit about how the costs
would be computed. However 1 believe the utilities need to make a better case
and be more explicit about both the efficacy of these models, the actual costs
associated with them, and how they are to be charged.
Condition 4: Requiring QFs to deliver mechanical availability guarantee" to
Rocky Mountain Power to demonstrate monthly, except for scheduled
maintenance and events of force majeure or uncontrollable force, that the QF
was physically capable and available to generate full output during 85% of the
hours in month;
This request seems both reasonable and prudent.
Condition 5: Clarifying the rules governing the entitlement to published rates to
prevent all QFs, whether wind or non-wind, capable of delivering more than 10
aMW per month from structuring or restructuring into smaller projects for the
purpose of qualifying for the published avoided cost rates.
This point deals with legal and business issues which lie far outside my
expertise.
Condition 6: Clarifying that the cap on entitlement to published avoided 'Cost
rates shall be restored to 10 aMWonly until PacifiCorp renewable targets for
each calendar year in the most recently acknowledged Integrated Resource Plan
are met.
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Having insufficient time to study this particular issue (for example , what are the
current targets? How often are they adjusted?) I am unable to offer an informed
opinion on this point.
In closing, I respectfully remind the commissioners of the 2007 Idaho Energy
plan, which calls for the following actions:
1, Idaho utilities should acquire reliable, diverse, cost effective and
environmentally sound resource portfolios sufficient to meet their customers' long-
term electricity needs.
2. Idaho utilities should have access to a broad variety of resource options
consistent with Idaho s policy objectives, including both renewable and
conventional resources.
5. When acquiring resources, Idaho and Idaho utilities should give priority to: (1)
Conservation, energy efficiency and demand response; and (2) Renewable
resources; recognizing that these alone may not fulfill Idaho s growing energy
requirements,
7. It is Idaho policy to encourage the development of customer-owned and
community-owned renewable energy and combined heat and power facilities.
10. Idaho and Idaho utilities should encourage technologies that minimize
emissions of harmful pollutants and consumptive use of water.
11. Idaho and Idaho utilities should prepare for the possibility of federal regulation
of greenhouse gas emissions.
Clearly, any policy that encourages the development of wind farms in Idaho is
consistent with all of these policy goals. Conversely, policies which discourage,
or preclude the economic viability of, wind farms in Idaho stand in direct conflict
with these goals.
Finally, I encourage the commission to take a long view in debating these
requests. The question we should ask is: What path will lead to lower power
rates 5 or 10 years from now? Like any prudent investment portfolio, an
approach in which geographic , fuel source and ownership is diversified is the
most conservative and safest approach.
I would be pleased to make myself available to the Commissioners or the staff of
the Public Utilities Commission at any time in the future.
Sincerely,~f ;j.L
John F. Gardner, Ph., P.
Professor of Mechanical & Biomedical Engineering