20070702notice_of_filing_order_no_30362.pdf

Office of the Secretary
Service Date
July 2, 2007
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE FILING BY
ACIFICORP DBA ROCKY MOUNTAIN
POWER OF ITS 2007 INTEGRATED
RESOURCE PLAN (IRP)
CASE NO. PAC-07-
NOTICE OF FILING
NOTICE OF
MODIFIED PROCEDURE
NOTICE OF COMMENT
DEADLINE
ORDER NO. 30362
On May 30, 2007, PacifiCorp filed its 2007 Integrated Resource Plan (IRP) with the
Commission pursuant to the biennial filing requirement mandated in Order No. 22299, as
modified in Order No. 30262. PacifiCorp (dba "Rocky Mountain Power ) serves approximately
6 million retail energy customers over a service area encompassing portions of six western
states: Utah, Oregon, Wyoming, Washington, Idaho and California. Rocky Mountain Power
serves approximately 68 000 customers in southeastern Idaho. PacifiCorp filed its last IRP with
the Commission on January 1 , 2005. In 2006, the Company was acquired by Mid American
Energy Holdings Company ("MEHC"), a global energy resource production company and
resource supplier. In this Notice the Commission establishes a deadline for written comment
regarding PacifiCorp s IRP filing.
NOTICE OF IRP FILING
YOU ARE HEREBY NOTIFIED that PacifiCorp states that its purpose in preparing the
IRP is to: "(1) determine future long term resource needs and develop an informed and
comprehensive assessment of the cost and risk implications of alternatives for meeting those
needs, and (2) develop a framework of future actions to ensure PacifiCorp continues to provide
reliable, least-cost service with manageable and reasonable risk to its customers.Transmittal
Letter at 1-2. PacifiCorp cites the contemporary development of regulatory policies targeted at
reducing the "carbon footprint of utilities" and the increased emphasis on the development of
renewable energy as specific challenges it is facing. Id.
NOTICE OF FILING
NOTICE OF COMMENT DEADLINE
ORDER NO. 30362
YOU ARE FURTHER NOTIFIED that prior to submitting its IRP, the Company studied
twelve (12) separate portfolios in order to identify a portfolio that demonstrated, through
projected statistical analysis, superior performance in terms of estimated cost, customer rate
impact, cost versus risk balance across five different CO2 cost adder levels and supply reliability.
See PacifiCorp 2007 IRP at 6, 139. Ultimately, the Company settled upon a preferred portfolio
that would include the acquisition of the following energy resources:
000 MW of renewable resources by 2013
100 MW of load controls beginning in 2010
West-side combined cycle combustion turbine ("CCCT") in 2011
High-capacity-factor baseload resources to PacifiCorp s eastern system in 2012
and 2014
Eastern system CCCT's in 2012 and 2016
Firm market purchases to meet system needs beginning in 2010
Transmission AdditionslUpgrades between 2010-2014 to support resources
See id. at 7.
Forecast Load Growth
YOU ARE FURTHER NOTIFIED that PacifiCorp estimates that customer loads will
grow at an average rate of 2.5% annually from 2007 to 2016. See id. at 4 (Figure 1.1).
PacifiCorp s eastern system (Idaho, Utah and Wyoming) continues to display a significantly
higher rate of energy growth than its western system, with an annual average energy growth rate
of 3.2% and 0.8% respectively. The annual growth for the Idaho service area over that same 10-
year period is estimated to be 1.3 %. See id. at 3 (Table 1.1).
YOU ARE FURTHER NOTIFIED that the Company currently forecasts a summer peak
resource deficit beginning in 2008 to 2010 depending on whether a 12% or 15% planning reserve
PR") margin is used. See id. In 2009, the Company will become energy deficient on an annual
basis, based on a 12% planning reserve margin. Id. Beginning in 2010, its system will operate at
a 791 MW deficiency, again based upon a 12% PR margin. Id. The energy resource deficit will
increase to 2 400 MW by the year 2012 and 3 000 MW by 2016. Id.
NOTICE OF FILING
NOTICE OF COMMENT DEADLINE
ORDER NO. 30362
Modeling and Risk Analysis
1. IRP Modeling
PacifiCorp employed two distinct modeling tools during its portfolio analysis:
Capacity Expansion Module (CEM); and 2) Planning and Risk (PaR) Module. See id. at 5. The
two analytical models assisted the Company in arriving at the "least-cost optimization (of)
resource options" and developing "risk-adjusted portfolio performance measures.Id. The
Company s modeling approach consisted of "resource screening, risk analysis portfolio
development and detailed production cost and stochastic risk analysis.Id.
In order to predict the most desirable resource options, PacifiCorp used the CEM to
develop and analyze sixteen separate "alternative future scenarios" involving a mixture of
several variables, including potential CO2 regulatory costs, natural gas prices, wholesale
electricity prices, retail load growth and the scope of renewable portfolio standards. Id. at 6, 139.
The Company views the preferred resource portfolio as one that manifests itself under a
reasonably wide range of potential future" scenarios. Id. Once those resource option portfolios
were effectively identified, the PaR Module was then used to simulate the potential risk and cost
of each through a random sampling process of the following variables: loads, commodity natural
gas prices, wholesale power prices, hydro energy availability and thermal unit availability. See
id.
CO2 Emissions
YOU ARE FURTHER NOTIFIED that PacifiCorp s IRP also addressed the potential
costs/effects of CO2 emission compliance. See id. at 6. According to the Company, the costs
associated with CO2 emission compliance are not normally amenable to statistical analysis. Id.
Thus, rather than attempting to ascertain a specific cost, the Company elected to treat the
potential emission costs as "a scenario risk" in its overall IRP analysis. Id. The initial
risk/analysis portfolios were analyzed under five different CO2 cost adder levels - $O/ton, $8/ton
$15/ton, $38/ton, and $61/ton (adjusted for projected 2008 dollars) - in order to determine which
portfolio was most prevalent across a "reasonably wide range of potential futures.Id.
Action Plan
YOU ARE FURTHER NOTIFIED that prior to the 2011-2012 period, PacifiCorp plans
to address its projected resource deficits through the procurement of additional renewable
resources, demand side programs and market purchases. See id. at 3. The Company has made
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NOTICE OF COMMENT DEADLINE
ORDER NO. 30362
requests for proposal ("RFP") for additional base load resources, renewable resources and
demand side resource programs benefiting the eastern portion of its service area. Id.
Faced with the likelihood of energy deficiencies, PacifiCorp has taken recent steps
toward increasing its resource production. In June 2006, PacifiCorp converted its Currant Creek
facility from a single cycle combustion turbine to a combined cycle combustion turbine
CCCT"
).
See id. at 61. It will add another CCCT to its Lake Side facility this month. Id.
These additions will be offset by the expiration of two (2) resource procurement contracts, a 400
MW agreement with TransAlta Energy Marketing and a 575 MW BP A peaking contract, in June
2007 and August 2011 , respectively. Id.
YOU ARE FURTHER NOTIFIED that the IRP professes the Company s commitment to
the following additional measures in order to meet future resource needs:
Wind Renewal:
Continue to develop renewable resources, including wind power. PacifiCorp has
acquired 346 MW of wind power toward the fulfillment of its 2004 IRP goal of
procuring 400 MW by 2007. The Company states that it will continue to acquire
additional renewable resources on its way toward procuring a total of 1,400 MW
of renewable resources by the year 2010 and 2 000 MW by the year 2013.
PacifiCorp has recently added two wind projects, Leaning Juniper 1 and Marengo.
Energy Efficiencies:
Increase its commitment to so-called "energy efficiency initiatives. The
Company will continue to run programs to acquire 250 aMW of cost-effective
energy efficiency and an additional 200 aMW if cost-effective initiatives can be
identified.
Load Control:
Expand upon its existing load control programs. PacifiCorp anticipates a system-
wide average load growth of 2.5 percent per year from 2007 through 2016
throughout its service area. Average load growth from its Idaho customers should
be around 1 percent per year. The Company anticipates further expansion of its
existing 150 MW of irrigation and air conditioning load control program in Utah
and Idaho. In 2010, a 100 MW irrigation load control program will be added and
will be split between its eastern and western systems.
NOTICE OF FILING
NOTICE OF COMMENT DEADLINE
ORDER NO. 30362
Integrated Environmental Issues:
Continue to study and address contemporary environmental issues. The Company
asserts that it will assume a leadership role in discussions with stakeholders
involving global climate change issues; and continue to investigate the
development of carbon reduction technology, specifically clean coal
sequestration and nuclear power.
Transmission:
Address existing problems affecting transmission of resources to customers. The
Company plans an expansion of its transmission system and an upgrade in its
transmission infrastructure and flexible resources, such as natural gas, in order to
meet the anticipated customer loads found in the preferred portfolio.
Diversification:
Diversification of base load and intermediate load resources. The Company
reiterated its desire to add approximately 1 700 MW of base load resources, a mix
of thermal resources and market purchases, to its eastern system between 2012
and 2014. Further, it will seek to acquire an additional 200 to 1 300 MW of
thermal and market purchase resources to benefit its western system between
2010 and 2014.
See id. at 10 221 , 224-27(Table 8.2).
NOTICE OF COMMENT DEADLINE
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the Company
filing in Case No. PAC-07-11 and finds it reasonable to require written comments concerning
PacifiCorp s IRP to be filed with the Commission no later than Tuesday, August 21, 2007.
Written comments concerning this filing should be mailed to the Commission and PacifiCorp at
the addresses reflected below:
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ill 83720-0074
PacifiCorp d/b/a Rocky Mountain Power
c/o Brian Dickman, Idaho Regulatory Affairs
Manager
201 S. Main Street, Suite 2300
Salt Lake City, UT 8411
Street Address for Express Mail:
472 W. Washington Street
Boise, ill 83702-5983
Mail: brian.dickman~pacificorp. com
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
NOTICE OF FILING
NOTICE OF COMMENT DEADLINE
ORDER NO. 30362
Commission s home page located at www.puc.idaho.gov. Click the "Comments and Questions
icon, and complete the comment form, using the case number as it appears on the front of this
document. These comments must also be sent to PacifiCorp at the e-mail addressees) listed
above.
YOU ARE FURTHER NOTIFIED that PacifiCorp s IRP filing can be viewed at
www.puc.idaho.gov by clicking on "File Room" and "Electric Cases " or it can be viewed during
regular business hours at the Idaho Public Utilities Commission, 472 West Washington St, Boise
Idaho and PacifiCorp s Office, 201 S. Main Street, Suite 2300, Salt Lake City, UT 8411.
YOU ARE FURTHER NOTIFIED that the Idaho Public Utilities Commission has
jurisdiction over PacifiCorp, its filing and the issues pertaining to this case pursuant to Title
of the Idaho Code and specifically Idaho Code 61-401.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission s Rules of Procedure, IDAP A 31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that persons interested in submitting written comments
regarding PacifiCorp s IRP should do so no later than August 21 2007.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this o2'~~ay of
July 2007.
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NOTICE OF FILING
NOTICE OF COMMENT DEADLINE
ORDER NO. 30362