20091120Reply Comments.pdf

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RECEI
November 20, 2009 2009 NOV 20 AM 9: 20
201 South Main, Suite 2300
Salt Lake City, Utah 84111
VL OVERNIGHT DELIVERY
IDAHO
UTiLITiES
Idaho Public Utilties Commssion
472 West Washington
Boise,ID 83702
Att: Jean Jewell
Commission Secreta
Re: Rocky Mountain Power's Reply Comments to Staff's position on Revising the
Company's Wind Integration Rate in Case No. PAC-E-09-07
Dear Ms. Jewell:
Please find enclosed the original and seven (7) copies, along with a compact disk, of reply
comments to stas position on the Company's petition to revise its wid integration rate.
On September 11, 2009 Rocky Mountain Power, a division of PacifiCorp ("the Company"),
petitioned the Idao Public Utilities Commssion ("Commssion") to issue an Order increasing
the published avoided cost wind integrtion rate applicable to purchases by the Company for
wind-powered QFs from $5.10 to $9.96 per MWH. On October 30, 2009 Commisson staff
provided comments on the Company's application. The Company respectfuly request
consideration of its reply comments.
Sincerely, .
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J/:J ~~ Llsen
Vice President, Regulation
Cc: Service List
Enclosure
CERTIFICATE OF SERVICE
I hereby certify that on ths 20th day of November, 2009, I caused to be served, via E-mail
(if provided) and Overnght Delivery, a tre and correct copy of Rocky Mountan
Power's Reply Comments in PAC-E-09-07 to the followig:
An English Gravatt
Policy Director
Renewable Nortwest Project
917 SW Oak St, Suite 303
Portland, OR 97205
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Suzane Leta Liou
Senior Policy Advocate
Renewable Nortwest Project
917 SW Oak St, Suite 303
Portland, OR 97205
Suzanne(imp.org
Care Meyer
Coordinator, Administrati
Danel E. Solander
Sr. Counel
Rocky Mountan Power
201 South Main, Suite 2300
Salt Lake City, Uta 84111
Telephone: [phone]
Facsimile: 801-220-3299
RECEI D
2009 NOV 20 AM 9: 20
Attorney for Rocky Mounta Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMSSION
IN THE MATTER OF THE PETITION OF )
ROCKY MOUNTAI POWER FOR AN )
ORDER REVISING THE WIND ) No. PAC-E-09-07
INTEGRATION RATE FOR WID- )
POWERED SMAL POWER GENERATION ) REPLY COMMENTS
QUALIFYING FACILITIES )
)
)
BACKGROUND
Rocky Mountain Power (the "Company") filed a Petition with the Commission on
April 23, 2007, in Case No. PAC-E-07-07 requesting the Idaho Public Utilities
Commssion (the "Commission") approval of utility-specific wind integration
adjustments to the published avoided costs rates. The Company curently adjusts the
published avoided cost rates by $5.10 per megawatt-hour ("MWh") to account for the
cost associated with wind integration. In a subsequent Order No. 30497, Case No. PAC-
E-07-07, the Commission approved Settlement Stipulation filed in Case No. PAC-E-07-
07. Pursuant to that Stipulation, the Company recommended that the published avoided
cost rates, for purchases by Rocky Mountain Power, be increased from $5.10 per MWh to
$9.96 per MWh, to recover the cost associated with the integrating wid resources. This
integration cost would be applied and adjusted against the scheduled avoided cost rates
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for all wind projects with one exception. The exception would apply to a QF developer
that agrees under the QF power purchase agreement to a firm hourly schedule using firm
transmission via a third par transmission provider. When this exception applies the
published avoided cost would not be adjusted for wind integration costs. The $9.96 per
MWh represents the cost associated with integrating a wind resource consistent with the
analysis provided in the Company's 2008 Integrated Resource Plan, which was
acknowledged by the Idaho Commission on September 15,2009.
On October 30, 2009, Idaho Commission Sta submitted comments that support
the Company raising their wid integration cost adjustment. Sta, however,
recommended that the wid integrtion cost be capped at $6.50 per MWh to align with
the imposed cap in the individua Settlement Stipulation for both Idaho Power and A vista
while acknowledging that PacifiCorp's Settlement Stipulation does not contan such a
cap.
Range of Wind Integration Adjustment
Staff states that PacifiCorp's recent wind integration study is more accurate than
its intial study and agrees that the Company's proposed wind integration cost of $9.96
per MWh is in the same general range of the results from Idaho Power and A vista's wind
integration study as well as the results from other regional utilties including BP A and
Portland Genera Electrc. Reviews conducted by the Company in its 2008 IRP process
showed that the wind integration costs presented by other utilties in the region range
from about $6 per megawatt-hour to $12 per megawatt-hour. The Company's wind
integration costs are reasonably withn the rage of the ones calculated by other entities
and are based on analysis that is techncally sound. The evidence from the studies shows
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that the Company does incur costs to integrate wind on a day-ahead and hour-ahead basis
and the Company should not be prohibited from recovering prudently incured costs
while it continues to develop and refine its wid integration costs.
Wind Integration Adjustment Cap
The Company's reply comments will focus on three key issues: First, the premise
of each utility's settlement was to have a' wind integration cost reflective of that utility's
system and the impact of wind on the system. Staffha proposed capping the Company's
wind integration cost adjustment at $6.50 per MWh to be consistent with Idaho Power's
and Avista's Settlement Stipulations even though PacifiCorp's Settlement Stipulation did
not contain such a cap. Second, the $6.50 cap proposed by staff is based on cost
assumptions that are at least two years old. Thd, the wid resources on PacifiCorp's
system have quadrpled from 2007 to 2009. PacifiCorp owns or is acquing the output
from 1,300 MW of wind resources curently on-line, which by itself dwars the amount
of wind integration of the other two utilties. Therefore, the proposed $9.96 per MWh is
much more reflective of the Company's overall system wid integration and is
appropriate considering a much higher wid penetration rate.
RESPECTFULLY SUBMITTED this 20th day of November, 2009.
Rocky Mounta Power
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