20160301Decision Memo.pdf

DECISION MEMORANDUM
COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
RICK STERLING
DAPHNE HUANG
DATE:
RE:
FEBRUARY 24,2016 ? nc- E 'ttr-ol
REQUEST OF ROCKY MOUNTAIN POWER TO UPDATE THE WIND
INTEGRATION CHARGE APPLIED TO ITS PURPA PUBLISHED
AVOIDED COST RATES
On January 20,2016, Rocky Mountain Power (Rocky Mountain; Company) submitted a
request to update the wind integration charge which is applied as a discount to the Company's
PURPA published avoided cost rates. The
No. lAl-E -A7 -07 . For reasons set forth below, Staff recommends that the Commission assign a
new case number an{.,i-9s.9-e_.41.t grdegru}ing the Company's request without further process.
BACKGROUND
A stipulation approved in Order No. 30497 instituted a wind integration adjustment to
published avoided cost rates for wind qualifying facilities (QFs). In the stipulation, the parties
agreed that "Rocky Mountain Power shall hereafter file notice with the Commission of any
changes to its wind integration charge as reflected in subsequent changes to its flntegrated
Resource Plan] IRP." Pursuant to the Order, wind integration costs were last updated in Case
No. PAC-E-09-07.
On March 31,2015, PacifiCorp filed its 2015 tRP with the Commission, and on October
9, 2015, the Commission acknou'ledged the Company's IRP. OrderNo. 33396. The 2015 IRP
contains the 2014 Wind Integration Study. Appendix H to the 2015 IRP. The Company
proposes that the wind integration adjustment to published avoided cost rates for wind QFs be
DECISION MEMORANDUM FEBRUARY 24,2016
updated to reflect the costs determined in the 2014 Wind Integration Study, which calculates a
wind integration rate of $3.06 per MWh.
STAFF REVIEW
Rocky Mountain's 2014 Wind Integration Study (Study) was prepared as a part of the
Company's 2015 IRP. The Study engaged a technical review committee consisting of at least
five recognized wind integration experts. Furthermore, the IRP process itself, of which the
Study is an important part, is a public process involving months of analysis and includes active
participation by numerous parties including Commission staff from multiple states, customer
group representatives, environmental groups and other advocacy groups. Consequently, Staff
believes there has already been ample opportunity for review and comment cn the assumptions,
analytical methods and results of the Study. Because Staffbelieves the Study has been
adequately vetted already, Staffdoes not believe it is neeessary or productive for the
Commission to accept comments.
Staffbelieves that the $3.06 per MWh wind integration charge determined in the study is
reasonable. The current wind integration charge is $6.50 per MWh as established in Order No.
31021, so the new proposed rate would be a decrease - to less than half of the current rate.
Because the integration charge is applied as a discount to avoided cost rates, a decrease in the
charge would be favorable to QFs; thus, Staff believes opposition to the change in the integration
charge is highly unlikely.
Moreover, the wind integration charge is applied to pubtished avoided cost rates, whose
eligibility is now limited to wind facilities smaller than 100 kW. See Order No. 32697. Wind
facilities smaller than 100 kW are very rare, and Staffknows of no planned wind projects that
would be impacted by a change in the wind integration charge. Existing wind QFs will also not
be impacted by the change because they will continue to be subject to the wind integration
charges already contained in their contracts and that were established at the time each contract
was signed.
DECISION MEMORANDUM FEBRUARY 24,2016
RECOMMENDATION
Staffrecommends that the Commission approve a wind integration charge of $3.06 per
MWh to be applied to Rocky Mountain Power's published avoided cost rates without further
process or procedure.
COMMISSION DECISION
Does the Commission wish to approve a wind integration charge of $3.06 per MWh to be
applied to Rocky Mountain Power's published avoided cost rates without further process or
procedure?
Udmcmos/wind intcgration dcc mcmo
Rick Sterling
DECISION MEMORANDUM FEBRUARY 24,24rc