20030410Renewable Northwest Project Comments.pdf

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RECEIVED mFiLED
BEFORE THE IDAHO PUBLIC UTILITIES COMMIS~PR -9 AH9= 5~
IN THE MA TIER OF THE FILING
ACIFICORP DBA UTAH POWER & LIGHT
COMPANY OF ITS 2003 ELECTRIC
INTEGRATED RESOURCE PLAN (IRP).
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CASE NO. ilA~JJ!j~~~OHHISSION
COMMENTS OF
THE RENEW ABLE
NORTHWEST PROJECT
The Renewable Northwest Project (RNP) appreciates the opportunity to provide
comments to the Idaho Public Utilities Commission (Commission) on PacifiCorp s 2003
Integrated Resource Plan (IRP). RNP respectfully requests the Commission to
acknowledge the Company s 2003 IRP.
Established in 1994, RNP is a regional non-profit organization promoting solar, wind and
geothermal resources in Oregon, Washington, Idaho and Montana. Our members include
consumer and environmental organizations, as well as companies who develop, market,
and manufacture renewable resources. RNP has been an active participant in
PacifiCorp s public input process for its 2003 IRP.
GENERAL COMMENTS
RNP believes PacifiCorp s IRP is a sophisticated approach to resource planning which
provides a meaningful model for other regional utilities. We applaud the Company
underlying assumptions of future gas price uncertainty and the risk of future regulation of
carbon emissions. The IRP results demonstrate that renewables are a least cost resource
for the company because their analysis rightly quantifies the benefits of renewables:
reduced fuel price volatility, achieving fuel diversity, reduced risk of future emissions
taxes, and meeting potential federal or state Renewable Portfolio Standards (RPS).
Renewable resources provide risk mitigation against volatile natural gas prices and future
environmental regulation because they do not have any fuel costs and have few to no
harmful environmental emissions. For PacifiCorp, a company heavily reliant on fossil
fuel plants, these benefits can not be overstated. Further, the company s existing
hydropower resources may be limited during low water or drought years or by impacts of
future hydro relicensing. The addition of new renewable resources will provide the
company some insurance in a low water year or because of reductions in hydropower due
to relicensing restrictions.
PacifiCorp has demonstrated leadership with its analysis of wind resources by working
through what many have considered difficult wind integration questions. The company
has exhibited a willingness to use accurate information based on relevant recent
experience in its analysis. The Company s work with wind resources has been a valuable
learning tool for the region.
RENEW ABLES ANALYSIS
PacifiCorp s analysis demonstrates that 1400 MW of wind power is cost-effective for the
company s system over the next ten years. The wind was included in each of the
portfolios "based solely on its economic merits." (p. 80).
The Company s justification for renew abies in the final IRP is an improvement over its
earlier draft. Initially, PacifiCorp included renewable resources in their plan at a level to
meet the proposed Federal Renewable Portfolio Standard. While the RPS is a prudent
consideration, it is not, on its own, a reason to include renewable resources in a resource
plan. PacifiCorp s final IRP is a robust quantitative analysis of all resource options
combined with consideration of important paradigm risks, such as an RPS.
The final IRP also includes some improvement of the evaluation methodology for wind
power generation. The draft IRP modeled wind as a firm flat block resource at
$50IMWh. In its final analysis, the Company instead used hourly wind data from actual
wind sites. In addition, PacifiCorp staff then calculated wind integration costs (Appendix
L) and added these costs to calculate the total cost of the wind resource.
The Company s analysis ofrenewable resources still contains some flaws, however. The
most notable of which is the lack of capacity value assigned to new wind resources.
Despite repeated party comments about this issue, the Company has refused to assign any
capacity value to wind resources included in its base case. PacifiCorp did run a stress test
with 15% capacity value for wind. The results of this run show a $103-107 million
decrease in present value of revenue requirement (PVRR). Further, the Company even
acknowledges that "if the built wind capacity did contribute to the planning margin at its
expected capacity factor of 32-36%, the amount of new capacity installed in the system
through 2013 could be reduced by approximately 475 MW." (p. 131).
RNP also has concerns with the portfolio assignment and selection process in the final
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The Renewables Portfolio was designed to test the effect of adding additional wind
to the system. While we appreciate the intent, we do not think the modeling of this
portfolio yielded accurate results. Due to the lack of capacity value assigned to the
additional 1 146 MW of wind, the portfolio also added three fossil plants to meet the
planning margin. As a result, the Renewables Portfolio was higher in cost than the other
diversified portfolios and, bizarrely, had the greatest fuel expense (p. 96-97).
AVAILABILITY OF RESOURCES
RNP understands there is skepticism about the level of wind acquisition in PacifiCorp
lO-year plan. There is concern that this level of wind development may not realistically
be available. In reality, however, wind is an abundant resource in the Pacific Northwest
and the achievable potential far exceeds the 1400 MW in PacifiCorp s IRP.
There are currently 580 MW of wind resources operating and serving in the Northwest.
219 MW have been approved for construction in Oregon and Washington. There are an
additional 944 MW in the permitting process in Oregon, Washington and Idaho. Finally,
there are an additional 4 150 MW of wind projects requesting transmission on BPA'
system.
The Tellus Institute issued a report Clean Electricity Options for the Pacific Northwest
October 2002.1 This report is an assessment of energy efficiency and renewable energy
potentials in the Northwest through the year 2020. The study identifies 1 938 aMW of
achievable wind power potential in Washington, 1,482 aMW in Oregon and 303 aMW in
Idaho - roughly 11 169 MW of capacity total for the three states.
ADDITIONAL COAL PLANT
The IRP Action Plan includes plans to procure a baseload plant - either gas or coal -- on
the Eastside of their system in 2008. PacifiCorp is the single largest coal-power producer
in the Western energy market. As such, RNP believes it would be short-sighted and risky
for PacifiCorp to add another coal plant to its mix. The Company is correct to anticipate
future regulatory constraints on CO2 emissions and to model a carbon tax as part of its
IRP. However, modeling financial and economic impacts of its coal resources is not
enough. The only way to limit greenhouse gas emissions is by actually reducing those
emissions. The construction of another coal plant does just the opposite.
CONCLUSION
RNP requests the Commission acknowledge PacifiCorp s 2003 IRP.
Respectfully submitted this 7th day of April 2003.
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Ann English Gravatt
Senior Policy Associate
1 Lazarus, M., D. von Hippel, & S. Bernow. Clean Electricity Options for the Pacific Northwest. 10/02.2 To detennine achievable potential, the authors excluded some land types (e.g, local, state and national
parks; lands greater than 6 000 feet in elevation, water bodes, and lands over 20 miles from a transmission
line). They considered only wind sites categorized as Class 4 and above, and restricted to 25% the wind
potential within each class that would be developed to reflect competing land uses and local concerns).
The result: no more than .7% of the land area in any state would be utilized for wind power, and typically
less than 5% of this land would be occupied by wind turbines, electrical equipment and access roads.
CERTIFICATE OF SERVICE
I CERTIFY THAT I HAVE THIS 7TH DAY OF APRIL 2003, SERVED THE
FOREGOING COMMENTS OF THE RENEWABLE NORTHWEST PROJECT, IN
CASE NO. PAC-03-, BY MAILING A COPY, TO THE FOLLOWING:
Janet Morrison
Director, Resource Planning
PacifiCorp
825 NE Multnomah, Suite 800
Portland, OR 97232
1~./Ann English Gravatt
Senior Policy Associate