20130808Comments.pdf

Randall C. Budge,ISB No. 1949
Thornas J. Budge, ISB No. 7465
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
P.O. Box l39l;201 E. Center
Pocatello, Idaho 83204-l391
Telephone: [phone]l
Fax: [phone]
rcb@racinelau,.net
Attonreys for Intervenor Mottsattto Compatty
IN THE MA]TER OF THE PACIFICORP DBA
ROCKY MOUNTAIN POWER'S
2013 INTEGRATED RESOURCE PLAN
SMFORE THE IDAHO PUBLIC UTILITIES COMNIISSION
CASE NO. PAC.E.13.O5
COMI\{ENTS OF
MONSANTO COMPANY
INTRODUCTION
Monsanto Cornpany ("Monsarto") submits these conlnents to the Idaho Public Utilities
Cornrnission ("Comrnission') r'egarding PacifiCorp dba Rocky Mountain Power ("Company'')
2013 Integrated Resource Plan ("IRP') filing on April 30,2013 and pursuant to Order No. 32838
giving rrotice'aud directing that written couunents be filed no later than August 8, 2013.
Monsanto does not request a hearing or other proceedings on the IRP rvhich, like prior filings,
should be accepted as a compliance filing that is non-binding on the Commission with all
prudency revie$, decisiorrs reserueduntil a general rate case.
Monsanto filed comments dated August 20, 2007 and dated July 7, 2011 on the
Cornpany's prior IRP filings rvith many of the concems raised at that time remaining valid today.
Particularly, these concems include: a) the importance of properly recognizing Monsanto as a
long-standing intemrptible load and resource; b) the need for resource planning analysis flrat
focuses uport "least cost" resource prirrciples; c) the need to address the economic impacts and
COITNIENTS OF IT{ONSANTO COMPANY. t
affordability of capital expenditures; and cl) properly adclressing the critical cluestion of rvhether
thc costs exoeecls value or benefit derived to tlte ratepayers.
Irr llrese comrrrents Morrsanto rvill acldress tbur issues: (l) Irrcorrsistent and unexplained
changes to the capacity sontribution at systeur peak for existing intenrrptible resources; (2) the
Comlrany's reliance on its newl5.developecl System Otrlerational and Rsliabilitl,Bencfits Tool as
an analytical rnodel designcd to nreasure iucremental econouric benefits of specific transnrissiorr
irrojects. (4) Double counting irt tlte Energy Ralauce Account; and (4) the conrplexiti, 6; r1't"
Cornl:an1,'s II{P process rer:dering it dilficult for custonrer'.s to participate irr any rrreaninglirl r.vav,
I.
INCONSISTBNT AND UNEXPLAINED CHANGES
"I'O TIIB CAPACI'IY CONTRIBUTION AT SYSTBN{ PE*\I( FOR
I'XISTING INTI,RR UPTIRLE ITESOUITCES
Significant aud ul:explained changes in tte arnount of existing iuterruptible resolu'ces
available have beeu made itr the 2013 IIlI'}. F'urthenrore! the 2013 IRP presents inconsistsnt ancl
conflicting amounts of the inten'uptible resoul'ce. This should be con'ected.
For exarnllle, Table 5.2 of the 20ll IRP detailecl 281 N4W of intenuptible resource
available at system peak (sce page 85 o.f 2011l/?P). This u,as furtlrer described in the 201I IRP
on page 93 in Table 5.10 (". . . for a total of 28 I MW") as u,ell as on page 98:
Interruptible. There arc tluee east-side load curtailnrent contracts in this
category. These agreernents rvitlr Monsanto, MagCorp and Nucor provide 281
IvIW of load iutenuption capability at tirne of system peak. Both the capacitv
balance and energy balance count these l'esourcos at the level of full loacl
inten'uption on the executed hours. Interruptible resources directly curtail load
and thus planning reserves are not held for them. (2011 IRP, p. 98)
Consequently, all tluee refereuces to irrterruptible contracts in the 2011 IRP (pages 85, 93 and
98) consistently used 281 MW.
In contrast, the 2013 IRP is coufusing at'ld inconsistent. Table 5.2 on page 81 of the 2013
IRP shorvs the intenuptible resource category is forecast to contdbute 141 MW at system peak.
PacifiCorp has provided no explanation whatsoever of this significant clecline in irrtcrruptible
contracts from the 201I IRP.
Footnote 2 on page 81 of the 2013 IRP explains Table 5.2 colunln heading "L&R
COfitIUENTS Or'IIONSANTO COI\IPI\NY - 2
Balance Capacity at Systern Peak (MW) as: "Represents the capacity available at the time of
systern peak used for preparatiorr of the capacity load artd resource balance. For specific
def'rnitions by resoulce type see the section entitled. "l,oad and Resource Balarrce Cornporrents",
later in this chapter:." The sectiort entitled "Load artd Resource Balauce Components" is found
starting at 1:age 92 of the 2013 IRP, and the intenuptible descrilrtion is ou page 95:
Intermptible. "fhere are thee east-side load curtaihnent contracts in this
category. These agreements rvith Mor sauto, US Magnesiurrr, arrd Nucor provide
about 334_M\Y.-of lqa{ Both
the capacity balance artd energy balance count these resoul'ccs at the le'r,el of ftrll
load intcrlrrption on the executecl houts. Interlu;rtible resouroes dilectly curtail
load and thus plamrirlg l'eservcs are not held fbr theur. As rvith Class I DSN,I, this
resource is nou,categorizecl as a decrease to the peak loacl, (X)13 IRP, p.95,
entlthasis added)
This description of 324 MW is vastly different than the I4l MW shou,n on Table 5.2.
PacifiCorp rnust explain and corect this discrcpancy.
lnterruptible contracts are also listecl in Table 5.10 tbund on page 90 of the 2013 IRP
under the Class 1 DSM heading, with the follorving arnounts slrorvr: under the colurnn heading
"Energy Savings or Capacity at Generator":
2013-324 MW
2014*?98 MW
2015-2022*3r0 MW
While the 324 MW shorvn in Table 5.10 for 2013
95. thele is no discussion of the changes made
explained in the IRP
As background, PacitiCorp's March 31,2010 IRP update included 327 MW of
irrterruptible resource (Table 5.6, PacifiCorp 2008 IRP Update). The arnount of 324 MW found
on pages 90 and 95 of the 2013 IRP substantiates and is in line with the 327 MW amount found
in tlre 2008 IRP Update. It is also cousistent with a total that includes Morrsarrto's long-standing
intenuptible product as Monsanto pointed out in its previous IRP Cornments. See Case No.
PAC-E-13-05, Conunents of Monsanto Conrpany, J11l.y 7, 2011.
In sum, the 2013 IRP is perplexing as to the arnount of existing intenuptible resources
available as none of the references appear to be consistent. Furtheulore, the 2013 IRP fails to
CONITUENTS OF ITTONSANTO COTTPAI{Y - 3
at least uratcl:es rvith the description of page
for the subsequetrt years. 'fhis shoukl be
address the charrges in the amount of intenuptible resoutce. According to page 28 of Appendix
B, the Iclaho Comrnission requires IRP analyses to include, "Knou,u err potential cltauges to
existingresourccs". 'l'he ?013 flfP ltas ttot cloue so. 'l'he Cotnrtrission sltould seek clarificatiort
on the proper arnount of existing interruptible resource.
Il.
.I'HI} I}N IIITGY I'ALANCB D ETBRM IN A'I'ION DO U T!I,E COU N'I'S SAL,IIS
1'he Conrpanyhas updated the calculation of the Loacl and Resource balance in-slep rvitlr
the upgraded IRP rnodels. Interruptible contracts items have mot,ecl from iucrcasing Existing
Res<rurccs to rcducing otrligttitx (see page 9i a.t20l3Ii?P/. PacifiCorp has dortc a good iob of
shorving the "Olcl IRP Fonnat" ort Table 5.ll and the "Updatecl F'ottnat" on l'able 5.12
derronstrating that both rnethods lesult in the sanre Systern Position. Due to tlte tnovemetrt ol'
Sales, Non-Orvnecl Reserves, Class 1 DSM and Intenrrlltible contracts. PacifiCorlr has eff'ectively
reduced its 2013 existing r?sources of I I ,962 MW dorvn to 10.010 MW, or a recluctior"r of I ,952
IvlW. Likewise, PacifiCorp has reduced the 2013 obligatiorr plus reserves of 12,786 MS/ doivn
to 10,834 MW, or a reduction of 1,952. Consequentll,, the 2013 System Position, thus reinains at
(S24) MW in both the "Old IRP Forrnat" and the "Updated Forrnat". Monsarrto sees no problem
rvith this change in fomrat.
The updated Energy Balance Determination (see page l0l qf 20131RP/, horvever, is ttot
consistent with the updated Capacity Balance Delemrination. The Capacity Balauce
Determination equations are found on page 96 of the 2013 IRP. Specifically, existing Resources
do not include interuptible contracts, but instead Intenuptibles act to reduce obligation:
C ap acitlt B ala n c e D ete r m i n at i o n tr[ et I rc d o I og1,
Existitrg Resources = 'l'hernrul * H),clro * Ileneu,able * Finn Pw'chases + Qtmlifiing
Facilities - Firm Sales - Nort-Ovnecl Resenes
Obligation = Load * Class I DSM - lnten'uptibles
The Energy Balance Detennination equatiorts are shorvn on page 101 of the 2013 IRP. Itt
contrast, the intenuptibles are included in the Existing Resources, and Sales trre deducted. Sales
are also irrcluded in the Obligation equatiort. This double counts Sales as both reducing
COIITIUENTS OF I}TONSANTO COilTPANI,. C
resources and increasirrg load obligation.
E n e r gy IJ eil a n c c D e te u u i tr o t i o u M e t I n d o I o tr,1,
.lgltrstrirg llesources = 'l'hennal + I'*,clro * Clos.s I DSM * Renetruble + ?-inn Purclmses
1- Quctlifi,ing Facilities + Inlerruptible * Sales
Obligatiott = Lood'{- ,Sc/es
The double countillg of sales in the Energy Balance l)etcnnirration should be correctecl.
Further. it'the changes to the four categolies (Sales, Non-Ou,uctl Rescrves, Class I DSIVI and
Interruptibles) are to be nrade irr the Load ariel Resource Balance Componcnts as explained at
page 93 of tlre 2013 IRP, then orrc rvould expect the chauges to be rnacle to lroth the Capacity as
rvell as the Ener:gy Balance Determination. PacifiColp has not acldrcsserl rvhy it changecl only
the Capacity Balance Detcrminatiou.
.IIL
THB NEWLY-DEVELOPED SYSTEI\{ OPBRA'TIONAL AND
RELIAI]ILI'TY I}ENEFITS TOOL IS UNVERIFIED AND UNTESTtrD AND
MUST BE VERIFIED FOR COST ALLOCATION PURPOSBS.
A sigrificant over{ap exists between the IRP whicli discusses tlre selection of resources
and the Multi-State Process ("MSP"), rvhere the states attempt to work together and reach au
agreement concenring horv the costs of the integrated system should be allocated to each state.
Accordingly, resources discussed rvithin the IRP may eventually inrpact cost allocation issues
being addressed irt the MSP.
Of primary concenl to Monsanto is the IRP's reliance on its neu,ly-developed System
Operational and Reliability Benefits Tool ("SBT"). The SBT is an analytical model clesigned to
'lneasure" incremental economic benefits not othem,ise captured in the IRP's modeling of
specific transmission projects, such as segnrents of PacifiCotp's massive Energy Gateway
project. The Company's SBT model is untested and the results have not to date been verified or
replicated by third parties and stakeholders. Therefore, the various transmissiotl "trenefits"
presented in the IRP slroukl not be accepted at lace value urrtil inclependent rcvievi, and
verification has been pertbnned.
CONTIUENTS OF IITONSANTO CONTPAN}:. 5
The SBT's unverified results that are presented in tlre lRP havc poleirtial adverse
consequences for the MSP's allocation of costs to lclaho. In the IRP, the Corupany presents SBT
analS,sis fbr t'uvo portions of the overall Energy Cates,ay project, the first associated u,itlr the
Siguard to Red Butte h'ausrnission line, ancl the second associatcd rvith the Windstar to Populus
(segment D) investurent. The SBT "benefits" reported in tlre iRP fcrr Siguarcl are a net present
value of $645 rnillion ancl tbr Windstar S 1.565 billion net present value. Tlre SB1" purports to
shou,that the vast rnajority of the econor:ric lrenefits fi'onr these transnrissiorr prnjects are cl]ergy
related, being in excess of 90% firr Siguard arrd about 8096 fbr Winclstar. Whilcr uncloubtedly
sorne of tlre trenelits Iiour these transtnission lines woulcl be errergy l<lss recluctions arrd thelefbre
cnergy relatecl, since the apparent itttertt of some MSP participants is to allocate costs in par:t
based upon llerceived "bertelits," the SBT analysis could tre use<l to supllolt a substantial
allocation of fixed transmissiou costs ou the basis of energy corlsunrption" as opposed to peak
domancl. This lvould likely be tlctrittrental to Monsartto and olher PacifiCorp latepayers il lclalro.
It4onsanto has cousistently ach,ocated that costs should be allocated primarily based on
objectively-deterrnined cost callsation rather than on pelceived subjective assignments of
benefits. Unfortunately, the transrnission "benefrts" rcported in the IRP could be used to argue
in favor of cost allocation based ou such perceived benefits rather than on more objective cost
causation principles. This underscores the inrportance of inclependent verification and testing of
the analytical accuracy of SBT before the results are accepted, Only a{ler a detailed indepenclent
revierv of the rnodeling algorithms and assumptions underlying the SBT have been perfbrrned
carr the SBT results be evaluated. Monsauto urges the Cornmission iu this clocket and in future
proceedings to reservc judgrnent on the value of and weight to be given to the SBT results
presented in the IRP tiling.
Notrvitltstanding, Monsattto's col'tcenl regardirrg the Cornpauy's hcar,1, reliance on the
untested SBT, Monsanto has identified tluee aspects of the IRP that nlay prove useful to Idaho
participants as supportive of positions in the ongoing MSP discussions: (1) the use of planning
crjteria in the IRP based on achievinga lSYo reserve margin associated rvith surnmer peak loads,
(2) forecasted energy shortages and the importance to the PacifiCorp systcrn of the differences
betu,een on-peak arrd off-peak consumption of electricity, arrd (3) the role of the state Renewable
Portfolio Standards ("RPS") in the IRP process, including the nervly-developed "RBS scenaricr
CONIi\IENI'S Or IIIONSAN'I'O COMPI\NY - 6
n'raker" rvhich rvas included in the IRP to iderrtify and isolate the costs associated with the state's
specific I{PS tcquirenlellts. 'fhese appear to bc positive features of the IRP.
IV.
"I'HB PUBLIC PAITTICIPA'I'ION IN THE IIIP PROCBSS IS OVI4RLY COMPLBX ANT)
DIIIIIICUL'T TOR CITIZENS "I'O
PARI'ICIPA"I'II IN IN ANY MT|ANINGII[JI, WAY AND S[{OULD BA IIITMODAI,II)
Monsanto is rrrinclfirl ol'tlte impofiancc of the lllP and MSP ;:rocesses lrccause they each
rtray clirectly inrpact costs itrcun'ed by tlte Conrpany. allocatecl to the States. ancl paid lbr by the
ratepayers. For that l'eason. Ir4oltsattto ltas undertaken a renewed ettort to actively participate it)
these pr<lcesses in a ttteartittglitl rtay. Itecogniz.ing this involl,es a signihcant ancl ongoing
cotntnilrnent of llersonuel ancl rcsources. Mortsanto has assigrred personnel to regularly
parlicipale in the ongoing public IRP arrcl MSP processes. As a lesult of extensive and orrgoing
participation in botlt lclaho Poiver and PacifiCorl: IRP processes it is Monsanto's assessrnent tl:at
the PacifiColp process appeal's to havc been intcnlionalll, clesignecl to lre overly colnplex,
bureaucratic and laborious to discourage citizen palticipation in any mcaningful rvay. absent the
erttployment of experts, F'or example, some of the nrodeling is so complex that it is not even
understood or capable of being explained by the presenters, rvhose answer is simply to go hire (at
your expense) the expert modelers enrployecl by the Cornpany. While conference call-in
participation has been nracle available to help ntinimize time and expense! given the phone
S)/steur anclnunrber of participants it is inelJbctive and nearly inrpossitrle to participate by phone,
The PacifiCorp process is a stark contrast with that of Idalro Power, which effectively utilizes a
citizens advisory board to address planrring issues in a sirrrple, straightforrvard and furrctional
lulanner together rvith an outside fhcilitator which helps resolve contlicts and prnblenrs of
donrination by srrrall slrecial interest gnlps.
It is noteworthy that the Cornpany's IRP filing in addressing the Idaho IRP requirernents
slates as l'ollorvs:
"Twenty-year plan to nrcet load obligations at least-cost, with equal consideration
to demand side resources. The plan to address risks and unceltainties. Brrrphasis
on clarit1,, unclerstandability, resource capabilitics and plnnning flexibiliry."
(Emphasis added.) PacifiCorp - 2013 lltP, App. B - IRP Regulatory
coNmtENTS oF trtoNs.\N't o coilPANl'- 7
Compliance, Table ,8.2, p,2'l'
The Cornpany's lRP proce$s for citizen's involvement falls far short ofmeeting ldaho's
state.d IRP requiremenk and requir'm ovslraul.
The Commissisnls consideration of,lvlonsanto"s I.RP Comrnents is approciated,
Monsanfo iutends to eot*inueits particlpatiCIn in the ,Coerpauy:s,IRP and hiISP processea anrd to
w,'rk co.laboratively with Staff and other partisip.arlts.
RESPECTFULLY SUBMI'ffiED this 8tr'dayof August, 2013.
F"AGINA CIt$oN, NYE, BUDG$ &
BAIIEY, CI{AR?ERED
RANOALL C. BUPGE
COMI{$NrS OF tIOl+$]tIt|:fO COHPAI{? - I
CERTINCATE OF MAILING
I HEREBY CERTIFY that on this 8th day of August, 2013, I servecl a tlue, conect ancl
complete copy of the for:egoing docutnent, to ench of the following, via tlre rnethod so indicated:
Jean D. Jewell, Secretary (original and 7)
Idaho Public Utilities Cotruuissiott
P.O. Box 83720
Boise, ID 83720-0074
E-rnail: [e-mail]
Ted Weston
Daniel E. Solander
Mark C. Moench
Rocky Mountain Porver
201 South Main, Suite 2300
salr Lake city, utah 841I I
E-mail: ted.weston@pacifi corr:.com
E-nrail : Daniel.sqf andei'@,pacilicorp.com
E-rnai I : rrlrrk rnQenclr@&-aci fi c-orp.cenr
Scott Woodbury
Deputy Attomey General
Idaho Public Utilities Commission
P. O, Box 83720
Boise, Idaho 83720-007 4
E-mail: scott.rvoodbur),@puc.idaho. gov
Benjamin J. Otto
ldaho Conseruation League
P. O. Box 844
Boise,ltlaho 83702
E-mail: [e-mail]
Ken Miller
Clean Energy Prngram Director
Snake River Alliance
P.O. Box 173
Boise,Idaho 83701
kmill er@snakeriveralli ance.or g
Thornas H" Nelson
P.O. Box 1211
Welches, Oregon 97467
E-mail : uelsotr@.thnelson.cottt
COIIIIIENTS OF ilTONSANTO CONTPANY. 9
Harrd Delivery
E-Mail
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Nancy Esteb, Ph.D.
P.O. Box 490
Cmlsborg, Washinglon 95324
E-mail: betseesteb@qwestrp[
John Lorve, Direo"tor
REnewabl e Energy Coatitisn
12050 SW Tremont Sheet
Pofilarrd, Oregon 9:7225
E-mail : [e-mail]
Katie Iversoa
Brubaker & Associates
19540 N. Wessex Dr:.
Surprisg Arizona 85387
E-mai l: kiversonk?consultbai.com
James R. $r-nit-h
Monsanto Company
F. O. Box 816
Soda Springs, Id*o S3276
E-mail : jim.r.smif h@nonsanto,com
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COMM'SI-{rS OF NIONSANTO COMPAITY. [O