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HomeMy WebLinkAbout20150319Answer to Clearwater and Simplot.pdf3tffi*. I /1 nl,I) rriDONOVAN E. WALKER Lead Counsel dwalker@idahopower.com March 19,2015 VIA HAND DELIVERY Jean D. Jewell, Secretary Idaho Public Utilities Commission 472 West Washington Street Boise, ldaho 83702 Re: Case Nos. IPC-E-15-01 , AVU-E-15-01 , and PAC-E-15-03 Modify Terms and Conditions of PURPA Purchase Agreements - Idaho Power Company's Answer to Clearwater Paper Corporation and J. R. Simplot Company's Joint Petition for Clarification and Cross-petition for Clarification of Order No.33222 Dear Ms. Jewell: Enclosed for filing in the above matter please find an original and seven (7) copies of ldaho Power Company's Answer to Clearwater Paper Corporation and J. R. Simplot Company's Joint Petition for Clarification and Cross-petition for Clarification of Order No.33222. An IDACORP Company t8 DEW:csb Enclosures 6van E. Walker 1221 W. ldaho St. (83702) PO. Box 70 Boise, lD 83707 DONOVAN E. WALKER (lSB No. 5921) ldaho Power Company 1221West ldaho Street (83702) P.O. Box 70 Boise, ldaho 83707 Telephone: (208) 388-5317 Facsimile: (208) 388-6936 dwalker@id ahopower.co m Attorney for ldaho Power Company IN THE MATTER OF IDAHO POWER COMPANY'S PETITION TO MODIFY TERMS AND CONDITIONS OF PURPA PURCHASE AGREEMENTS IN THE MATTER OF AVISTA CORPORATION'S PETITION TO MODIFY TERMS AND CONDITIONS OF PURPA PURCHASE AGREEMENTS IN THE MATTER OF ROCKY MOUNTAIN POWER COMPANY'S PETITION TO MODIFY TERMS AND CONDITIONS OF PURPA PURCHASE AGREEMENTS '-_ri r. , r r\ , CASE NO. IPC-E-15-01 CASE NO. AVU-E-15-01 CASE NO. PAC-E-15-03 IDAHO POWER COMPANY'S ANSWER TO CLEARWATER PAPER CORPORATION AND J. R. SIMPLOT COMPANY'S JOINT PETITION FOR CLARIFICATION AND CROSS. PETITION FOR CLARIFICATION OF oRDER NO. 33222 ,..,:-i:: if lS f-"iAR l? Fil tr: lB il..r,,i i --iJTil-l'ii;5 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION ldaho Power Company ("ldaho Powe/'), in accordance with RP 325 and the ldaho Public Utilities Commission's ("Commission") Order No. 33253, hereby responds IDAHO POWER COMPANY'S ANSWER TO CLEARWATER PAPER CORPORATION AND J. R. SIMPLOT COMPANY'S JOINT PETITION FOR CLARIFICATION AND CROSS-PETITION FOR CLARIFICATION OF ORDER NO,33222 - 1 to the Petition for Clarification and Cross-petition for Clarification of Order No. 33222 filed by Clearwater Paper Corporation ("Clearwate/') and J. R. Simplot Company ("Simplot") (hereinafter co!lectively referred to as "Petitioners"). Petitioners seek to have the Commission's interim Order No.33222's reduction in maximum contract term limited to wind and solar qualifying facilities ("QF'). Petitioners' arguments falter for several reasons and their requested clarification should be denied. First, Petitioners attempt to mischaracterize ldaho Powe/s Petition as only discussing and addressing problems associated with wind and solar QFs, and further imply that other resources somehow do not contribute to any of the problems identified in the Petition. This is far from the truth. The current harm to ldaho Power customers as a result of the required contracts with Public Utility Regulatory Policies Act of 1978 ("PURPA") QF projects, as well as the risk and additiona! long-term harm to customers from the same, is contributed to by al! PURPA QF projects no matter what resource type they utilize and no matter what size they happen to be. This is a case about contract term, not about integration of intermittent resources. Resource type makes no difference. What does make a difference is the magnitude of impact from the size of the project and the potential for billions of dollars of unneeded additional resources that ldaho Power customers may be obligated to pay for over the next 20 years. Frankly, the large number of small QF projects, predominately small hydro projects, while contributing to the identified problems in the same manner as large projects, has a minimal impact because their size and potential dollar impact to customers is small. However, even one large project over the published rate eligibility cap has a large IDAHO POWER COMPANY'S ANSWER TO CLEARWATER PAPER CORPORATION AND J. R. SIMPLOT COMPANY'S JOINT PETITION FOR CLARIFICATION AND CROSS-PETITION FOR CLARIFICATION OF ORDER NO,33222-2 impact and an even larger potential impact over the course of 20 years upon ldaho Power customers. The proportionately different impact from intermittent wind and solar QFs, as well as their unique ability to disaggregate themselves into smaller size increments to game the system of published rates, has been recognized in the existing smaller published rate eligibility cap of 100 kilowatts for wind and solar QFs. The published rate eligibility cap is an appropriate distinction to make with regard to contract term as the published rate eligibility cap is an existing point of division where the Commission has previously determined that larger projects should be subject to a more accurate methodology for estimating avoided costs, recognizing the larger impact that large projects can have upon the utility and its customers. Secondly, Petitioners make an outlandish claim that "None of ldaho Power's arguments apply to base-load facilities utilizing waste heat, biomass, or industrial cogeneration such as Clearwater's base-load capacity non-intermittent QF project or Simplot's existing base-load industrial cogeneration facility." Petitioners' Petition, p. 3. This could not be further from the truth. The referenced cogeneration QFs provide a very large amount of energy deliveries on a predominately flat level, whether that energy is needed by the utility or not. lf anything, the harmful impacts identified in ldaho Power's Petition are amplified for a large cogeneration QF because it will deliver unneeded energy to the utility on a more consistent and regular basis than an intermittent wind or solar QF would be expected to deliver. A cogeneration QF that exceeds the published rate eligibility cap would potentially provide enormous amounts of around-the-clock energy, not just during daylight hours like a large solar QF. A IDAHO POWER COMPANYS ANSWER TO CLEARWATER PAPER CORPORATION AND J. R. SIMPLOT COMPANY'S JOINT PETITION FOR CLARIFICATION AND CROSS-PETITION FOR CLARIFICATION OF ORDER NO. 33222 - 3 cogeneration QF's ability to provide a very large amount of energy during light load hours when the utility needs no additional resources is potentially more harmful and impactful to customers-especially when escalated over the course of a 20-year lock-in of the rate-than even a wind or solar QF of equivalent size. ldaho Power has had three recent pricing inquiries from large non-wind or solar QF projects: one from Clearwater, one from Simplot, and one from a 38 megawatts ("MW") hydro facility. Clearwater was provided with indicative pricing from the incrementa! cost, Integrated Resource Plan methodology and informed ldaho Power that it did not wish to pursue a contract with ldaho Power. Clearwater has contracted this facility with Avista in the past. Simplot submitted an incomplete request for indicative pricing for a new 25 MW cogeneration QF facility under ldaho Poweds Schedule 73. Simplot has not submitted complete information to enable indicative pricing to be completed. Petitioners refer to Simplot's QF cogeneration facility at its Pocatello plant. The Commission, just this month, approved the most recent contract for this facility-which has a term of one year. This facility has always entered into short-term contracts with ldaho Power. The previous contract was for a term of two- years, effective February 2013; the contract before that was for a term of seven years, effective February 2006; before that, the contract was for a term of one year, effective March 2004; and prior to that, a contract for five years, effective January 1991 ; and from 1986 to 1991 the facility was under contract for non-firm, as-delivered prices under Schedule 86. Even though the nameplate capacity of this project is 15.9 MW, the facility has always done a published rate contract, which requires its operation to be limited to 10 aMW monthly. This project, if it continues to do published-rate contracts, IDAHO POWER COMPANY'S ANSWER TO CLEARWATER PAPER CORPORATION AND J. R. SIMPLOT COMPANY'S JOINT PETITION FOR CLARIFICATION AND CROSS-PETITION FOR CLARIFICATION OF ORDER NO.33222 - 4 would not be affected by the Commission's current five-year contract term limitation in any event. Lastly, Petitioners' arguments are procedurally inappropriate for a clarification of the Commission's interim order. ln fact, the additional briefing and additional rebuttal filing scheduled for Petitioners' claims is arguably inappropriate as well. Petitioners' attempt to make new substantive arguments, which may be relevant to their substantive positions in the case as a whole but have little to do with a clarification of the Commission's initial interlocutory order. The only relevant question should be: What did the Commission intend to do/say in its Order No. 33222 wherein it limited the maximum contract for al! new PURPA QF contracts to five years. Yesterday, on March 18,2015, the Commission clarified that is prior limitation of maximum contract term to five years, which applied to all PURPA QF projects, only applies to new PURPA contracts that exceed the published rate eligibility cap. Order No. 33253, pp. 6-7. As stated above, this is an existing point of division where the Commission has previously recognized that larger projects should have a more accurate rate determination because of their potentially larger impact upon customers. This is also consistent with ldaho Powe/s Petition which limited its requested relief to only those projects that exceed the published rate eligibility cap. CONCLUSION ldaho Power respectfully requests that Petitioners' request for further clarification be denied. As demonstrated above, Petitioners' arguments that ldaho Powe/s Petition only applies to wind and solar, and that non-wind and solar projects do not contribute to the identified customer harm and risk, are without merit. The Commission has clarified IDAHO POWER COMPANY'S ANSWER TO CLEARWATER PAPER CORPORATION AND J. R. SIMPLOT COMPANY'S JOINT PETITION FOR CLARIFICATION AND CROSS-PETITION FOR CLARIFICATION OF ORDER NO. 33222 - 5 its initial interim order by restricting the five-year contract term to large projects that exceed the published rate eligibility cap. The further restriction to only wind and solar QFs requested by Petitioners would be harmful to customers. ldaho Power requests that Petitioners' request be denied. Respectfully submitted this 19h day of March 2015. IDAHO POWER COMPANY'S ANSWER TO CLEARWATER PAPER CORPORATION AND J. R. SIMPLOT COMPANY'S JOINT PETIT]ON FOR CLARIFICATION AND CROSS-PETITION FOR CLARIFICATION OF ORDER NO. 33222 - 6 Attomey for ldaho Power Company CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 19th day of March 2015 I served a true and correct copy of IDAHO POWER COMPANY'S ANSWER TO CLEARWATER PAPER CORPORATION AND J. R. SIMPLOT COMPANY'S JOINT PETITION FOR CLARIFICATION AND CROSS-PETITION FOR CLARIFICATION OF ORDER NO. 33222 upon the following named parties by the method indicated below, and addressed to the following: Commission Staff Donald L. Howell, ll Daphne Huang Deputy Attorneys General ldaho Public Utilities Commission 47 2 W est Washington (83702) P.O. Box 83720 Boise, ldaho 83720-007 4 J. R. Simplot Company and Cleanrater Paper Gorporation Peter J. Richardson Gregory M. Adams RICHARDSON ADAMS, PLLC 515 North 27th Street (83702) P.O. Box 7218 Boise, ldaho 83707 Dr. Don Reading 6070 Hill Road Boise, ldaho 83703 Cleanrater Paper Corporation ELECTRONIC MAIL ONLY Carol Haugen Clearwater Paper Corporation lntermountain Energy Partners, LLC; AgPower DCD, LLG; and AgPower Jerome, LLC Dean J. Miller McDEVITT & MILLER, LLP 420 West Bannock Street (83702) P.O. Box 2564 Boise, ldaho 83701 X Hand Delivered U.S. Mail ,Overnight Mail FAXX Email don.howell@puc.idaho.qov daphne. huano@puc. idaho.qov Hand DeliveredX U.S. Mail _Overnight Mail_FAXX Email peter@richardsonadams.com q reo@ richardsonadams. com Hand DeliveredX U.S. Mail _Overnight Mail_FAXX Email dreadinq@mindspring.com Hand Delivered U.S. Mail Overnight Mail FAXX Emai! carol.hauqen@clearwaterpaper.com Hand Delivered U.S. Mail Overnight Mai! FAXX Email ioe@mcdevitt-miller.com heather@ mcd evitt-m i I le r. co m IDAHO POWER COMPANY'S ANSWER TO CLEARWATER PAPER CORPORAT]ON AND J. R. SIMPLOT COMPANY'S JOINT PETITION FOR CLARIFICATION AND CROSS-PETITION FOR CLARIFICATION OF ORDER NO.33222 -7 Intermountain Energy Partners, LLC Leif Elgethun, PE, LEED AP lntermountain Energy Partners, LLC P.O. Box 7354 Boise, ldaho 83707 AgPower DCD, LLC, and AgPower Jerome, LLC Andrew Jackura Camco Clean Energy 9360 Station Street, Suite 375 Lone Tree, Colorado 80124 ldaho Conseruation League and Sierra Club Benjamin J. Otto ldaho Conservation League 710 North 6th Street (83702) P.O. Box 844 Boise, ldaho 83701 Sierra Club Matt Vespa Sierra Club 85 Second Street, Second Floor San Francisco, California 94105 Snake River Alliance Kelsey Jae Nunez Snake River Alliance 223 North 6th Street, Suite 317 P.O. Box 1731 Boise, ldaho 83701 ELECTRONIC MAIL ONLY Ken Miller Snake River Alliance Pacificorp d/b/a Rocky Mountain Power Daniel E. Solander Yvonne R. Hogle Rocky Mountain Power 201 South Main Street, Suite 24OO Salt Lake City, Utah 84111 Hand Delivered U.S. Mail Overnight Mail FAX Email leif@sitebasedenerov.com Hand DeliveredX U.S. Mail _Overnight Mai! _FAXX Email andrew.jackura@camcocleanenergv.com Hand Delivered U.S. Mail Overnight Mail FAXX Email botto@idahoconservation.orq _Hand DeliveredX U.S. Mail _Overnight Mail _FAXX Email matt.vespa@sierraclub.orq _Hand Delivered U.S. Mail Ovemight Mail FAXX Email knunez@snakeriveralliance.orq Hand Delivered U.S. Mail Ovemight Mai! FAXX Email kmiller@snakeriveralliance.oro Hand Delivered U.S. Mail Overnight Mail FAXX Email daniel.solander@pacificoro.com wonne. hoo le@ pacificorp. com IDAHO POWER COMPANY'S ANSWER TO CLEARWATER PAPER CORPORATION AND J. R. SIMPLOT COMPANY'S JOINT PETITION FOR CLARIFICATION AND CROSS-PETITION FOR CLARIF]CATION OF ORDER NO. 33222 - 8 Ted Weston Rocky Mountain Power 201 South Main Street, Suite 2300 Salt Lake City, Utah 84111 ELECTRONIC MAIL ONLY Data Request Response Center PacifiCorp Twin Falls Ganal Company, North Side Canal Company, and American Falls Reservoir District No. 2 C. Tom Arkoosh ARKOOSH LAW OFFICES 802 West Bannock Street, Suite 900 (83702) P.O. Box 2900 Boise, ldaho 83701 ELECTRONIC MAIL ONLY Erin Cecil ARKOOSH LAW OFFICES Avista Corporation Michael G. Andrea Avista Corporation 1411 East Mission Avenue, MSC-23 S pokane, Washington 99202 Clint Kalich Avista Corporation 1411 East Mission Avenue, MSC-7 Spokane, Washington 99202 ldaho lrrigation Pumpers Association, Inc. Eric L. Olsen RACINE, OLSON, NYE, BUDGE & BAILEY CHARTERED 201 East Center P.O. Box 1391 Pocatello, Idaho 83204-1 391 Hand Delivered U.S. Mail Overnight Mail FAX Email ted.weston@pacificorp.com Hand Delivered U.S. Mail Overnight Mail FAX Email datarequest@pacificorp.com Hand Delivered U.S. Mail Overnight Mai! FAX Email tom.arkoosh@arkoosh.com Hand Delivered U.S. Mail Overnight Mail FAX Email erin.cecil@arkoosh.com Hand Delivered U.S. Mail Ovemight Mail FAXX Email michael.andrea@avistacorp.com _Hand DeliveredX U.S. Mail _Ovemight Mail_FAXX Email clint.kalich@avistacorp.com I i nda. qervais@avistacorp.com Hand Delivered U.S. Mail Overnight Mail FAX x X Email elo@racinelaw.net IDAHO POWER COMPANY'S ANSWER TO CLEARWATER PAPER CORPORATION AND J. R. SIMPLOT COMPANY'S JOINT PETITION FOR CLARIFICAT]ON AND CROSS-PETITION FOR CLARIFICATION OF ORDER NO. 33222 - 9 Anthony Yankel 29814 Lake Road Bay Village, Ohio 44140 Renewable Energy Coalition Ronald L. Williams WILLIAMS BMDBURY, P.C. 1015 West Hays Street Boise, ldaho 83702 lrion Sanger SANGER LAW, P.C. 1117 SW 53'd Avenue Portland, Oregon 97215 The Amalgamated Sugar Gompany Scott Dale Blickenstaff The Amalgamated Sugar Company, LLC 1951 South Satum Way, Suite 100 Boise, ldaho 83702 Micron Technology, lnc. Richard E. Malmgren Micron Technology, Inc. 800 South FederalWay Boise, ldaho 83716 Frederick J. Schmidt Pamela S. Howland HOLLAND & HART, LLP 377 South Nevada Street Carson City, Nevada 89701 Hand DeliveredX U.S. Mail _Overnight Mail _FAXX Email tonv@vankel.net _Hand DeliveredX U.S. Mail _Ovemight Mail _FAXX Email ron@williamsbradbury.com _Hand DeliveredX U.S. Mail _Ovemight Mai! _FAXX Email irion@sanqer-law.com _Hand DeliveredX U.S. Mail _Overnight Mail _FAXX Email sblickenstaff@amalsuoar.com Hand Delivered U.S- Mail Overnight Mail FAXX Email remalmgren@micron.com _Hand DeliveredX U.S. Mail Ovemight Mail_FAXX Email fschmidt@hollandhart.com phowland @holland hart. com IDAHO POWER COMPANY'S ANSWER TO CLEARWATER PAPER CORPORATION AND J. R. SIMPLOT COMPANY'S JOINT PETITION FOR CLARIFICATION AND CROSS-PETITION FOR CLARIFICATION OF ORDER NO. 33222 - 1O