Wednesday, September 1, 2010

Idaho Power plan gets nod from PUC

Addition of renewable energies to meet 40 percent customer increase


By TREVON MILLIARD
Express Staff Writer

Idaho Power's plan for keeping up with customers' electricity needs over the next 20 years has received formal approval. And demand is expected to greatly swell as a 40 percent increase in customers is predicted, jumping from 486,000 now to 680,000 by 2029.

The company isn't proposing that coal plants be built to accommodate growth in southern Idaho, but plans to add 3,000 megawatts of generation through wind, geothermal plants and natural gas-fired plants.

The 2009 plan, finished in December, doesn't guarantee that all projects proposed over the next 20 years will go through. The Idaho Public Utilities Commission requires the plan—known as the 20-year Integrated Resource Plan—to be updated every two years.

Mark Stokes, manager of power-supply planning, was part of the group that put together the plan. He said it's split into 10-year halves because technology advancements—such as carbon sequestration and electric cars—could drastically change what's implemented during the second 10 years.

The plan also shows three options for coal-fired production during the plan's time: maintain current coal-fired production levels, partially curtail it or cut out coal altogether. Increased coal burning isn't an option.

Mike Youngblood, manager of rate design, pricing and regulatory services, said coal plants currently supply about 45 percent of Idaho Power's electricity every year. He said the company would be shying away from coal in anticipation of legislation limiting greenhouse gas emissions.

But many eco-friendly forms of energy production will be started from the get-go.

A 300-MW natural gas plant now under construction near New Plymouth will come online in 2012, as will a geothermal plant contracted by Idaho Power to supply 20 MW over 20 years. Another geothermal plant contracted by the utility to supply 20 MW over 20 years is scheduled to come online in 2016. An upgrade to the Shoshone Falls hydroelectric facility will make another 20 MW available by 2015.

However, the plan's 150 MW of wind generation to be purchased by 2012 fell through on Aug. 13 when an agreement couldn't be met after issuing a request for proposals.

"In the end, the RFP no longer provided a competitive resource," said Lisa Grow, Idaho Power's senior vice president of power supply.

She added that a cheaper way of acquiring wind power has arisen. In March, the Idaho PUC changed regulations to allow Idaho Power to buy wind-generated electricity at lower cost from other utilities.

"Even though we're not getting the RFP, wind-powered generation today exceeds that identified in the 2009 resource plan," Idaho Power spokeswoman Stephanie McCurdy said.

She said Idaho Power has 200 MW of wind energy on its system and 250 MW more under contract, exceeding the 2009 Integrated Resource Plan's 150 MW. She said Idaho Power anticipates filing additional contracts for wind-generated power and hopes to have about 800 MW of wind on its system in a few years.

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Idaho Power also recently requested state approval to enter its first agreement with another utility to buy solar-generated power.

But there is a drawback to these innovative forms of electricity production—they're much more expensive than hydroelectric power and coal, which currently supply about 75 percent of Idaho Power's electricity.

Idaho Power owns and operates 17 hydroelectric projects, two natural gas plants and one diesel-powered generator. It shares ownership of three coal-fired facilities.

While hydroelectric costs $13 per MW hour and coal $33, geothermal and natural gas would each cost $107 per MW hour. And wind would cost $80 per MW hour.

Relying more on these expensive resources means customers' rates will increase. Stokes said that would likely influence customers to reduce their electricity use.

"Use per customer would decrease despite more customers," he predicted.

And Idaho Power is already encouraging its customers to lower their electricity use through incentives.

"This is about the only industry where we encourage customers to use less of our product," Youngblood said.

Less electricity used means Idaho Power can wait longer before constructing more plants, something Youngblood said the company wants to stave off.

The 20-year plan can be seen at idahopower.com by clicking on the "About Us" tab on the left side of the screen and scrolling down to "Our Plan." Then, click on 2009 Integrated Resource Plan.

The next plan

The 2009 plan was just approved and Idaho Power is already beginning on the 2011 Integrated Resource Plan. The first meeting of the Integrated Resource Plan Advisory Committee was last Wednesday at the company's corporate headquarters. The committee consists of members of the environmental community, major industrial customers, irrigation representatives, state legislators, Public Utility Commission representatives and other interested parties. The 2011 plan will be filed next year.

Trevon Milliard: tmilliard@mtexpress.com




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