PacifiCorp 2007 Integrated Resource Plan (May 30, 2007)

PacifiCorp – 2007 IRPChapter 3 – The Planning Environmentproduction resulting from efficiency improvements or capacity expansion at existing dams wasadded to the list of production technologies eligible for the PTC.PacifiCorp expects that extension of the PTC should aid the procurement of new wind and otherrenewable resources with a relatively short development lead-time. Nevertheless, dependence onyear-to-year extensions represents a significant challenge for developing renewable resourceswith longer design/procure/construction periods, such as geothermal projects. Given the uncertainfuture of the PTC, PacifiCorp, along with other utilities, is attempting to acquire as mucheconomic renewables as possible prior to the expiration date.HydropowerThe bill includes a major reform of the federal licensing procedure for hydroelectric dams. Themodifications allow an applicant to propose an alternative to mandatory conditions placed onhydropower licenses by federal resource agencies (Departments of Interior, Commerce and Agriculture).If a proposed alternative met the statutory environmental and resource protection standards,the alternative would be accepted. Hydro licensing reform has been a goal of the industryfor years, but has been highly controversial with the environmental community.The bill also includes incentives for improving the efficiency of existing hydroelectric dams andfor modifying existing dams to produce electricity. (See Renewable Energy Provisions, above.)Public Utility Regulatory Policies Act ProvisionsThe bill establishes market conditions necessary to eliminate the Public Utility Regulatory PoliciesAct’s (PURPA) mandatory purchase obligation. The EPAct also includes amendments thatestablish market conditions that eliminate the requirement for utilities to buy power from independentrenewable energy and cogeneration plants where FERC determines that competitivemarket conditions exist, and revises the criteria for new qualifying facilities seeking to sell powerunder the mandatory purchase obligation. Unfortunately, competitive markets may not supportthe long-term contracts that many renewable generators need to secure financing at affordablerates.Title XII of EPAct also amends a section of PURPA by adding five new ratemaking standardsfor electric utilities. State regulatory commissioners are to determine whether the new standardsare appropriate for their states. The five standards include net metering, fuel source diversity,fossil fuel generation efficiency and interconnection service to customers with their own on-sitegenerating facilities.Metering ProvisionsSection 1252, “Smart Metering”, of the EPAct requires that all utilities provide a time-based rateto all customer classes within 18 months of the enactment. In all states, PacifiCorp has met thebasic requirements of the EPAct in regards to time-based rate schedule offerings.Furthermore, the EPAct requires state commissions to conduct an investigation as to whether atime-based rate schedule and accompanying meter equipment is appropriate to implement andinstall within 18 months after date of enactment. The following time-based rates must be considered:51