On July 29, 2024, the Oregon Public Utility Commission (the Commission) issued Order No. 24-248 in Docket No. UM 1729 regarding PacifiCorp’s annual update to their standard avoided cost rates for qualifying facilities selling power under the Public Utility Regulatory Policies Act.
In the order, the Commission stated PacifiCorp must incorporate the most recent long-term gas forecast and electric forward market inputs available, and set the deficiency period to begin on January 1, 2027, two years later than PacifiCorp originally requested. Staff initially proposed PacifiCorp should be required to assume interconnection and network upgrade costs at the levels set forth in the National Renewable Energy Laboratory (“NREL”) 2024 Annual Technology Baseline (“ATB”) for grid connection costs, but the Commission ordered PacifiCorp to recalculate avoided cost prices for its avoided solar resource using assumed interconnection and network upgrade costs of $125 million for a proxy 200 MW Utah solar resource. The order also directed PacifiCorp to update its resource deficiency period to begin January 1, 2027, and refile its (formerly) Schedule 37 avoided costs using the most recent long-term gas forecast and electric forward market inputs, along with using NREL ATB cost and performance values for the solar renewable proxy resource.
Staff reviewed PacifiCorp’s inputs and methods and considered compliance with Commission policy. Given the lack of IRP acknowledgement, Staff also considered whether the rates reflect Staff’s understanding of PacifiCorp’s actual anticipated avoided costs – whether these lower costs reflect a reasonable procurement strategy given planning dialogue surrounding PacifiCorp’s short position to the market, uncertain future for the coal fleet, and the increasing regional conversation about resource adequacy.
The Commission agreed with stakeholders that the 2025 deficiency was not a realistic reflection of the Company’s actual resource actions, such as the cancellation of the near-term procurement actions described in the 2023 IRP. While PacifiCorp’s IRP Update states that there is a material benefit to scaling down and delaying resource acquisition until after 2030, the Commission indicated PacifiCorp’s scaled down resource acquisitions meets the definition of a major resource for the purpose of indicating the start of PacifiCorp’s deficiency period.
The Renewable Energy Coalition (REC) submitted comments with the Community Renewable Energy Association (CREA) stating that the PacifiCorp’s avoided solar resource is not associated with any specific interconnection, transmission, or network upgrade costs identifiable in PacifiCorp’s workbooks nor its 2023 IRP. Until an additional study can be conducted, Staff recommended PacifiCorp rely on the NREL 2024 ATB assumptions for Grid Connection Costs, which include: distance-based spur line cost, transmission substation upgrades, and network upgrades. However, the Commission adopted the amount of $125 million for interconnection costs, which was a compromise between Staff’s recommendation and REC/CREA’s recommendation.
Sanger Law, PC represented REC in this proceeding.
REC advocates for reasonable Public Utility Regulatory Policies Act and interconnection policies on behalf of renewable qualifying facilities that are located in Idaho, Montana, Oregon, Utah, Washington, and Wyoming.
Disclaimer
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