20240411Reply Comments.pdf

RECEIVED
Thursday,April 11,2024 11:12:07 AM
IDAHO PUBLIC
_ ROCKY MOUNTAIN 1407 W.North Te Temple,Suit UTILITIES 300MMISSION
POWER. Salt Lake City,UT 84116
A DIVISION OF PACIFICORP
April 11, 2024
VIA ELECTRONIC DELIVERY
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd
Building 8 Suite 201A
Boise, ID 83714
RE: CASE NO. PAC-E-23-24
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER FOR
AUTHORIZATION TO UPDATE THE WIND AND SOLAR INTEGRATION RATE
FOR SMALL POWER GENERATION QUALIFYING FACILITIES
Attention: Commission Secretary
Pursuant to Order No. 36107 in the above referenced matter Rocky Mountain Power hereby
respectfully submits its reply comments to the Idaho Public Utilities Commission.
Informal inquiries may be directed to Mark Alder, Idaho Regulatory Manager at(801) 220-2313.
Very truly yours,
a�'-D
Joe Steward 9L
Senior Vice President, Regulation and Customer& Community Solutions

Joe Dallas (ISB# 10330)
PacifiCorp, Senior Attorney
825 NE Multnomah Street, Suite 2000
Portland, OR 97232
Email:joseph.dallas(a)pacificorp.com
Attorney for Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF ROCKY MOUNTAIN POWER FOR ) CASE NO. PAC-E-23-24
AUTHORIZATION TO UPDATE THE )
WIND AND SOLAR INTEGRATION RATE ) REPLY COMMENTS OF
FOR SMALL POWER GENERATION ) ROCKY MOUNTAIN POWER
QUALIFYING FACILITIES )
Pursuant to Rule 202.01(d) of the Rules of Procedure of the Idaho Public Utilities
Commission ("Commission") and the Commission's March 7, 2024, Notice of Modified
Procedure,Rocky Mountain Power a division of PacifiCorp(the"Company")hereby submits reply
comments in the above-referenced case.
I. BACKGROUND
1. On November 29, 2023, the Company applied for Commission authorization to
modify the wind and solar integration rates applicable to new power purchase agreements("PPA").
Specifically,purchases by Rocky Mountain Power of electric power from wind-powered qualified
facilities,("QFs"),would drop from the current$1.25 per megawatt-hour("MWh")in 2024 dollars
to a comparable real-levelized charge of$1.18/MWh, while the solar integration rate would rise
from$0.96/1\4Wh in 2024 dollars to a comparable real-levelized charge of$1.40/MWh, applicable
to purchases by Rocky Mountain Power of electric power from solar-powered QFs.
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2. On January 2, 2024, Commission Order No. 36051 provided public notice of the
Company's application and also a notice of the intervention deadline. On March 7, 2024,
Commission Order No. 36107 provided notice of modified procedure and established the
procedural schedule allowing persons who would like to file written comments to have until March
28, 2023, and the Company having until April 11, 2023, to file reply comments.
3. On March 28, 2024, Commission Staff filed comments. No other party has
intervened or filed reply comments.
II. REPLY COMMENTS
A. Commission Staff's Comments:
4. Staff recommends approval of the integration rates in the Company's application
while making seven recommendations for the Company's next Flexible Reserve Study ("FRS").
The Company responds to each of the seven recommendations as follows:
Staff Recommendation 1: Consistently file a case to update integration charges after the
acknowledgement of each Integrated Resource Plan"IRP"to comply with Order Nos. 33937
and 34966.
The Company agrees to comply with Order Nos. 33937 and 34966 and to file a case to update
integration charges after acknowledgement of the next Company IRP.
Staff Recommendation 2: Explain why capital and fixed operation and maintenance
("O&M") cost of regulation reserves should not be included in wind and solar integration
costs supported by quantifiable evidence.
The Company agrees to explain why capital and fixed O&M cost of regulation reserves should not
be included in wind and solar costs in its next FRS.
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Staff Recommendation 3: Use the most recent data that meet reasonably sufficient duration
of operations.
The Company agrees to use the most recent data that is reasonably available in its next FRS. The
Company is planning its next FRS for the 2025 IRP. This new study will use more recent data
however,it should be noted that the data will age between the FRS and the filing of the Company's
next wind and solar integration rate application while the IRP is finalized using the results of the
FRS, the IRP is filed, comments are made on the IRP, and the commission acknowledges the IRP.
Staff Recommendation 4: Determine with quantifiable evidence whether hybrid wind or
hybrid solar should be treated differently than wind or solar alone.
The Company agrees to discuss how integration costs are impacted for hybrid resources which
include battery storage capability as part of the FRS for the 2025 IRP. The Company would note
that the impact of hybrid resources on integration needs is dependent on the contract structure, in
particular whether the Company has dispatch control over the battery resource. The IRP assumes
Company controls the storage component of a hybrid resource, choosing when to charge and
discharge and when to hold operating reserves in a manner that is economic relative to system
requirements. This provides greater value than if the battery was only used to reduce the
integration requirements for the onsite resource's output, as the battery can provide value to the
system when the onsite resource's output is stable,and variation in load or other variable resources
may cancel out the variation of the onsite resource, negating the need for the hybrid battery to be
deployed.As a result, while the hybrid wind or solar resource still has the same impact on system
integration requirements, the entire capability of the battery storage counts toward meeting the
system integration requirements, rather than meeting the integration requirements of a single
resource. In contrast, if a hybrid resource is not controlled by the Company, the integration
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requirements would drop in those hours in which the resource agrees to meet a fixed schedule of
deliveries by using the battery, but the battery storage would not provide operating reserves that
would count toward system integration requirements. The implications of these different hybrid
battery storage operating parameters will be addressed in the FRS for the 2025 IRR
Staff Recommendation 5: Quantify the effect of holding load constant in scaling portfolio
diversity benefits.
The Company expects to revisit the calculation of regulation reserve requirements and diversity
benefits for the FRS for the 2025 IRP, and does not know whether Staff Recommendation 5 will
be pertinent to the resulting methodology. The Company is considering a range of modeling
enhancements for the 2025 IRP, including impacts related to weather conditions that drive
variation in load, wind, and solar that leads to regulation reserve requirements. The Company is
open to calculating the effect of holding load constant on portfolio diversity benefits to the extent
it provides meaningful insight into the calculation of regulation reserve requirements, but would
hope such analysis does not displace more beneficial considerations. The Company would suggest
that parties review FRS results presented as part of the 2025 IRP public input process, and provide
feedback on the interpretation and characterization of the results at that time, including the
suggestion to quantify the effect on diversity benefits of holding load constant if still warranted,
so that targeted and beneficial analysis can be more readily identified and incorporated in the IRP
before filing.
Staff Recommendation 6: Create at least 25 years of modeled results so that non-levelized
rates are all generated under the same method.
The Company currently intends to continue using a twenty-year study horizon in the IRR
Developing a resource portfolio for a longer period significantly expands the optimization
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problem, which is already time-consuming and constrained by computing power. As a result,
adding years to the study horizon would likely result in reduced granularity for each year within
the horizon. Furthermore,the validity and availability of data declines further into the future, such
that modeled results may not be significantly more accurate than the extrapolation reflected in the
current filing. That said, to the extent that additional years are modeled as part of the IRP, the
Company agrees to use all available years of modeling results to inform the integration cost.
Staff Recommendation 7: Determine with supporting quantifiable evidence whether
integration costs should include inter-hour integration costs included in prior studies.
The Company would note that its expected participation in the CAISO's Enhanced Day-ahead
Market (EDAM) is expected to reduce inter-hour integration costs. Inter-hour integration costs
primarily capture the cost of sub-optimal thermal unit commitment, as there is limited ability to
change unit commitment from what is scheduled on a day-ahead basis. Because the EDAM will
optimize unit commitment for a market footprint that is significantly larger than the PacifiCorp
system, day-ahead errors are likely to be smaller as a percentage of the footprint as a whole and
result in significant cost savings for EDAM participants.' However, given the current stage of
EDAM development, it is difficult to quantify exactly how inter-hour integration costs will be
impacted,particularly the levels specifically attributable to wind and solar on PacifiCorp's system.
Furthermore, while overall estimates of EDAM cost savings have been developed, they will not
have the same portfolio of resources and cost assumptions as PacifiCorp's IRP. While PacifiCorp
intends to examine the system impacts of inter-hour integration costs, it is not certain that it will
be able to develop an appropriate methodology to quantify the results for wind and solar in the
FRS for the 2025 IRP.
' hiips://www.caiso.com/Documents/EDAM Forum Brattle_Slides_2023-08-30.pdf
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III. REQUEST FOR RELIEF
5. Based on the foregoing, the Company respectfully requests that the Commission
approve the integration rates as filed in its application. The Company agrees to staff
recommendations 1 through 4. Because of the complexity of the methodologies and the evolving
nature of the Company's resource mix and market participation,the Company cannot determine at
this time whether the FRS for the 2025 IRP will be able to quantify the impacts staff
recommendations 5 and 7, but it is willing to address these topics conceptually. At this time the
Company does not intend to expand the scope of the 2025 IRP to include the 25-year portfolio
development analysis necessary to comply with staff recommendation 6, but if such analysis is
performed for some other reason,the Company will include all available years of modeling results
in the integration cost calculation.
DATED this I Ith day of April 2024.
Respectfully submitted,
ROCKY MOUNTAIN POWER
� ,c f
Joe Dallas (ISB# 10330)
PacifiCorp, Senior Attorney
825 NE Multnomah Street, Suite 2000
Portland, OR 97232
Email: joseph.dallas(dpacificorp.com
Attorney for Rocky Mountain Power
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