20240426PAC to Staff 6-8.pdf

RECEIVED
Friday, April 26, 2024 4:37PM
IDAHO PUBLIC
UTILITIES COMMISSION
_ ROCKY MOUNTAIN
POWER
A DIVISION OF PACIFICORP
1407 W North Temple, Suite 330
Salt Lake City, Utah 84116
April 26, 2024
Monica Barrios-Sanchez
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd.
Bldg. 8, Ste. 201-A
Boise, ID 83714
monica.barriossanchez(kpuc.idaho.gov
Secretga(kpuc.Idaho.gov
RE: ID PAC-E-24-05
IPUC Set 2 (6-8)
Please find enclosed Rocky Mountain Power's Responses to IPUC 2°a Set Data Requests 6-8.
If you have any questions,please feel free to call me at(801) 220-2313.
Sincerely,
/s/
Mark Alder
Manager, Regulation
Enclosures

PAC-E-24-05 /Rocky Mountain Power
April 26, 2024
IPUC Data Request 6
IPUC Data Request 6
Please provide an explanation and supporting documentation for why the
Company experienced 17%underproduction in its 2023 Wind Generation
compared to the Base MWh as referred to in"PAC-E-24-05 CONF Workpaper-
Painter—Generation Tables".
Response to IPUC Data Request 6
Please refer to the Company's response to IPUC Data Request 4 which provides
an explanation of why Base net power costs (NPC) are not a production target.
Wind is a variable energy resource mainly driven by weather that is outside of the
Company's control. Using a least cost economic dispatch model, the Company
maximizes its zero cost wind energy whenever possible. Wind megawatt-hour
(MWh) forecasts are normalized and will simply be either above forecast or
below forecast based upon actual wind conditions and system operating
conditions.
Recordholder: Jack Painter
Sponsor: To Be Determined

PAC-E-24-05 /Rocky Mountain Power
April 26, 2024
IPUC Data Request 7
IPUC Data Request 7
According to the "PAC-E-24-05 CONF Workpaper- Painter- Generation
Tables",the Company experienced a 221% increase in their 2023 Purchased
Power Expenses with short-term/balancing transactions from market purchases.
Please answer the following:
(a) Please explain why this expense was so much higher than the amounts
assumed in base rates.
(b) Please provide the amount of actual cost that could have been mitigated by
securing hedged purchases from long-term firm resources.
(c) Please explain and provide the information that was available within the lead
time of the Company's hedge windows justifying the decision not to secure
additional firm resources. In the explanation,please include,but not limited
to, assumptions the Company made regarding total Company load, existing
coal supply constraints, renewable resource availability, and hydro water
availability.
(d) Please explain how the Company plans to ensure that adequate long-term firm
resources are available to optimize similar situations in the future.
Response to IPUC Data Request 7
(a) Please refer to the direct testimony of Company witness, Jack Painter, page
14, line 21 through page 15 line 16.
(b) The Company objects to this data request to the extent it requests speculation.
Without waiving the foregoing objection, the Company responds as follows:
The underlying assumption of this question implies that the Company would
have knowledge of the yet-to-happen increased market prices,yet-to-happen
coal supply challenges, and other yet-to-happen related events that led to the
increase in purchased power expense, far enough ahead of time to procure
long-term firm (LTF) resources to mitigate the yet-to-happen issues.
However,procurement of LTF resources occurs through the resource planning
process and the events of calendar year 2023 were not known far enough
ahead of time. For this reason, the amount of costs is $0.
As further provided in the Company's response to subpart (c)below, the
Company operates in accordance with its Energy Risk Management Policy
which provides target hedge percentage and does not permit the Company to
engage in speculative practices. The Company has presented its Energy Risk
Management Policy to the Idaho Public Utilities Commission(IPUC), and the

PAC-E-24-05 /Rocky Mountain Power
April 26, 2024
IPUC Data Request 7
Company also provides both IPUC Staff and the IPUC semi-annual hedging
reports that demonstrates its hedge positions and compliance with its Energy
Risk Management Policy. The IPUC has indicated that a Company entering
into hedge transactions in contravention of its own risk management policy is
unreasonable. See In the Matter of the Application ofAvista Corp, AVU-E-
041 Order No. 29602,p.45 (Oct. 8, 2004) ("The Company was operating
outside its own risk management policy. When it chose to act without
regulatory approval of an affiliate methodology, it was risking its own money,
not its ratepayers.").
(c) The Company objects to this data request to the extent it requests information
that is unduly burdensome to provide. The Company further assumes
"additional firm resources"refers to short-term firm (STF) resources when
considering that the request in subpart(b) inquired about LTF resources. STF
resources, available within the lead time of the Company's hedge windows,
are primarily hedges. Therefore, the Company assumes this question to be
asking for provision of information that was available within the lead time of
the Company's hedge windows justifying the decision not to secure additional
hedges. Based on the foregoing assumptions, and without waiving the
foregoing objection the Company responds as follows:
Hedges are secured in compliance with the Company's Energy Risk
Management Policy which provides target hedge percentages. The acquisition
of hedges is driven by a physical dispatch model which refreshes each day. As
a result, applicable assumptions regarding total Company load, existing coal
supply constraints, renewable resource availability, and hydro water
availability potentially cover over 500 modeling runs and associated forecasts.
Compilation of this data, if still available, would be unduly burdensome.
(d) PacifiCorp's Integrated Resource Planning (IRP)uses a conservative planning
assumption for market purchase limits that is significantly below historical
purchase extremes. This is because assuming high purchase volume
availability represents a large open position and significant risk. The IRP also
incorporates considerations of volatility and historically challenging water and
weather conditions in key assumptions such as load and price. These modeling
considerations ensure that the IRP includes resources sufficient to maintain
long-term reliability under a wide range of conditions.
Recordholder: Jack Painter/Randy Baker/Ramon Mitchell
Sponsor: To Be Determined

PAC-E-24-05 /Rocky Mountain Power
April 26, 2024
IPUC Data Request 8
IPUC Data Request 8
Please explain how the Company is planning to enhance its power cost modeling
for its upcoming general rate case as referred to in Painter, Direct at 14.
Response to IPUC Data Request 8
The Company is still in the process of finalizing the details on the enhancements
to net power costs (NPC) modeling to achieve a more accurate level of wholesale
sales volumes. The Company expects to have the details finalized and
implemented in time for the filing of the next Idaho general rate case (GRC).
Recordholder: Ramon Mitchell
Sponsor: Ramon Mitchell