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Home My WebLink About20240501IPC to Staff 1-6.pdf "4%6h-0IQAHO POWER. RECEIVED Wednesay, May 1, 2024 10:36AM IDAHO PUBLIC UTILITIES COMMISSION MEGAN GOICOECHEA ALLEN Corporate Counsel mgoicoecheaal len(aDidahopower.com May 1, 2024 Monica Barrios-Sanchez, Secretary Idaho Public Utilities Commission 11331 W. Chinden Boulevard Building 8, Suite 201-A Boise, Idaho 83714 Re: Case No. IPC-E-24-15 Idaho Power Company's Application for its Annual Update to Marginal Pricing Used in Certain Schedules Dear Ms. Barrios-Sanchez: Attached for electronic filing, please find Idaho Power Company's Response to the Frist Production Request of the Commission Staff in the above-entitled matter. If you have any questions about the attached documents, please do not hesitate to contact me. Sincerely,^, IG IAUXVNI. v r � Megan Goicoechea Allen MGA:sg Attachments 1221 W. Idaho St(83702) P.O. Box 70 Boise, ID 83707 MEGAN GOICOECHEA ALLEN (ISB No. 7623) Idaho Power Company 1221 West Idaho Street (83702) P.O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-2664 Facsimile: (208) 388-6936 mgoicoecheaallen(a)idahopower.com Attorney for Idaho Power Company BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF IDAHO POWER ) COMPANY'S APPLICATION FOR ITS ) CASE NO. IPC-E-24-15 ANNUAL UPDATE TO MARGINAL ) PRICING USED IN CERTAIN ) IDAHO POWER COMPANY'S SCHEDULES ) RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY COMES NOW, Idaho Power Company ("Idaho Power" or "Company"), and in response to the First Production Request of the Commission Staff ("Commission" or "Staff") dated April 10, 2024, herewith submits the following information: IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY- 1 REQUEST FOR PRODUCTION NO. 1: The Company proposes to apply the same marginal cost to both Schedule No. 20 customers and Lamb Weston. Please respond to the following: a. Please confirm that the incremental 15 MW used in the "base-plus-15-MW" is based on Lamb Weston's expected incremental load alone, without considering potential Schedule No. 20 loads; b. If confirmed, please explain why Schedule No. 20 customers should use Lamb Weston's marginal cost, if Schedule No. 20 customers will have their own additional loads, causing the marginal cost to change; and c. Please explain whether the Company has received any Schedule No. 20 requests so far. RESPONSE TO REQUEST FOR PRODUCTION NO. 1: a. Yes. The incremental 15 megawatts ("MW") used in the base-plus-15-MW run is based on Lamb Weston's expected incremental load alone. It does not consider potential Schedule 20 loads. b. Consistent with the discussion held with Staff in advance of the Company's filing in this matter, Idaho Power proposes to apply Lamb Weston's calculated marginal cost rate to the Schedule 20 tariff effective June 1, 2024, because there are no customers currently taking service under Schedule 20 and the method aligns with how rates were most recently updated on January 1, 2024, as a result of the Company's most recently approved general rate case (IPC-E-23-11). As discussed on page 8 of the Company's Application, Idaho Power plans to further investigate its methodology for calculating marginal cost rates for current and IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY- 2 future customers and will engage with Staff to determine the best method(s) going forward. c. While the Company has received requests from prospective customers that would qualify for Schedule 20, none of these projects have moved forward to fund interconnection upgrades to the point of commencing operations. As a result, no customers are currently taking service under Schedule 20. The response to this Request is sponsored by Jessi Brady, Senior Regulatory Analyst, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY- 3 REQUEST FOR PRODUCTION NO. 2: The Company used "expected streamflow conditions for the April 2024-March 2025 test year" in the model run. Application at 7. Please define "expected streamflow conditions" and explain how they are determined. RESPONSE TO REQUEST FOR PRODUCTION NO. 2: "Expected streamflow conditions" is Idaho Power's hydrogeneration forecast for the April 2024 — March 2025 test year. Generally speaking, the hydrogeneration forecast is estimated using the Hells Canyon Complex Planning Model, which is an object-oriented, multi-objective river and reservoir modeling decision support system. The model was run using data derived from the Idaho Power long term streamflow forecast published on February 20, 2024. This forecast projected April through July inflows into Brownlee of 4.6 million acre-feet ("MAF"). The response to this Request is sponsored by Jessi Brady, Senior Regulatory Analyst, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY-4 REQUEST FOR PRODUCTION NO. 3: The Company used "expected load for the test year." Application at 4. Please respond to the following. a. Please define "expected load for the test year"; b. Please explain how "expected load for the test year" is determined; and c. If the "expected load for the test year" is not the 50th percentile load, please explain why the 50th percentile load is not used. RESPONSE TO REQUEST FOR PRODUCTION NO. 3: a. Expected load for the test year is the hourly system 50th percentile energy and 50th percentile peak forecast for the April 2024 — March 2025 time period. b. The forecast is developed using unique models for different customer groups. The models and sources of data used are slightly different depending on the homogeneity or other characteristics of the group. The forecast for residential, irrigation, and some commercial categories assume normal weather conditions while non-weather sensitive load such as the industrial group relies primarily on the regression analysis. The forecasts for each customer group are aggregated and then shaped using historic hourly load profiles. The forecasting methodology is the same methodology used for other filings like the Power Cost Adjustment ("PCA") and Fixed Cost Adjustment ("FCA"). c. Please see the Company's response to Part A. The response to this Request is sponsored by Jessi Brady, Senior Regulatory Analyst, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY- 5 REQUEST FOR PRODUCTION NO. 4: Please explain how the annual marginal cost of energy for Lamb Weston ($0.046891/kWh) is calculated and provide the workpaper for the calculation with formula intact. RESPONSE TO REQUEST FOR PRODUCTION NO. 4: The method used to calculate the marginal cost of energy is as follows: 1. Determine base case net power supply expenses by simulating the hourly operations of the Company's power supply system in AURORA over expected streamflow conditions and expected system loads for the April 2024 — March 2025 period. 2. Run the AURORA simulation a second time with 15 MW added to each hour. 3. Calculate the difference in power supply expenses between the base run and the base-plus-15-MW run and divide by the difference in megawatt-hours ("MWh"). This is the annual average marginal cost of energy. Please see "Response to Staff Request No. 5 - Attachment 1" for the workpaper with calculations intact. The response to this Request is sponsored by Jessi Brady, Senior Regulatory Analyst, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY- 6 REQUEST FOR PRODUCTION NO. 5: In reference to Attachment No. 3 of the Application (Marginal Costs), please explain how the values in Table "Updated Marginal Cost of Energy for Schedule 20" are calculated and provide workpapers for the calculation with formula intact. In addition, please describe the relationship between the values in Table "Updated Marginal Cost of Energy for Schedule 20" and the proposed rates in Schedule No. 20. RESPONSE TO REQUEST FOR PRODUCTION NO. 5: The table "Updated Marginal Cost of Energy for Schedule 20" in Attachment No. 3 to the Application reflects the average marginal cost of energy (as described in Response to Request for Production No. 4) during the respective season and time-of-use period in dollars per MWh and cents per kilowatt-hour ("kWh"). See "Response to Staff Request No. 5 - Attachment 1" for the calculation with formula intact. Please see the Response to Request for Production No. 6 for a description of the relationship between the marginal cost of energy values in Attachment No. 3 to the Application and the proposed rates in Schedule 20. The response to this Request is sponsored by Mary Alice Taylor, Regulatory Analyst, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY- 7 REQUEST FOR PRODUCTION NO. 6: Please explain after the two model runs (with and without the incremental 15 MW) how the modeled results are used to establish rates for Large General Service for both Primary and Transmission Service, as well as rates for Large Power Service for both Primary and Transmission Service. In support of the answer, please provide workpapers that calculate the proposed rates for each category with formula intact. RESPONSE TO REQUEST FOR PRODUCTION NO. 6: Please see the file labeled "Response to Staff Request No. 6 —Attachment 1" for the workpaper to calculate the proposed rates for Schedule 20. The method for calculating the Schedule 20 rates is consistent with how rates were developed in the Company's 2023 general rate case (Case No. IPC-E-23-11). The derivation of Schedule 20 rates for Large General Service and Large Power Service takes the respective retail energy rate for Schedule 9 and Schedule 19, respectively, and subtracts the embedded energy rate (as approved in Case No. IPC-E-23-11) and adds the respective marginal cost of energy as calculated and described in Response to Request for Production No. 5. The response to this Request is sponsored by Mary Alice Taylor, Regulatory Analyst, Idaho Power Company. DATED at Boise, Idaho, this 1st day of May 2024. MEGAN G ICOECHEA ALLEN Attorney for Idaho Power Company IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY- 8 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the 1st day of May, 2024, 1 served a true and correct copy of Idaho Power Company's Response to the First Production Request of the Commission Staff upon the following named parties by the method indicated below, and addressed to the following: Commission Staff Hand Delivered Chris Burdin U.S. Mail Deputy Attorney General Overnight Mail Idaho Public Utilities Commission FAX 11331 W. Chinden Blvd., Bldg No. 8 FTP Site Suite 201-A (83714) X Email Chris.Burdin(cr puc.idaho.gov PO Box 83720 Boise, ID 83720-0074 Stacy Gust, Regulatory Administrative Assistant IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY- 9 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-24-15 IDAHO POWER COMPANY REQUEST NO. 5 ATTACHMENT NO. 1 SEE ATTACHED SPREADSHEET BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-24-15 IDAHO POWER COMPANY REQUEST NO. 6 ATTACHMENT NO. 1 SEE ATTACHED SPREADSHEET