20240731Letter.pdf

Idaho Public Utilities Commission Brad Little,Governor
P.O. Box 83720, Boise, ID 83720-0074 Eric Anderson,President
John R.Hammond,Jr., Commissioner
Edward Lodge,Commissioner
July 31, 2024
Via E-Mail:
Mark Alder Ron Scheirer
1407 West North Temple, Suite 330 825 NE Multnomah, Suite 600
Salt Lake City, Utah 84116 Portland, Oregon 97232
Mark.alderRmpacificorp.com Ron.sclieirer(e-upacificoM.com
UPDATES TO CAPACITY DEFICIENCY USED IN DETERMINING AVOIDED COST
RATES; ORDER NO. 36246 IN CASE NO. PAC-E-24-01
Background
On January 19, 2024, Rocky Mountain Power("Company") applied to the Commission
for approval of its first capacity deficiency period in the summer of 2024 used for its avoided
cost calculations.
On April 29, 2024, Staff submitted comments which included five recommendations.
On May 13, 2024, the Company submitted a compliance filing through Reply Comments,
reflecting Staff s recommendations except for Staff s recommendation regarding early coal
retirements. The compliance filing shows a first capacity deficiency period in the summer of
2025.
On July 2, 2024, the Commission issued Order No. 36246, requiring the Company to
submit an updated compliance filing that only includes early retirements evaluated and approved
by the Commission.
Updated Compliance Filing
On July 23, 2024, the Company filed an updated compliance filing that has made the
following changes:
P.O. Box 83720, Boise, Idaho 83720-0074 Telephone:[phone], Fax: [phone]
11331 W.Chinden Blvd., Bldg.8,Suite 201-A, Boise, Idaho 83714

Page 2 of 3
• If the 2018 depreciation study(Case No. PAC-E-18-08)had an earlier retirement date
than the Company's 2023 Integrated Resource Plan("IRP"), the later retirement date was
used. By this principle, the Company moved the retirement date of Hayden 1 from 2029
to 2031 and moved the retirement date of Hayden 2 from 2028 to 2031.
• The Company changed the retirement dates for Huntington 1 and Huntington 2 from
2043 to 2037 based on the depreciation study.
In prior capacity deficiency cases, the Commission decided not to include early
retirements in a Load and Resource Balance ("L&R") for determining the first capacity
deficiency period for avoided cost rates, unless and until it evaluates and approves an early
retirement date. Order Nos. 34918 and 34981. Further, the Commission maintained this position
in Order No. 36246 in this case. Staff believes the proper method to obtain Commission
approval should be through a separate filing that specifically addresses early retirement(s).
Staff does not believe retirement dates from an acknowledged IRP are authorized
retirement dates, because the Commission only acknowledges the planning process, not the
conclusions or results reached through the process. Order Nos. 35977, 36233, and 36072. For
the Company's 2023 IRP specifically, Order No. 35977 states that"[t]he Commission does not
approve the 2023 IRP, or any resource acquisitions referenced in it, endorse any particular
element in it, opine on the Company's prudence in selecting the 2023 IRP's preferred resource
portfolio, nor allow or approve any form of cost recovery. The appropriate place to determine
the prudency of the Company's decisions to follow or not follow the 2023 IRP, and the
validation of predicted performance under the 2023 IRP, is a general rate case or other
proceeding where the issue is noticed."
Similarly, Staff does not believe using the retirement dates in a depreciation case meets
the Commission's intent since the assumed useful life of a plant for depreciation and capital cost
recovery purposes may not reflect when a plant is planned to be taken out of service.
However, because the changed retirement dates of the aforementioned plants do not
change the first capacity deficiency period that is projected to occur in the summer of 2025 and
because the retirement dates will only have impacts on the L&R starting in 2028, Staff believes it
is reasonable to accept the deficiency data contained in the updated compliance filing for
purposes of updating the Surrogate Avoided Resource("SAR") model.
P.O. Box 83720, Boise, Idaho 83720-0074 Telephone:[phone], Fax: [phone]
11331 W.Chinden Blvd., Bldg.8,Suite 201-A, Boise, Idaho 83714

Page 3 of 3
SAR Model Updates
Staff entered seasonal capacity deficits on Tab "Input—RMP IRP", which are used by
Tab "Input—Load and Resource". As a result, the avoided cost of capacity will be paid to new
projects starting in the first deficit year of 2025.
Staff re-calculated avoided cost rates for new contracts to reflect the new capacity deficit
information. Attachment A shows the updated published avoided cost rates for new contracts.I
Please review these attachments and file a response with the Commission by August 6,
2024, stating whether the updates to the SAR model and the calculations were made correctly.
Please contact Yao Yin(yao.vim�aupuc.idaho.g_ov) if you have any questions.
Sincerely,
�Xv>� &,lock
Terri Carlock
Utilities Division Administrator
Enclosures
ELECTRIC\PAC-E-24-01_CapDet\PACE2401_Ltr_tcyy.docx
I Published avoided cost rates for renewal contracts are not affected by the new first capacity deficit date,because
those rates contain capacity payments from the first year of the contract term.
P.O. Box 83720, Boise, Idaho 83720-0074 Telephone:[phone], Fax:[phone]
11331 W.Chinden Blvd., Bldg.8,Suite 201-A, Boise, Idaho 83714