The URL can be used to link to this page

Home My WebLink About20240828Staff Comments .pdf RECEIVED Wednesday, August 28, 2024 10:26:22 AM IDAHO PUBLIC UTILITIES COMMISSION ADAM TRIPLETT DEPUTY ATTORNEY GENERAL IDAHO PUBLIC UTILITIES COMMISSION PO BOX 83720 BOISE, IDAHO 83720-0074 (208) 334-0318 IDAHO BAR NO. 10221 Street Address for Express Mail: 11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A BOISE, ID 83714 Attorney for the Commission Staff BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF IDAHO POWER ) COMPANY'S APPLICATION FOR ) CASE NO. IPC-E-24-23 APPROVAL OF AMENDMENTS TO THE ) ENERGY SERVICES AGREEMENTS WITH ) MICRON AND BRISBIE AND REQUEST FOR ) COMMENTS OF THE UPDATED PRICING ELEMENTS BASED ON ) COMMISSION STAFF 2023 IRP ) COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission, by and through its Attorney of record, Adam Triplett, Deputy Attorney General, submits the following comments. BACKGROUND On May 30, 2024, Idaho Power Company("Company"), applied for approval of(1)the Second Amendment to its Special Contract with Brisbie, LLC (`Brisbie"); (2)the Third Amendment to its Special Contract with Micron Technology, Inc.; (3)updates to pricing elements in these special contracts and the Clean Energy Your Way("CEYW") Construction Agreement with the City of Boise that are based on the Company's 2023 Integrated Resource Plan ("IRP"); (4) associated modifications to Schedule 33—Brisbie, Schedule 26—Micron, and STAFF COMMENTS 1 AUGUST 28, 2024 Schedule 62CEYW Program("Schedule 62"); and(5) a proposed method for updating prices contained in CEYW-Construction Program contracts that rely on IRP data. The Company represents that, through its Schedule 62, large customers served under Special Contract or Schedule 19—Large Power Service can receive service via tailored renewable resources (called CEYW-Construction) that cover up to 110 percent of their energy use. The Company represents that it has Special Contracts with Brisbie, and Micron Technology, Inc. ("Micron"), that contain CEYW-Construction pricing elements, such as Excess Generation Credits and Renewable Capacity Credits. The Company represents that it has a CEYW Renewable Construction Agreement with the City of Boise ("Boise"). The Company represents that the Commission has previously approved amendments to the special contracts with Brisbie and Micron to comply with Commission directives regarding charges and pricing elements. The Company represents that, because of Commission guidance and collaborative efforts with Staff, it formed a Second Amendment to the special contract with Brisbie and a Third Amendment to the special contract with Micron to ensure the transparent and efficient review of updates to pricing elements in CEYW-Construction Agreements. These amendments describe rate components under the Brisbie and Micron Special Contracts and Boise's CEYW- Construction Agreement, clarify or add definitions for certain pertinent terms, and ensure that rate charges are considered in separate proceedings. The Company proposes the Commission direct that future updates to CEYW- Construction Agreements using IRP inputs for pricing be filed for approval under a single docket within 30 days of submission of the IRP. STAFF ANALYSIS Based on reviewing the Application and Attachments, Staff came to the following conclusions: 1. Staff recommends the Commission approve of the Second Amendment to Brisbie's Special Contract and the Third Amendment to Micron's Special Contract. STAFF COMMENTS 2 AUGUST 28, 2024 2. Staff recommends the pricing updates for the Supplemental Energy Price and the Mid-Columbia("Mid-C") Forecast used to determine the Excess Generation Price be based on a 50th percentile ("P50") load forecast instead of the Company's proposed 70th percentile ("P70") load forecast. 3. Staff recommends the City of Boise use the hourly Mid-C price forecast from the 2021 IRP to determine the Excess Generation Price until an hourly Mid-C forecast is approved in this case. 4. Staff recommends the Commission approve the proposed method for updating future pricing elements of the CEYW-Construction program. 5. The provided updated tariff schedules include all the necessary updates required to address the proposed changes in this case, but the Company should submit a compliance filing to update the date and order number in the proposed tariffs along with including changes that have occurred to the tariffs as a result of Commission Orders. Special Contract Amendments Staff recommends the Commission approve the Second Amendment to Brisbie's Special Contract and the Third Amendment to Micron's Special Contract because the amendments provide consistency between all the CEYW-Construction special contracts and agreements. In addition, the amendments align with the Company's proposed method for updating future pricing elements. The proposed amendments modify the definitions for Excess Generation Price and Supplemental Energy Price and adds a definition for the Mid-Columbia Forecast. The definitions for the Excess Generation Price and the Mid-Columbia Forecast are consistent with the City of Boise CEYW Agreement from Case No. IPC-E-24-18, which Staff recommended approving. Both the Mid-Columbia Forecast and Supplemental Energy definitions reference the most recently filed Integrated Resource Plan ("IRP"). This reference aligns with the proposed timing of future pricing updates, which the Company proposed to occur within 30 days after filing each IRP with the Commission. STAFF COMMENTS 3 AUGUST 28, 2024 P50 IRP Forecast for Establishing Energy-Related Rates Staff recommends the Company use the P50 load forecast for determining the Supplemental Energy Price and Excess Generation Price instead of the P70 load forecast used in the IRP. The Company is currently authorized to use the DSM Avoided Cost Averages for the Supplemental Energy Price and the Mid-C forecast for the Excess Generation Price from the IRP. However, the Company is currently using a P70 forecast to ensure the Company plans for sufficient resources to meet reliability requirements,but Staff does not believe it is appropriate for setting rates and the Company should be using a P50 load forecast, instead. To be clear, the P50 load, or 50t'percentile load, and the P70 load, or 70t'percentile load, are from the same forecast. The Company uses the P70 load in the IRP to account for weather and other factors to ensure it has enough resources in reserve to meet a 1 event in 10-year reliability target. In other words, the Company plans enough resources to a load forecast where 70 percent of the time, the realized loads are expected to be lower, while only 30 percent of the time, the loads are expected to be higher. Planning resources to these higher-than-normal loads provides an extra safety margin so that when peak loads occur, the Company has enough resources to make outage events rare. However, Staff believes that if the IRP is used for the purpose of developing rates, the load forecast should be based on loads the Company expects to serve, which are at the 50th percentile. Staff recommended the Company calculate marginal avoided costs using a P50 load forecast in future IRPs in its 2023 IRP comments (Case No. IPC-E-23-23) and maintains this position for determining the Supplemental Energy Price and the Mid-C forecast used to determine the Excess Generation Price in this case. In cost-of-service ratemaking, it is an accepted and necessary practice to develop rates using expected loads under normal conditions to ensure that rates, on average, reflect costs incurred in the utility's system. Furthermore, the use of a P70 forecast is inconsistent with IRP- based avoided cost rates as authorized in Order No. 36037 (Case No. IPC-E-23-25), and Schedules 20 and 34 marginal cost rates authorized in Order No. 36201 (Case No. IPC-E-24-15), both of which were based on the P50 load forecast. STAFF COMMENTS 4 AUGUST 28, 2024 Use of 2021 IRP for Excess Generation Price In Case No. IPC-E-24-18, the Company did not address which IRP should be used to determine the Excess Generation Price under its CEYW contract with the City of Boise. Staff recommended the Commission direct the Company to use the hourly Mid-C forecast from the 2021 IRP to determine the Excess Generation Price under that contract until an hourly Mid-C forecast is approved in this case. The Commission adopted this recommendation. See Order No. 36302 at 5. The Excess Generation Price authorized by the Commission for Micron is still based on the Mid-C price forecast from the 2021 IRP and will remain so until the Commission issues an order to update it in this case. The Company has proposed to compensate the City of Boise for excess generation based on the Mid-C price forecast from the 2023 IRP until it can be authorized by the Commission, and if the rates change as a result of this case, the Company has proposed to true up any credits. Adopting this recommendation would conflict with the Commission's directive in Order No. 36302 to use the Mid-C price forecast from the 2021 IRP to calculate excess the Excess Generation Price. Accordingly, consistent with Order No. 36302, Staff recommends the Commission order the Company to compensate the City for excess generation based on the Mid- C price forecast from the 2021 IRP until issuance of an order approving Mid-C price forecast from the 2023 IRP. Future Pricing Updates The Company's proposal for updating future pricing elements by filing a single docket within 30 days of submission of the IRP is reasonable because it provides a defined schedule for the updates to occur, and ensures the rates authorized by the Commission use information that is more recent and more accurate by reducing the time from when the information was developed during the IRP cycle to the time it is authorized by the Commission. Staff recommends the Commission approve the proposed timing for future pricing updates. Proposed Tariff Schedules Staff believes the Company's proposed tariff schedules include all the necessary updates required to address the proposed changes. Staff recommends updated tariff schedules be submitted through a compliance filing to update the date and order number from this case along STAFF COMMENTS 5 AUGUST 28, 2024 with changes that have or will occur as a result of Commission Orders in Case No(s). IPC-E-24- 01 and IPC-E-24-18. STAFF RECOMMENDATION Staff recommends the Commission: 1. Approve the Second Amendment to Brisbie's Special Contract and the Third Amendment to Micron's Special Contract; 2. Approve the Supplemental Energy Price using the Avoided Cost Averages based on a P50 forecast instead of the Company's proposed P70 forecast; 3. Approve the Mid-C forecast using the hourly Mid-C forecast based on a P50 forecast instead of the Company's proposed P70 forecast; 4. Consistent with Order No. 36302, order the Company to use the hourly Mid-C price forecast from the 2021 IRP to determine the Excess Generation Price for the City of Boise until an hourly Mid-C forecast is approved in this case; 5. Approve the proposed method for updating future pricing elements of the CEYW- Construction program; and 6. Order the Company to submit a compliance filing to update the Tariff Schedules for Schedules 26, 33, and 62. Respectfully submitted this 28th day of August 2024. Adam Triplett Deputy Attorney General Technical Staff: Michael Eldred I:\Utility\UMISC\COMMENTS\IPC-E-24-23 Comments.docx STAFF COMMENTS 6 AUGUST 28, 2024 CERTIFICATE OF SERVICE I HEREBY CERTIFY THAT I HAVE THIS -lamg�l DAY OF AUGUST 2024, SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE NO. IPC-E-24-23, BY &MAILING A COPY THEREOF, TO THE FOLLOWING: DONOVAN E WALKER ENERGY CONTRACTS MEGAN GOICOECHEA ALLEN CONNIE ASCHENBRENNER IDAHO POWER COMPANY GRAND ANDRSON PO BOX 70 IDAHO POWER COMPANY BOISE ID 83707-0070 PO BOX 70 E-MAIL: dwalkergidahopower.com BOISE ID 83707-0070 mgoicoecheaallengidahopower.com E-MAIL: energ_ycontractskidahopower.com docketsgidahopower.com caschenbrennerkidahopower.com ganderson(kidahopower.com PATRICIA JORDAN, SIECRETARY CERTIFICATE OF SERVICE