20241125IPC to Staff 1-5 (Redacted).pdf

IQAFIOPOWER.
DONOVAN WALKER
Lead Counsel RECEIVED
dwalker(abidahopowerxom Monday, November 25, 2024
IDAHO PUBLIC
UTILITIES COMMISSION
November 25, 2024
VIA ELECTRONIC MAIL
Commission Secretary
Idaho Public Utilities Commission
11331 West Chinden Blvd., Building 8
Suite 201-A
Boise, Idaho 83714
Re: Case No. IPC-E-24-40
Idaho Power Company's Annual Compliance Filing to Update the Load and
Gas Forecast in the Incremental Cost Integrated Resource Plan Avoided
Cost Model
Dear Commission Secretary:
Attached for electronic filing is Idaho Power Company's Response to the
Confidential First Production Request of the Commission Staff in the above-entitled
matter. A redacted and confidential version will be provided. If you have any questions
about the attached documents, please do not hesitate to contact me.
Attachment Nos. 1 and 2 are also confidential. Please handle the confidential
information in accordance with the Protective Agreement to be executed in this matter.
Very truly yours,
� C11�-
Donovan Walker
DW:cd
Enclosures

MEGAN GOICOECHEA ALLEN (ISB No. 7623)
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
mgoicoecheaallen(a-),idahopower.com
dwalker(a-)_idahopower.com
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IDAHO POWER COMPANY'S ANNUAL )
COMPLIANCE FILING TO UPDATE THE ) CASE NO. IPC-E-24-40
LOAD AND GAS FORECASTS IN THE )
INCREMENTAL COST INTEGRATED ) IDAHO POWER COMPANY'S
RESOURCE PLAN AVOIDED COST ) RESPONSE TO THE CONFIDENTIAL
MODEL. ) FIRST PRODUCTION REQUEST OF
THE COMMISSION STAFF
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 November 4, 2024, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE CONFIDENTIAL FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 1

STAFF REQUEST FOR PRODUCTION NO. 1: On Page 3 of the Application, the
Company states the major reason for the increase of September 2024 load forecast is
the re-estimation of all customer usage and growth as well as updates of service
agreements and special contracts.
Additionally, please provide each
customer class usage and growth in the two forecasts and support the answer with
evidence.
Figure No. 1 : Comparison of Sept 2023 load forecast and Sept 2024 load forecast
RESPONSE TO STAFF'S REQUEST FOR PRODUCTION NO. 1:
Please see Confidential Response to Staff Request No. 1 - Attachment 1 for a
reconciliation by major customer class of the September 2023 and September 2024
forecasts. The majority of the increase in 2027 is driven by updated expansion plans of
a specific special contract customer. That update includes nearly an additional 10OMW
of plant capacity expansion at steady state over what was considered in the September
2023 forecast. In addition, the variance is attributable to other commercial and industrial
activities reflecting the heightened level of commercial and industrial growth within the
IDAHO POWER COMPANY'S RESPONSE TO THE CONFIDENTIAL FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 2

service area. This is likely do to the demographics (population) and economics of the
service area supporting expansion plans and new business development. All other
classes, such as residential and irrigation, had relatively minor changes.
The response to this Request is sponsored by Jordan Prassinos, Load Forecast
Manager and Principal Economist, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE CONFIDENTIAL FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 3

STAFF REQUEST FOR PRODUCTION NO. 2: Page 3 of Confidential Attachment
1 of the Application includes Figure No. 2 below and states that:
Figure No. 2: Comparison of 2023 Gas Forecast and 2024 Gas Forecast
RESPONSE TO STAFF'S REQUEST FOR PRODUCTION NO. 2:
The difference between the two forecasts is an increased expectation for higher
Liquified Natural Gas ("LNG") demand amidst lower supply and production. The current
low-priced oil and gas environment has prompted producers to curtail production.
IDAHO POWER COMPANY'S RESPONSE TO THE CONFIDENTIAL FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF -4

However, US LNG exports are expected to grow rapidly, about 6-8.5 BCF/day between
Q4 2024 and Q1 2026 as reflected in the 2024 forecast compared with the 2023 forecast
that factored in LNG growth of 4 BCF/day for this timeframe. By 2026, demand for LNG
outstrips supply and gas supply will not be met with a similar production trajectory.
Production levels for 2026, in the current forecast, are 1.5 BCF/day lower than the 2023
forecast. Given that producers are maintaining capital discipline and do not have an
incentive to aggressively drill now, the market will end up being caught short. Gas storage
inventories will be used to make up for the shortfall and it is forecasted that storage
inventories will be drawn to a deficit position. Once producers do start to drill, it takes 6-
9 months for this new production to hit the market. This delay keeps prices elevated but
ultimately leads to a production response that allows the market to rebalance in 2027,
bringing storage inventories out of deficit and bring prices down.
The response to this Request is sponsored by Andy Husted, Gas Trading Leader,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE CONFIDENTIAL FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 5

STAFF REQUEST FOR PRODUCTION NO. 3: Please provide the Platts' Henry
Hub forecast without the adjustment for Sumas basis and transport costs for Idaho City
Gate delivery, published on September 3, 2024.
RESPONSE TO STAFF'S REQUEST FOR PRODUCTION NO. 3:
See Confidential Response to Staff Request No. 3 — Attachment 1.
The response to this Request is sponsored by Andy Husted, Gas Trading Leader,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE CONFIDENTIAL FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 6

STAFF REQUEST FOR PRODUCTION NO. 4:
Figure No. 3: Gas Forecast Comparison between Three Utilities
RESPONSE TO STAFF'S REQUEST FOR PRODUCTION NO. 4:
Please see response to Request for Production No. 2 for an explanation of Platt's
expectation regarding fundamental changes. Idaho Power uses the S&P Global Platts
Long-Term Gas Forecast while Avista and PAC use different forecasts. The timing of
when the forecasts were pulled or complied will also lead to differences in the results.
The response to this Request is sponsored by Andy Husted, Gas Trading Leader,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE CONFIDENTIAL FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 7

STAFF REQUEST FOR PRODUCTION NO. 5: The purpose of the Peak and
Premium Peak Hours Analysis is to determine when energy storage Us should be paid
for avoided cost of capacity. Please explain why the Company used a 50th percentile of
load forecast for this purpose, instead of a 70th percentile of load forecast.
RESPONSE TO STAFFS REQUEST FOR PRODUCTION NO. 5:
Idaho Power used a 50th percentile load forecast for the peak and premium peak
hours analysis consistent with the load forecast update provided generally in this filing,
which Commission Staff previously agreed, in Case No. IPC-E-23-25, was appropriate to
determine IRP-based avoided cost rates because it reflects the expected load under
normal conditions and represents the cost of energy likely avoided. Staff further stated
that the using the 70th percentile load for purposes of this case would likely overestimate
the avoided cost of energy and customers would no longer be held neutral. Moreover,
using the 50th percentile load forecast is consistent with the methodology and data
sources used in prior analysis of peak and premium peak hours in previous compliance
filing cases, as noted by the Commission in Order No. 36037 issued in last year's case:
"We note that the Company used the same method to determine these hours as last year.
We observed in previous cases that no material problems have arisen from relying on this
method."
In any event, the purpose of considering the load forecast in the peak and premium
peak hours analysis is not to use the actual load forecast values, but rather to compare
the hours with the highest load forecast to the hours with the highest actual load, net of
solar and the hours with the highest Western Energy Imbalance Market Pricing. Thus,
the actual load values under a 50th percentile forecast versus a 70th percentile forecast
IDAHO POWER COMPANY'S RESPONSE TO THE CONFIDENTIAL FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 8

are used only to determine which are the hours with the highest load under that version
of the forecast. Those highest-load hours are the same whether a 50th percentile peak
load forecast is used, or a 70th percentile peak load forecast is used.
The tables below illustrate that the highest-load hours are the same under each
version of the load forecast. The tables should be treated as confidential because they
include confidential and proprietary Company information that has not yet been shared
publicly.
IDAHO POWER COMPANY'S RESPONSE TO THE CONFIDENTIAL FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 9

The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning, and Coordination Manager, Idaho Power Company.
Respectfully submitted this 25t" day of November 2024.
lj')4a
DONOVAN WALKER
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE CONFIDENTIAL FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 10

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 25th day of November 2024, 1 served a true and
correct copy of the within and foregoing IDAHO POWER COMPANY'S RESPONSE TO
THE CONFIDENTIAL FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
TO IDAHO POWER COMPANY upon the following named parties by the method
indicated below, and addressed to the following:
Adam Triplett Hand Delivered
Deputy Attorneys General U.S. Mail
Idaho Public Utilities Commission Overnight Mail
P.O. Box 83720 FAX
Boise, ID 83720-0074 X Email - adam.triplett(a-).puc.idaho.gov
okba--
Christy Davenport, Legal Assistant
IDAHO POWER COMPANY'S RESPONSE TO THE CONFIDENTIAL FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 11