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Home My WebLink About20241204Staff Comments .pdf RECEIVED Wednesday, December 4, 2024 10.45:57 AM IDAHO PUBLIC UTILITIES COMMISSION MICHAEL DUVAL DEPUTY ATTORNEY GENERAL IDAHO PUBLIC UTILITIES COMMISSION PO BOX 83720 BOISE, IDAHO 83720-0074 (208) 334-0320 IDAHO BAR NO. 11714 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 ROCKY MOUNTAIN ) POWER'S APPLICATION TO UPDATE ) CASE NO. PAC-E-24-12 LOAD AND GAS FORECASTS USED IN THE ) INTEGRATED RESOURCE PLAN AVOIDED ) COST MODEL ) COMMENTS OF THE COMMISSION STAFF COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission ("Commission"), by and through its Attorney of record, Michael Duval, Deputy Attorney General, submits the following comments. BACKGROUND On October 15, 2024, Rocky Mountain Power, a division of PacifiCorp ("Company"), applied to the Commission for approval of an updated load forecast, an updated natural gas price forecast, and updated contract information used as inputs in the Company's Integrated Resource Plan based("IRP-based") avoided cost calculations—as required by Order Nos. 32697 and 32802 ("Application"). The Company requested the update be approved with an effective date of January 1, 2025, which is in compliance with Order No. 35317. STAFF COMMENTS 1 DECEMBER 4, 2024 IRP-based avoided cost rates are available to Qualifying Facilities that are above the resource-specific project eligibility cap for published avoided cost rates under Idaho's implementation of the Public Utility Regulatory Policies Act of 1978 ("PURPA"). STAFF ANALYSIS Staff has reviewed the Application and recommends the following, with an effective date of January 1, 2025: 1. The proposed load forecast for the period from 2025 through 2043 be approved; and 2. The proposed natural gas forecast for the period from 2025 through 2043 be approved. Load Forecast The proposed load forecast is similar to last year's load forecast over the next several years, and Staff believes this is reasonable given similar economic conditions between the two forecasts. Staff conducted two comparison analyses: (1) a comparison of the proposed load forecast with the approved one in Case No. PAC-E-23-20; and(2) a comparison of the proposed load forecast with the draft 2025 IRP load forecast shown at the 2025 IRP Public Input Meeting on June 26-27, 2024. Comparison to Case No. PAC-E-23-20 Staff compared the load forecast proposed in this case with the approved one in Case No. PAC-E-23-20 and discovered that starting in 2032, the proposed load forecast is consistently higher than the approved forecast by approximately 3,000 MW to 4,000 MW, as shown in Figure No. 1. The Company explained the increase is caused by a higher forecast for large customers, specifically industrial and commercial customers in Utah and Oregon. See response to Staff Production Request No. I and Application at 2. Staff believes the justification provided by the Company is reasonable. Additionally,because the length of IRP-based PURPA contracts is up to two years, the proposed load forecast in the near term is critical. The comparison shows that the proposed load forecast is similar to the approved load forecast in Case No. PAC-E-23-20, and Staff believes it is reasonable. STAFF COMMENTS 2 DECEMBER 4, 2024 100,000 80,000 -- --fl--O--O--a--O--Q--Q--�-- --Q-- L 60,000 M m v i `0 � 40,000 M 0 J 20,000 f Proposed load forecast in this case --0--Approved load forecast in Case No.PAC-E-23-20 0 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Figure No. 1: Comparison Between Proposed Load Forecast and Approved Load Forecast in Case No. PAC-E-23-20 Comparison to Draft 2025 IRP Load Forecast Staff also compared the proposed load forecast with the draft 2025 IRP load forecast shown at the 2025 IRP Public Input Meeting on June 26-27, 2024, and discovered that the proposed load forecast is lower than the draft 2025 IRP load forecast. (See Figure No. 2) The Company explained that this is because the draft 2025 IRP load forecast doesn't account for demand-side management("DSM") for the cost-effective DSM selection in the planning process, whereas the proposed load forecast accounts for the Company's current expectation of DSM impacts. See response to Staff Production Request No. 3. Staff believes that the Company's justification is reasonable. STAFF COMMENTS 3 DECEMBER 4, 2024 Load Forecast 120,000 100,000 80,000 y' 60,000 40,000 20,000 0 ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- 2025 2026 2027 2028 2029 2030 20312032 2033 2034 2035 2036 2037 2038 2039 2040 20412042 2043 2044 Load Forecast-June 2024 tDraft 2025 IRP Lwd Foretasl t2023I V Update t2023I V Figure No. 2: Comparison Between Proposed Load and Load Forecast and Draft 2025 IRP Load Forecast Shown at the 2025 IRP Public Input Meeting on June 26-27, 2024 Natural Gas Forecast Staff believes the proposed natural gas forecast is reasonable based on the expected oversupply of natural gas in the forwards market and also based on the fact the proposed natural gas forecast is similar to Avista's gas forecast. Staff conducted two comparison analyses: (1) a comparison of the proposed natural gas forecast to the approved natural gas forecast in Case No. PAC-E-23-20; and(2) a comparison of the proposed natural gas forecast to Avista's proposed natural gas forecast in Case No. AVU-E-24-10. Comparison to Case No. PAC-E-23-20 Staff compared the proposed natural gas forecast for Henry Hub to the approved natural gas forecast for Henry Hub in Case No. PAC-E-23-20 and focused on the next three years, a critical timeframe for IRP-based PURPA contracts. Staff discovered that the proposed natural gas forecast is lower than the approved natural gas forecast in Case No. PAC-E-23-20 over the next three years. See Figure No. 3. STAFF COMMENTS 4 DECEMBER 4, 2024 Gas Forecast for Henry Hub 10 s m 6 � 4 2 0 tih ti� tit ti� ti� �O �y �ti �'� �0 �h '��O �� 4� poi tp NI'y N'l. NO, ,ti0 ,ti0 ,ti0 ,ti0 0 ,ti0 ,ti0 ,ti0 ,ti0 ,ti0 Proposed Gas Forecast for Henry Hub —Gas Forecast for Henry Hub in PAC-E-23-20 Figure No. 3: Comparison Between Proposed Gas Forecast and Approved Gas Forecast in PAC- E-23-20 The Company explained that the forecast over the next three years is based on the prices in the forwards market and that forward expectations of oversupply of natural gas due to excess production or limited demand could lead to lower prices. See response to Staff Production Request No. 4. Staff believes the justification provided by the Company is reasonable. Comparison to Avista's Natural Gas Forecast Staff also compared the proposed gas forecast for Henry Hub to Avista's gas forecast for Henry Hub in Case No. AVU-E-24-10. These two forecasts are similar over the next few years, which is a critical timeframe for IRP-based PURPA contracts. (See Figure No. 4.) Therefore, Staff believes the proposed gas forecast is reasonable. STAFF COMMENTS 5 DECEMBER 4, 2024 Gas Forecast Comparison 10 s i m a 4 2 0 tih Leo tit �g tier �® g5 p3 �� '�h �0 �� 3$ �a� 00 �y pL �O �O '0 ZO ,ti0 -0 O 0 -P 0 nO LO -6) ti0 �0 �O y0 y0 LO PAC's Henry Hub Forecast(PAC-E-24-12) Avista's Henry Hub Forecast(AVU-E-24-10) Figure No. 4: Comparison Between Rocky Mountain Power's Gas Forecast and Avista's Gas Forecast Contract Updates Contract updates are incorporated into the IRP model on a continuous basis, but the annual filing provides an opportunity for the Commission to review and monitor these updates. Staff believes the contract updates included in the Application are correct. STAFF RECOMMENDATION Staff recommends the following, with an effective date of January 1, 2025: 1. The proposed load forecast for the period from 2025 through 2043 be approved; and 2. The proposed natural gas forecast for the period from 2025 through 2043 be approved. Respectfully submitted this 4th day of December 2024. Michael Duval Deputy Attorney General Technical Staff. Yao Yin Seungjae Lee I:\Utility\UMISC\COMMENTS\PAC-E-24-12 Comments.doex STAFF COMMENTS 6 DECEMBER 4, 2024 CERTIFICATE OF SERVICE I HEREBY CERTIFY THAT I HAVE THIS I-DAY OF DECEMBER 2024, SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE NO. PAC-E-24-12, BY E-MAILING A COPY THEREOF, TO THE FOLLOWING: MARK ALDER JOE DALLAS ROCKY MOUNTAIN POWER ROCKY MOUNTAIN POWER 1407 WEST NORTH TEMPLE STE 330 825 NE MULTNOMAH ST SALT LAKE CITY UT 84116 STE 2000 E-MAIL: mark.alder ypacificorp.com PORTLAND OR 97232 E-MAIL: joseph.dallas(a�pacificorp.com DATA REQUEST RESPONSE CENTER E-MAIL ONLY: datarequestApacificorp.com PA RICIA JORDAN, S RETARY CERTIFICATE OF SERVICE