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Home My WebLink About20250117Compliance Filing (Redacted).pdf 04 -�IQAFIOPOWER. MEGAN GOICOECHEA ALLEN Corporate Counsel RECEIVED mgoicoecheaallen(cD_idahopower.com Friday, January 17, 2025 IDAHO PUBLIC UTILITIES COMMISSION January 17, 2025 VIA ELECTRONIC MAIL Commission Secretary Idaho Public Utilities Commission 11331 West Chinden Blvd., Building 8 Suite 201-A Boise, Idaho 83714 Re: Case No. I PC-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 Compliance Filing in the above-entitled matter. If you have any questions about the attached documents, please do not hesitate to contact me. Attachment No. 1 to the Compliance Filing is confidential. Please handle the confidential information in accordance with the Protective Agreement executed in this matter. Very truly yours, �� uLXIU�►L Megan Goicoechea-Allen MGA: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: (208) 388-5317 Facsimile: (208) 388-6936 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 ) NATURAL GAS FORECAST MODEL. ) COMPLIANCE FILING Idaho Power Company ("Idaho Power" or "Company") hereby respectfully submits to the Idaho Public Utilities Commission ("Commission") the accompanying natural gas forecast submittal in compliance with Final Order No. 36434 in the above-captioned case. I. INTRODUCTION AND BACKGROUND On October 15, 2024, Idaho Power filed its annual Compliance Filing to update the load forecast and natural gas forecast components of the Incremental Cost Integrated Resource Plan ("ICIRP") avoided cost methodology as well as the long-term contract changes and the Peak and Premium Peak Hours used to calculate capacity payments for energy storage Public Utility Regulatory Policies Act of 1978 qualifying facilities ("QF"). On December 30, 2024, the Commission issued Order No. 36434 approving the IDAHO POWER COMPANY'S NATURAL GAS FORECAST COMPLIANCE FILING - 1 Company's update to its load forecast, contract changes, Peak Hours, and Premium Peak Hours as filed. However, the Commission declined to adopt the Company's natural gas price forecast and directed the Company to submit as a compliance filing a three-year natural gas forecast utilizing the latest NYMEX forward prices to be used to determine avoided cost rates for contracts signed after January 1, 2025. As noted by the Commission, it previously directed a similar requirement in Case No. IPC-E-21-35 related to the Company's 2021 natural gas price annual update. More specifically, in Order No. 35294 issued in that case on January 21, 2022, the Commission directed the Company to "file a three-year natural gas forecast update as a compliance filing to this case, utilizing the latest NYMEX forwards prices to determine IRP avoided cost rates for contracts signed after January 1 , 2022, until the effective date of the next natural gas price forecast annual update." Subsequently, on February 11, 2022, the Company asked for clarification/reconsideration regarding how the Commission intended the Company to revise its natural gas forecast. Specifically, Idaho Power explained that the natural gas price forecasts historically included ten years or more of data, and while ICIRP avoided cost methodology contracts are limited to maximum term of two years, a project requesting such pricing could request a term starting one or more years in the future. As a result, the ICIRP model needs gas price forecasting for the full term of the requested contract, which may extend beyond three years from the time of the request, depending on the requested Commercial Operation Date. In summary, Idaho Power explained that "additional years of pricing are necessary to ensure that the ICIRP model functions as intended and can calculate pricing for the full term requested by a given project." Idaho IDAHO POWER COMPANY'S NATURAL GAS FORECAST COMPLIANCE FILING - 2 Power Company Petition for Clarification and/or Reconsideration, Case No. IPC-E-21-35, at 4-5. As a result of its concerns, Idaho Power proposed a method of calculating the forecast to extend for a full twenty years. Idaho Power also requested the Commission verify that it intended for Idaho Power to use the NYMEX forward natural gas prices as of October, rather than the "latest" as of December, which was consistent with the guidance previously provided by the Commission in Order No. 35294: "[T]his case is intended to annually update load and gas forecasts as of October 15 of each year. The Platts [December] update is inappropriate for use with this annual load and gas forecast because it was not generated until December." Addressing the Company's concerns, the Commission issued an order on reconsideration, Order No. 35344, on March 10, 2022, directing the Company to: (1) use NYMEX forwards prices as of October 15, 2021, for years 2022, 2023, and 2024 of the 20-year forecast; (2) use an average of year 2025 NYMEX forwards prices and year 2025 of the July 2021 vintage Platts forecast for year 2025 of its forecast; (3) use the July 2021 vintage Platts forecast for the remaining years of the forecast (years 2026-2041)1; and (4) submit the update 20-year forecast as a compliance filing. The Company submitted its revised natural gas forecast as directed on April 8, 2022, which was approved by the Commission in Order No. 35395 on May 2, 2022. In this Compliance Filing, the Company is providing a natural gas forecast calculated using the same methodology the Commission directed in Order No. 35344, as the same principles and drivers continue to apply. The July 2021 vintage Platts forecast only provides values through 2040. After consultation with Commission Staff, Idaho Power used a linear regression analysis of the last five years of the Platts forecast, 2036 through 2040, to produce a forecast value for 2041. IDAHO POWER COMPANY'S NATURAL GAS FORECAST COMPLIANCE FILING - 3 II. THE FILING Pursuant to the Commission's direction in Order No. 36434, and consistent with the method required by Order No. 35344, Idaho Power provides herewith as CONFIDENTIAL Attachment 1 a revised natural gas price forecast as follows: (1) using NYMEX forwards prices as of October 15, 2024, for years 2025, 2026, and 2027 of the 20-year forecast; (2) using an average of the October 15, 2024 NYMEX forwards prices and September 2024 vintage Platts forecast for year 2028 of its forecast; and (3) using the September 2024 vintage Platts forecast for the remaining years of the forecast (years 2029-2044). III. REQUEST FOR RELIEF Idaho Power respectfully requests that the Commission accept the revised natural gas forecast in compliance with the Commission's directive in Order No. 36434. Respectfully submitted this 17th day of January 2025. MEGAN GOICOECHEA ALLEN Attorney for Idaho Power Company IDAHO POWER COMPANY'S NATURAL GAS FORECAST COMPLIANCE FILING - 4 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 17th day of January 2025, 1 served a true and correct copy of the within and foregoing IDAHO POWER COMPANY'S NATURAL GAS FORECAST COMPLIANCE FILING 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 a4DU4-- Christy Davenport, Legal Assistant IDAHO POWER COMPANY'S NATURAL GAS FORECAST COMPLIANCE FILING - 5 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-24-40 IDAHO POWER COMPANY CONFIDENTIAL ATTACHMENT 1 Revised Natural Gas Price Forecast ATTACHMENT 1 IS CONFIDENTIAL AND WILL BE PROVIDED TO THOSE PARTIES THAT EXECUTE THE PROTECTIVE AGREEMENT IN THIS MATTER