20250227Staff Comments .pdf

RECEIVED
Thursday, February 27, 2025 9:10:57 AM
IDAHO PUBLIC
UTILITIES COMMISSION
CHRIS BURDIN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 9810
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-24-42
APPROVAL OF A POWER PURCHASE )
AGREEMENT WITH BLACKS CREEK )
ENERGY CENTER, LLC ) COMMENTS OF THE
COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its Attorney of record, Chris Burdin, Deputy Attorney General,
submits the following comments.
BACKGROUND
On November 8, 2024, Idaho Power Company("Company") filed an application
("Application") with the Commission requesting approval of a 20-year Power Purchase
Agreement ("PPA") between the Company and Blacks Creek Energy Center, LLC ("Blacks
Creek").
On October 11, 2024, the Company and Blacks Creek entered into a PPA for the sale and
purchase of 320 megawatts ("MW") of renewable solar electric generation for a term of twenty
years from the Commercial Operation Date, scheduled to be December 31, 2027.
STAFF COMMENTS 1 FEBRUARY 27, 2025

STAFF ANALYSIS
Staff s review focused on the procurement process, the definition of Market Price Index,
the Loss of Load Expectations ("LOLE") reliability analyses, and the relationship between
Performance Ratio and Effective Load Carrying Capability ("ELCC"). Staff recommends the
Commission order the Company to file a compliance filing to reflect the following:
1. The parties modify the definition of Market Price Index and how it is determined to
avoid potential impacts of Washington's Climate Commitment Act("CCA") on Idaho
ratepayers.
2. The Company update the ELCC by using the most recent load and contracted
resource data as of the contract execution date of October 11, 2024.
3. The Company include additional load and resource adjustments to reflect near-term
trends ("Final Study")when informing the monthly distribution of the annual
payment.
4. The Company create "seasons"based on the 2028 Loss of Load Probability
("LOLP")profiles determined in the Final Study.
5. The Company identify high-risk hours based on the 2028 LOLP profiles determined
in the Final Study, with no expansion of risk-hours.
6. The Company establish the relationship between Performance Ratio and ELCC based
on the Final Study. Additionally,
a. The Company use increments of 0.05 of Performance Ratio to create data points;
and
b. The Company use a method of the best-fit linear equation with constraints of
100% of the original ELCC at Performance Ratio of 1.0.
Procurement Process
Blacks Creek was identified as a resource by Brisbie's renewable energy team through its
own Request for Proposals ("RFP")process. Idaho Power did not conduct an RFP for the Blacks
Creek resource. Response to Staff Production Request No. 17. As such, Staff is not concerned
about the project being used to meet Brisbie's needs at the expense of potentially being selected
to serve the Company's needs.
STAFF COMMENTS 2 FEBRUARY 27, 2025

Definition of Market Price Index
The definition of the Market Price Index in this PPA could subject Idaho ratepayers to the
impacts of Washington's CCA. The Commission has previously expressed that the costs
associated with the CCA should not be borne by Idaho ratepayers. See Order Nos. 36015,
36207, and 36367. Therefore, Staff recommends that the parties modify the definition of Market
Price Index to avoid potential impacts of CCA on Idaho ratepayers.
The Market Price Index is defined as "82.4% of the monthly arithmetic average of each
day's Intercontinental Exchange daily firm Mid-C Peak Avg and Mid-C Off-Peak Avg index
prices in the month as follows...." Staff believes that this definition and method will allow
market prices to reflect the impacts of the CCA.
In several power purchase agreements recently approved by the Commission, such as the
contracts in Case Nos. IPC-E-22-29 and IPC-E-24-01, market prices are defined as
"82.4% of the monthly arithmetic average of each day's Intercontinental Exchange
("ICE") daily firm Mid-C Peak Avg and Mid-C Off-Peak Avg index prices with such
prices being the index representing or adjusted to assume, a price for energy that is not
delivered to a final point of delivery in a balancing authority area located entirely
Washington, or a designated scheduling point associated with a Washington retail
provider within a balancing authori . area operated by a federal power marketing
administration, in the month as follows...." (Emphasis added)
Staff believes this definition and method for determining the price will allow Idaho ratepayers to
avoid potential impacts of CCA. Therefore, Staff recommends that the parties modify the
definition of the Market Price Index and the method used to determine the price to avoid
potential impacts of CCA on Idaho ratepayers.
LOLE Reliabili . Analyses
The Company conducted a series of LOLE reliability analyses to determine the Capacity
Credit Payment Structure for Blacks Creek.
• Step 1: The Company conducted the first LOLE reliability analysis to determine the
ELCC of Blacks Creek in 2028, which will be used to calculate the annual payment
fixed throughout the contract term. Because the project's Commercial Operation
Date is December 31, 2027, Year 2028 is utilized in the analysis.
STAFF COMMENTS 3 FEBRUARY 27, 2025

• Step 2: The Company then carried out the second LOLE reliability analysis for 2028
with additional adjustments of load and resource data to account for the expected
changes after 2028. The adjustments included two RFP projects and load ramps of
Meta and Micron. See Responses to Staff Production Request Nos. 2 and 21. This
analysis is used to inform the monthly distribution of the annual payment.
• Step 3: Then, the Company grouped the twelve months into three seasons to calculate
seasonal monthly LOLE weighted averages for distributing the annual payment.
• Step 4: Lastly, the Company expanded the high-risk hours identified from the LOLE
reliability analysis in the 2023 Integrated Resource Plan("IRP") for calculating
Performance Ratios during the timeframes. Performance Ratios are used to determine
if a reduction in payment should be applied to Blacks Creek.
Staff s review focused on three areas in the LOLE reliability analyses: (a) load and
resource data used in the reliability analyses, (b)predetermined seasonal buckets, and(c) the
method for determining high-risk hours. Staff discusses each area below.
A. Load and Resource Data
The Company used different load and resource data in different steps of the LOLE
reliability analyses mentioned above. For the analysis in Step 1, the Company used contracted
resources and the published load forecast available at the time of the Blacks Creek contract
execution. Response to Staff Production Request No. 22. Contracted resources included a
project(Case No. IPC-E-24-16) that was contracted prior to Blacks Creek but was approved by
the Commission after the Blacks Creek contract execution. Response to Staff Production
Request No. 21(e). They also included two battery storage facilities in Case No. IPC-E-24-45:
one was contracted prior to the Blacks Creek project but is not yet approved, and the other was
not contracted prior to the Blacks Creek but was mistakenly included in the analysis by the
Company. Response to Staff Production Request No. 21 (e). Staff believes it is reasonable to
only include contracted resources as of the execution date of October 11, 2024. Therefore, Staff
recommends that the Company file a compliance filing excluding the project that was not
contracted prior to the Blacks Creek but mistakenly included in calculating the ELCC of Blacks
Creek.
STAFF COMMENTS 4 FEBRUARY 27, 2025

The purpose of Step 2 is to inform distribution of the annual payment by determining the
high-risk months when delivery of capacity is critical to the system. To meet this intent, Staff
believes it is important that the most accurate forecast of load and resources based on the latest
information is used to determine the amount of risk in each month.
Step 2 included two additional REP projects and the load ramps of both Meta and
Micron. One of the two RFP projects is the Jackalope Wind project from Case No. IPC-E-24-46.
The other RFP project is still under contract negotiations. Response to Staff Production Request
No. 21 (c). In addition, to address the industrial load ramp, the Company added approximately
70-MW of a resource in November and December to annualize the impact so that all winter
months (i.e., January, February,November, and December) are at a similar level.
To inform the monthly distribution of the annual payment, Staff believes it is reasonable
to use the latest load information including the load ramps to capture near-term trends and all the
resources the Company proposed for Step 2 in their Application, which included the two REP
projects and the 70-MW annualizing resource for the load adjustment. Staff believes this
annualizing adjustment is reasonable to ensure the highest risk months are identified under more
steady state conditions. Therefore, Staff recommends, after Step I is updated and a new ELCC
is calculated for Blacks Creek, the Company conduct the Final Study with the latest load
information including the load ramps and all the proposed resources to determine the monthly
distribution of the annual payment.
B. Predetermined Seasonal Buckets
Next, the Company grouped twelve months into three different seasonal buckets to
calculate seasonal monthly LOLE weighted averages for distributing the annual payment across
all months: summer(June, July and August), winter(January, February, November, and
December), and off-season(March, September, and October). However, the seasonal grouping
was not guided by the LOLP profiles, and these three groups were selected before the reliability
analysis was conducted. Response to Staff Production Request No. 5 (f).
Staff believes that the grouping should not be predetermined; instead, it should be guided
by the 2028 LOLP profiles in the Final Study. If the groupings are not based on the LOLP
profiles, time periods that have similar reliability characteristics may not be grouped together,
STAFF COMMENTS 5 FEBRUARY 27, 2025

while time periods that have different reliability characteristics may be grouped together, both of
which could potentially lead to biased results.
In the 2023 IRP, the seasons of highest risk were determined by selecting the LOLP
values that made up 90% of the total LOLPs. Then these LOLPs were grouped by their time of
occurrence to create the seasons of highest risk. Appendix C of 2023 IRP at 92-93. Similarly,
Staff believes the seasons in this case should be determined based on the LOLP profiles in the
Final Study.
C. Method for Determining High-Risk Hours
Because capacity is needed during the high-risk hours, capacity credit payment is
associated with the high-risk hours. To determine monthly payments, the Company used
Performance Ratio to measure the actual system performance against the expected output and
evaluated whether the monthly Performance Ratio threshold is met. If a month's Performance
Ratio meets its monthly threshold, the project will receive the full monthly payment. If a
month's Performance Ratio does not meet its monthly threshold, a reduction in payment will be
applied. Each month's Performance Ratio is calculated based on high-risk hours within that
month.
To identify high-risk hours, the Company used the high LOLP hours from the 2023 IRP
as a starting point, which was based on Year 2025's load and resource data. Response to Staff
Production Request No. 11 (b). Then, the Company expanded the range of the high-risk hours to
include more sunlight hours so that more solar data can be collected and used to calculate the
monthly Performance Ratio. Response to Production Request No. 23 (b) and(d).
Staff has identified three issues with the Company's method. First, Staff believes it is not
appropriate to use Year 2025 as the starting point for identifying high-risk hours in Year 2028.
Second, Staff believes that high-risk hours should be strictly driven by the system's capacity
needs, regardless of solar energy production patterns or solar measurement variability. Lastly,
Staff is not overly concerned about lack of data for calculating the monthly Performance Ratio
that determines payment reductions,because each month's payment is capped. By including
low-risk hours, the alignment between system capacity needs and capacity credit payments will
be broken. Therefore, Staff recommends that the Company determine high-risk hours based on
the 2028 LOLP profiles determined in the Final Study, with no expansion of high-risk hours.
STAFF COMMENTS 6 FEBRUARY 27, 2025

Relationship between Performance Ratio and ELCC
In order to be consistent with the load and resource data used in other steps of the
reliability LOLE analyses, Staff recommends that the Company use the Final Study to establish
the relationship between Performance Ratio and ELCC for the payment reduction calculation.
Additionally, Staff recommends that the Company use 0.05 increments of Performance Ratio and
the best-fit linear equation with constraints of 100%ELCC at 1.0 Performance Ratio for the
calculation.
A. Increments of Performance Ratio
The Company used six data points to show the relationship between Performance Ratio
and ELCC. Table No. 1. To obtain the data points, the Company first calculated the ELCC of
the project, assuming a Performance Ratio of 1.0 (or 100% of the original output). Then every
hour of the generation is reduced to a Performance Ratio of 0.9 (or 90% of the original output),
and another ELCC is calculated. As the output decreases, the ELCC value declines. This
process is repeated for the Performance Ratio range of 0.5 to 1.0 in increments of 0.1 to create
the corresponding ELCC values. Response to Staff Production Request No. 13 (b).
Table No. 1: Six Data Points (Response to Staff Production Request No. 13 (a))
Performance Ratio 1.0 0.9 0.8 0.7 0.6 0.5
(Solar Output)
Percentage of 100.00% 93.46% 85.96% 78.69% 70.22% 60.29%
Original ELCC
Staff recommends that the Company use 0.05 increments of Performance Ratio to
establish the relationship between Performance Ratio and ELCC, instead of 0.1 increments.
First, more data will be generated with 0.05 increments of Performance Ratio, which can result
in a more accurate relationship between Performance Ratio and ELCC. Second,because the
Performance Ratio target is 0.95 for months of June through September, Staff believes it is
appropriate to use 0.05, an increment with two decimal places.
B. Linear Trendline
STAFF COMMENTS 7 FEBRUARY 27, 2025

After obtaining the six data points, the Company used linear interpolation to develop a
linear trendline to estimate values between data points. Linear interpolation creates straight lines
by directly connecting two data points, which creates five segments between six data points.
This method ensures that the trendline will pass through all the data points. However, each
segment has a different decreasing rate of ELCC and a different payment reduction rate.
An alternative method discussed but not proposed by the Company is the best-fit linear
equation method, which produces one straight line, instead of five segments, informed by all the
data points. Mathematically, the equation is expressed as follows:
Y=0.78727084X+ 0.22391329; where, X=Performance Ratio, and Y= Percentage of Original
ELCC. Response to Staff Production Request No. 13 (a).
The Company believes this method, unlike the linear interpolation method, can introduce
small errors for each individual point, because the resulted straight line does not go through the
data points. Response to Staff Production Request No. 28.
Staff believes the best-fit linear equation method is better,because it can reflect the
overall trend and can have a uniform payment reduction rate. However, Staff is concerned that
when X= 1.0, Y= 1.01 (which is greater than 1.0). This does not reflect that 100% of the
original ELCC is achieved at a 1.0 of Performance Ratio, with no payment reductions needed.
Response to Staff Production Request No. 27 (a).
In order to achieve the goal: where Y is 1 when X is 1.0, Staff proposes an improved
method of the best-fit linear equation with constraints of 100% of the original ELCC at
Performance Ratio of 1.0. The proposed method's equation is mathematically expressed as
follows:
Y=0.75676X+ 0.243241; where, X=Performance Ratio and Y=Percentage of
Original ELCC.
Staff believes this method can better reflect the overall trend being informed by all the
data points, while ensuring 100% of the original ELCC is achieved at 1.0 of Performance Ratio.
' This equation is based on the six data points in the original analysis. When more data points are created as per
Staff s recommendation,the equation will change.
STAFF COMMENTS 8 FEBRUARY 27, 2025

STAFF RECOMMENDATION
Staff recommends the Commission order the Company to file a compliance filing to
reflect the following:
1. The parties modify the definition of Market Price Index and how it is determined to
avoid potential impacts of Washington's CCA on Idaho ratepayers.
2. The Company update the ELCC by using the most recent load and contracted
resource data as of the contract execution date of October 11, 2024.
3. The Company include additional load and resource adjustments to reflect near-term
trends when informing the monthly distribution of the annual payment.
4. The Company create"seasons"based on the 2028 LOLP profiles determined in the
Final Study.
5. The Company identify high-risk hours based on the 2028 LOLP profiles determined
in the Final Study, with no expansion of risk-hours.
6. The Company establish the relationship between Performance Ratio and ELCC based
on the Final Study. Additionally,
a. The Company use increments of 0.05 of Performance Ratio to create data points;
and
b. The Company use a method of the best-fit linear equation with constraints of
100% of the original ELCC at Performance Ratio of 1.0.
Respectfully submitted this 271h day of February 2025.
OkA.
Chris Burdin
Deputy Attorney General
Technical Staff. Yao Yin
Seungjae Lee
1:\Utility\UMISC\COMMENTS\1PC-E-24-42 Comments.docx
STAFF COMMENTS 9 FEBRUARY 27, 2025

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS ,, I DAY OF FEBRUARY 2025,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. IPC-E-24-42, BY E-MAILING A COPY THEREOF, TO THE FOLLOWING:
DONOVAN E. WALKER TIM TATUM
IDAHO POWER COMPANY CONNIE ASCHENBRENNER
PO BOX 70 GRANT ANDERSON
BOISE ID 83707-0070 IDAHO POWER COMPANY
E-MAIL: dwalkergidahopower.com PO BOX 70
dockets(?
idahopower.com BOISE ID 83707-0070
energycontractsgidahopower.com E-MAIL: ttatum(?idahopower.com
caschenbrennergidahopower.com
gandersongidahopower.com
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PATRICIA J RDAN, CRETARY
CERTIFICATE OF SERVICE