20190315Avista to Staff 1-9.pdf

Avista Corp.
1411 East Mission P.O.Box3727
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
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S$March 14,2019
Idaho Public Utilities Commission
472 W. Washington St.
Boise, ID 83702-0074
Attn: Edward Jewell
Deputy Attorney General
Re: Production Request of the Commission Staff in Case No. AVU-E-19-01
Dear Mr. Jewell,
Enclosed are Avista's responses to IPUC Staffs production requests in the above referenced
dockets. Included in this mailing are the original and two paper copies of Avista's responses to
production requests: Staff 001 - 009. The electronic versions of the responses were emailed on
031t4119.
If there are any questions regarding the enclosed information, please contact Paul Kimball at (509)
495-4584 or via e-mail at [e-mail]
Sincerely,
Paul Kimball
Regulatory Analyst
Enclosures
CC (Email):IPUC (Hanian)
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-19-01
Staff
Production Request
Staff-0O1
DATE PREPARED: 0311512019WITNESS: Clint Kalich
RESPONDER: James Gall
DEPARTMENT: Energy Resources
TELEPHONE: (s09) 49s-2189
REQUEST:
Please describe any potential decisions the Company will not be able to make or identify due to a 6
month extension of the IRP filing date.
RESPONSE:
Avista does not foresee any significant decisions impacted by a six month delay in the IRP f,rling.
Avista's view is the delay will allow for making better long term decisions regarding our
generating resource portfolio and demand management programs once the legislative process is
complete.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JUzuSDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-19-01
Staff
Production Request
Staff-002
DATE PREPARED: 0311512019WITNESS: Clint Kalich
RESPONDER: James Gall
DEPARTMENT: Energy Resources
TELEPHONE: (s09) 49s-2189
REQUEST:
What types of subsequent filings that rely on the IRP will be impacted by the extension (e.g.
PURPA deficit date and avoided cost filings) and what would the impacts be?
RESPONSE:
Power Related Filings:
Avista's filing for the PURPA related capacity deficiency period could still be made using the
Company's most current capacity planning information. This includes the Company's most recent
capacity position with load and resource forecasts, and the most recent natural gas price forecast.
Altematively, the Company could use its draft2020lRP assumptions.
In the event any PURPA related contract filings are required prior to finalization of the IRP,
pricing could use either the 2017 IRP result or draft 2020 IRP results.
Conservation Related Filings:
The Company plans to file its 2020 Energy Efficiency Annual Conservation Plan (ACP) in
November 2019 and recognizes that the extension could have a potential impact on the energy
effrciency savings target identified in that plan. Historically, the ACP's kWh target had been
established in the IRP process and delaying the IRP could cause misalignment between the
November 2019 ACP filing and the availability of information to establish an updated savings
target.
A discussion will need to occur between the Company and Commission Staff to determine the
appropriate interim savings target that should be used until the IRP if finalized.
In the absence of an IRP target, a conservation savings goal could be set utilizing the Company's
business planning process which identifies a target achievement based on historical results and
future predictions of program throughput.
Alternatively, the 2017 IRP could be utilized to determine an interim savings goal by applying the
2019 savings target to 2020. This approach is preferred and is consistent with what the Company
is doing in its Washington jurisdiction.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JUzuSDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E- l9-01
Staff
Production Request
Staff-003
DATE PREPARED:
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
031r512019
Clint Kalich
James Gall
Energy Resources
(s09) 49s-2189
REQUEST:
What risks has the Company identified that are created by an extension of the IRP filing date?
RESPONSE:
Due to Avista's energy and capacity long position (no new capacity resources are needed until
2027), the Company has not identified any risks with delaying the IRP filing until February 2020.
Avista believes not delaying the IRP would create more uncertainty regarding its long term
resource plans due to the unknown details of potential energy bills in the states Avista serves.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E- l9-01
Staff
Production Request
Staff-004
DATE PREPARED: 0311512019WITNESS: Clint Kalich
RESPONDER: James Gall
DEPARTMENT: Energy Resources
TELEPHONE: (s09) 495-2189
REQUEST:
What options could the Company undertake to mitigate any risks by extending the IRP filing date?
(e.g. file an update to the 2017 IRP)
RESPONSE:
As explained in PR 3, the purpose of the six month extension is to mitigate, not increase, risk
associated with publishing an IRP including various analyses made irrelevant by new legislation.
The 2019 IRP process envisioned studying several potential energy legislation scenarios to
understand the changes in resource strategies due to potential legislative outcomes. Even with
these alternatives small but significant legislative changes could alter our resource strategy.
Delaying the filing by six months should eliminate these risks by allowing the Company to model
actual legislation. Filing updates or mid-term IRP's provides intermediate information that is short
lived in its use because a new plan is required every other year.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E- 19-01
Staff
Production Request
Staff-005
DATE PREPARED: 0311512019WITNESS: Clint Kalich
RESPONDER: James Gall
DEPARTMENT: Energy Resources
TELEPHONE: (s09) 49s-2189
REQUEST:
What kind of changes will the Company need to make to their modeling methodology and analysis
if the different types of legislation passes? Please explain why these changes are important.
RESPONSE:
Avista does not anticipate any significant modeling methodology changes from delaying the IRP.
However, the data and assumptions used in the 2020 IRP will be updated to reflect the most current
information available at the time the IRP is developed. Avista previously planned a methodology
change from the 2017 IRP that would split Washington and Idaho load and allocated resources to
serve state loads. This methodology change was discussed during a recent TAC meeting and is
necessary ifone state prefers higher cost resources than the other state.
The proposed legislation in multiple states if passed would impact both Northwest energy markets
and Avista resource decisions for capacity and energy resources in Washinglon and Idaho. Some
of the potential legislation includes specific state cap and trade markets, greenhouse gas taxes, coal
plant shutdowns, increased renewable energy mandates- including banking provisions and
resource availability determinates.
Each of the altematives being proposed will impact the NW electric energy market, which in tum
affects the resource decision choices for Idaho customers to serve its future capacity shortfalls
identified in the 2017IRP. Further, any legislation from other states may impact Idaho's customers
share of coal capacity by changing the timing and quantity of new resources required to serve
Idaho's peak load. Further, potential cap and trade legislation in Oregon could impact the
economic viability of Avista's ownership of Coyote Springs 2. Delaying the IRP filing by six
months should allow the company to understand and quantify the changes in the marketplace and
the economic viability of existing and future resource choices.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JUzuSDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-19-01
Staff
Production Request
Staff-006
DATE PREPARED: 0311512019WITNESS: Clint Kalich
RESPONDER: James Gall
DEPARTMENT: Energy Resources
TELEPHONE: [phone]
REQUEST:
If the extension is approved, will the Company plan to use the altemative futures and scenarios
discussed at the second TAC meeting on November 27,2019?
RESPONSE:
Note: Avista interprets this question to be related to November 27,2018
If the extension is approved, the Company will propose alternative futures and scenarios more
relevant to any legislation passed in the states Avista serves. Avista's proposed futures and
scenarios will come from the November 27,2018 meeting and will be altered where necessary. For
example, if legislation passes in Washington and Oregon, additional studies could be completed,
including scenarios to incorporate proposed national energy policy changes, specific resource
acquisitions or divestitures, or specific scenarios requested by TAC members. Avista has
identified June I 5,2019 as a new deadline for submitting new study requests.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JUzuSDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-19-01
Staff
Production Request
Staff-007
DATE PREPARED: 03/1512019WITNESS: Clint Kalich
RESPONDER: James Gall
DEPARTMENT: Energy Resources
TELEPHONE: (509) 49s-2189
REQUEST:
Could the Company incorporate the legislation into the normal IRP process as separate what-if
cases or scenarios?
RESPONSE:
Avista anticipated that legislation uncertainty would be an issue during the IRP process. To
address this, the Company recommended performing three o'what if' futures rather than one
o'expected case". The'owhat if' scenarios provide general guidance regarding policy directions, but
will not be as precise depending on the specifics of the proposed energy policies. For example, the
state of Washington is pursuing an 80 percent renewable energy delivery goal by 2030, but is also
contemplating allowing utilities to bank excess renewables from prior years, or allowing them to
use a multi-year compliance period. Depending on the method the state chooses to handle
renewable uncertainty, Avista may need to acquire resources beyond the 80 percent goal due to
renewables' annual delivery unpredictability related to weather. Further, the Company's next
resource decision for capacity needs could accelerate due to the treatment of coal resources,
specifically Colstrip. Avista is confident that waiting for the legislative process to complete will
provide the best direction to identify specific resource requirements to meet the Company's future
load requirements, and is preferable to speculating with'owhat if'scenarios.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION: IDAHO
CASE NO: AVU-E-19-01
REQUESTER: StaffTYPE: Production Request
REQUEST NO.: Staff-008
DATE PREPARED: 03/15/2019WITNESS: N/A
RESPONDER: Collins Sprague
DEPARTMENT: Government Relations
TELEPHONE: (s09) 495-2525
REQUEST:
Please provide the dates by which the Company will know if the legislation is enacted for all the
proposals mentioned in the petition for extension.
RESPONSE:
Avista cannot predict with any precision when legislation in any particular jurisdiction may be
enacted. To endeavor to do so would be an exercise in speculation. All that is certain are the
Constitutional dates for legislatures to adjourn sine die. The bills to which this inquiry refers are
being considered in the legislatures of Washington, Montana and Oregon. Washington's
legislature will adjourn on April 28,2019. Montana's legislature is scheduled to adjourn on May
1,2019. Oregon's legislature will adjourn on June 30,2019. It's always possible that any of these
jurisdictions could convene in special session at any time following their regular session.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-19-01
Staff
Production Request
Staff-009
DATE PREPARED: 0311512019
WITNESS: N/A
RESPONDER: Collins Sprague
DEPARTMENT: Government Relations
TELEPHONE: (509) 49s-2s2s
REQUEST:
What is the projected likelihood that the legislation in Washington passes? Please explain by
providing an assessment of the interests and the strength of those interests for and against the
legislation.
RESPONSE:
Avista can provide the current status of legislation and some context for it, based upon what the
Company knows about it today from public records. However, because circumstances beyond our
control and perhaps even outside of our knowledge can affect the prospects of enactment for
legislation, we cannot and should not attempt to predict whether or not any piece of legislation will
pass. Also, note that by the time this response has been submitted, it is very likely that the status of
legislation has changed.
In Washington:
o SB 5116, introduced on behalf of Governor Inslee, has passed the State Senate. As of this
writing, it has been scheduled for a hearing in the House Environment and Energy
Committee. This version of the bill has no recorded opposition of note, although it is
commonly known that a multitude of stakeholders continue to have particular interests in
amending the legislation.
o HB 1 I 13 has been reported from the House Environment and Energy Committee and has
been referred to the House Appropriations Committee. This bill proposes to align the
State's greenhouse gas emission targets with other states and is, thus, indirectly linked to
other measures relating to reducing greenhouse gas emissions that have been introduced.
The bill is supported by the Inslee administration and environmental groups. No parties
testifi ed in opposition.o HB l1l0 has advanced to the House Rules Committee. It is supported by the Inslee
administration, environmental groups, and other public agencies. It is opposed by
petroleum companies and business associations.
o Avista has been informed that legislation authorizing cap and trade legislation will be
introduced in the State Senate. While conceptual drafts have been publicly disseminated,
we do not know what form the text of the potential legislation will assume. Moreover, since
the legislation has not been introduced, it has not been the topic of a public hearing;
therefore, we cannot give an accounting of who its supporters or opponents may or may not
be. It should be noted that the bill will be introduced near the Legislature's house of origin
cut-off. Assuming it will contain provisions relating to State revenue, it could be
designated as "necessary to implement" the State Operating Budget and therefore exempt
from the Legislature's cut-off resolution.
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In Montana:
o HB 203 was tabled in the House Energy Committee on February 6,2019. Because it might
affect State finances, procedural motions could be brought to relieve the Committee of the
bill to advance it to the floor of the House.
In Oregon:
o HB 2020 is still before the Joint Legislative Carbon Reduction Committee. The measure
has been the subject of extraordinary public hearings held throughout the state. It is being
supported by the state's electric utilities, is opposed by business and manufacturing
associations, and has had "concerns" expressed about it by natural gas utilities,
environmental groups, and social justice organizations.
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