20210726Avista to Staff 1-8.pdf

AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/15/2021 CASE NO: AVU-E-21-04 WITNESS: Clint Kalich REQUESTER: Staff RESPONDER: James Gall TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-001 TELEPHONE: [phone] REQUEST: Table 1.1 in the 202l Electric IRP shows the Preferred Resource Strategy ("PRS") exiting Colstrip
in 2021. Please respond to the following: a) Please explain why exiting Colstrip in 202l was included in the PRS when the Company has not shown that retiring Colstrip in that time frame is a possibility.

b) Please explain how including an earlier exit date for Colstrip in the PRS impacts the portfolio cost and resource selections. RESPONSE:

a) The year 2021 is when the IRP’s PRiSM model identified for Colstrip to best retire from an economic point of view. Unfortunately, Table 1.1 should have been updated to reflect the TBD exit date for Colstrip shown in Table 11.1 because Avista does not currently have plans to either retire the plant or to exit the facility.
b) Avista conducted three portfolio scenarios to address this question in Chapter 12 (portfolios 15, 16, and 17). In each of these scenarios, the total portfolio cost of retaining Colstrip longer than 2021 showed modest cost increases over the PRS, see Table 12.22.
Although it is worth noting the cost impacts compared to retiring the resource now versus a
later time will change as certain costs change from avoided future costs to sunk costs. Further, Avista shows in the risk analysis starting on page 12-39 that power costs are subject to greater variation without Colstrip absent a carbon tax or cap and trade.
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2021July 21, PM 3:08
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AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/15/2021 CASE NO: AVU-E-21-04 WITNESS: Clint Kalich REQUESTER: Staff RESPONDER: James Gall TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-002 TELEPHONE: [phone] REQUEST:
The 202l Electric IRP, page 2-18, states, "Loads and resources are divided using the Production-Transportation (PT) ratio and resources must be selected to meet individual state requirements." Please respond to the following:
a) Why it is appropriate to allocate based on the PT ratio for each of the following attributes:
(l) individual state loads; (2) individual state resources; (3) individual state costs; (4) individual state benefits; and (5) any other attributes that use the PT ratio in the 2021 IRP. b) What other ratios or methods besides the PT ratio has the Company considered to allocate
load and resource requirements, costs, benefits, and other attributes?
c) Are there any advantages and disadvantages for using these other ratios or methodologies in accurately determining resource requirements in the IRP. RESPONSE: a) The current state allocation methodology uses the PT ratio for generation and cost allocation, and it is based on the breakdown of load between states. Given this historically
accepted method allocates current costs between states, it was used to model future costs to
understand the impacts of state policies of only existing resources. b) Avista is developing a multi-jurisdictional workshop to discuss and consider alternative methods to allocate costs and benefits of resources between Idaho and Washington. This
workshop will include the IPUC Staff, WUTC Staff, and any other interested parties. Avista expects one option is to allocate all or a different portion of certain existing and future resources to specific states based on the need driving the acquisition of each of these future resources.
c) The goal of the workshop will be to consider the benefits, costs, and risks of different methodologies and address any other areas of stakeholder concern. Depending on the final methodology, there may be concerns of measuring individual state load, ancillary services, transmission, and variable generation integration costs.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/15/2021 CASE NO: AVU-E-21-04 WITNESS: Clint Kalich REQUESTER: Staff RESPONDER: James Gall TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-003 TELEPHONE: [phone] REQUEST:
Page 7-2 of the Company's 2021 Electric IRP describes the difference between the E3 method and the Company's method for determining reserves. Please provide a comparison of the different components of reserves for the two methods using year 2025 winter and summer as shown in Figure 7.1 as an example.
RESPONSE: The E3 method described in the IRP was a preliminary market design for the regional resource adequacy program and is subject to change. Below are the assumed differences between Avista’s
method and the example Resource Adequacy methodology. Portfolio 10 estimates the load and
resource (L&R) position of this scenario and a complete L&R of this scenario is available on the Avista IRP website as part of the published PRiSM models. Item Avista Method Resource Adequacy E3 Example
* Frequency Response Reserve
** Effective Load Carrying Capability
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/15/2021 CASE NO: AVU-E-21-04 WITNESS: Clint Kalich REQUESTER: Staff RESPONDER: James Gall TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-004C TELEPHONE: [phone] REQUEST: Please provide a copy of the E3 study documenting the method and results for the amount of
reserves referenced on page 7.2 of the Company's 2021 IRP. RESPONSE:
Please note that the attached document contains TRADE SECRET, PROPRIETARY or CONFIDENTIAL information and is separately filed under IDAPA 31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code. Please refer to Staff_PR_004C Confidential Attachment A - NWPP RA Program E3
Report_Draft_200609.pdf outlining the E3 study used to create the planning reserves for the
resource adequacy program conceptual design in 2020.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/15/2021 CASE NO: AVU-E-21-04 WITNESS: Clint Kalich REQUESTER: Staff RESPONDER: James Gall TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-004 TELEPHONE: [phone] REQUEST: Please provide a copy of the E3 study documenting the method and results for the amount of
reserves referenced on page 7.2 of the Company's 2021 IRP. RESPONSE: Please see Avista's response 004C, which contains TRADE SECRET, PROPRIETARY or CONFIDENTIAL information and exempt from public view and is separately filed under IDAPA 31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code. Please refer to Staff_PR_004C Confidential Attachment A - NWPP RA Program E3
Report_Draft_200609.pdf outlining the E3 study used to create the planning reserves for the
resource adequacy program conceptual design in 2020.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/15/2021 CASE NO: AVU-E-21-04 WITNESS: Clint Kalich REQUESTER: Staff RESPONDER: James Gall TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-005 TELEPHONE: [phone] REQUEST: Page 7-7 of the Company's 2021 Electric IRP states that the Loss Of Load Probability analysis
assumes the Company could acquire up to 500 Megawatts ("MW") from the market in non-regionally stressed hours and 330 MW in regionally stressed hours recognizing that the market is not unlimited. Please explain:
a) How the Company determined that 500 MW is reasonable during non-regionally stressed
hours. Please include any evidence that supports this assumption. b) How the Company determined that 330 MW is reasonable during regionally stressed hours. Please include any evidence that supports this assumption.

c) Why the Company increased this amount from 250 MW in previous IRPs to 330 MW. Please include any evidence that supports this assumption. RESPONSE:
a) Avista does not see a purchase power constraint based on discussions with our system operators in non-constrained hours, but 500 MW was chosen as a discretionary constraint that would allow the model to reasonably solve without load curtailments. This amount
does not change the Loss of Load Probability (LOLP) results significantly because LOLP
events occur during constrained periods. b) The 330 MW level was determined as the level necessary during regionally stressed hours to maintain a 5 percent LOLP with a 16 percent planning margin.
c) The 330 MW level was defined using the same methodology resulting in a 250 MW threshold in previous IRPs. The increase was driven by 1) load profile changes and 2) reduced resource capacity contributions based on new analyses and data.
Avista has concerns with market reliance assumptions in its IRP given the current state of the wholesale marketplace and the cost impacts of reducing market reliance (through a higher planning margin leading to more resource acquisition) from historical levels. Given this, we have not determined whether our reliance is too high or too low on a long-term basis. Presently Avista is participating in the Northwest resource adequacy program effort and expects to set future
reliance based on its requirements.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/15/2021 CASE NO: AVU-E-21-04 WITNESS: Clint Kalich REQUESTER: Staff RESPONDER: James Gall TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-006 TELEPHONE: [phone] REQUEST: In the 2021 Electric IRP, page 7-7, states, "Avista revised its market reliance in this IRP up to 330
MW from 250 MW used in the previous IRPs. The change is informed by regional work discussed in other parts of this report indicating that higher market reliance is possible under a regional capacity planning effort." Please respond to the following:
a) What are the necessary and sufficient set of milestones included in the implementation
timeline of the regional capacity planning effort that will provide increased market reliance to the Company? b) When will the regional capacity planning effort provide increased market reliance?

c) How the price of the additional 80 MW of market reliance is determined? d) Has the Company in the last ten years had market constraints that prevented the Company from purchasing more than 250 MW from the market?
RESPONSE: a) A fully operational Resource Adequacy Program (RA), as being designed and developed
by the Northwest Power Pool, will satisfy Avista’s concerns regarding long term market
availability during peak events and would allow Avista to potentially use regional planning metrics for capacity planning requirements. The NWPP RA participants are planning to conduct a one-year non-binding trial of the proposed program beginning in March of 2022. The plan is to transition to a full binding program in March of 2023.
b) The regional capacity planning effort will only provide safely increased levels of market reliance if all utilities participate in the program and meet the capacity targets while also willingly selling excess resources when others are short. The RA program, as designed by the NWPP, will incent new capacity by short utilities by instituting a non-compliance
penalty. Further, the RA program will be limited to a specific reliability target as agreed to in the RA program design. Avista or any of its regulators may require the achievement of a more stringent reliability target. c) The additional 80 MW of market reliance is not priced, as the ARAM model is concerned
only with reliability and not economics. d) Avista has been able to acquire at least 250 MW from the market between real-time and pre-schedule. The real-time market’s liquidity is declining, and traders have indicated that
at times 250 MW cannot be purchased. As for preschedule, the Company has been able to
acquire more than 250 MW and relies on this market to acquire the bulk energy needed for the next trading day, thereby limiting exposure during real-time.

AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/15/2021 CASE NO: AVU-E-21-04 WITNESS: Clint Kalich REQUESTER: Staff RESPONDER: James Gall TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-007 TELEPHONE: [phone] REQUEST: Please provide workpapers supporting Figure 7.1 on page 7-3 of the 2021 Electric IRP.
RESPONSE: Please refer to Staff_PR_007-Attachment A.xlsx for a copy of the workpapers supporting Figure
7.1 of the 2021 Electric IRP.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/15/2021 CASE NO: AVU-E-21-04 WITNESS: Clint Kalich REQUESTER: Staff RESPONDER: James Gall TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-008 TELEPHONE: [phone] REQUEST: Please provide workpapers supporting Figure 7.5 on page 7-6 of the 2021 Electric IRP.
RESPONSE: Please refer to Staff_PR_008 Attachment A - “1_PRiSM_7.0_GUROBI_120720_IRP_PRS.xls”
and tab “LR” for the state level load and resource balance used in Figure 7.5.