20210823Avista to Clearwater 1-6.pdf

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
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ii.:l0f,iruRISDICTION: IDAHO
CASE NO: AVU-E-21-09
REQUESTER: Clearwater PaperTYPE: Production Request
REQUEST NO.: CP-001
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DATE PREPARED: OBllSl2O2l : i" ;
WITNESS: Kaylene Schultz
RESPONDER: Paul Kimball
DEPARTMENT: Regulatory Affairs
TELEPHONE: (s09) 49s-4584
REQUEST:
Please provide copies of all of the compan/s responses to data requests from the IPUC Staff (or
any other party) in this matter. Please include responses to informal as well as formal requests and
oral as well as written requests.
RESPONSE:
Avista will continue to provide copies of all data requests, along with corresponding data
responses, from all parties to this proceeding as they are received.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION: IDAHO
CASE NO: AW-E-21-09
REQUESTER: Clearwater PaperTYPE: Production Request
REQUEST NO.: CP-002
DATE PREPARED: 0811912021WITNESS: Annette Brandon
RESPONDER: Annette Brandon
DEPARTMENT: Power Supply
TELEPHoNE: [phone]
REQUEST:
Company witness Annette Brandon on pages 10 and I t of her Direct Testimony states;
Lower natural gas prices and increased revenue from natural gas-fired generation
resulted in the largest increase ($4.27 million) of any of the items when compared to
authorized. Coyote Springs 2 was down from March - June 2021 in order to replace the
three-phase transformer that suffered a failure in 2018. This longer maintenance period
was required to reconfigure the generating station from one three-phase transformer to
three single-phase transformers. This longer than normal maintenance period was not
considered in the initial power supply authorized. ln total, natural gas-fired plants
generated 64 aMW less than authorized, resulting in $4.3 million (Idaho allocation) of
increased power supply expense at the Mid-Columbia ("Mid-C") electricity hading hub
to replace the lower than normal level of natural gas generation.
Please provide the work papers used to calculate the$4.27 million increase, including the input
assumptions including ('Mid-C' prices, natural gas prices, normal maintenance period, etc.).
Please also include the normal maintenance period and the reason why three single-phase
transformers were needed to replace the three-phase transformer.
RESPONSE:
Company workpapers labeled "June 2020 to Jttly 2021Variance Analysis" provide support for
the $4.27 million variance for natural-gas fired generation. The tab labeled "Detail", cells
X79:A179 and AP79:8A79 contains the average Heavy Load and Light Load prices,
respectively, for each month. Please see CP_PR_002 Attaclwrent A for a copy of the monthly
Thermal Fuel summary utilized to record fuel expense.
Annual maintenance occurs typically during the Spring and allows the facility time to repair,
modifu, or perform preventive maintenance on equipment. The time planned to complete this
work is typically 16 days to 30 days, depending on the year and the amount of work that is
planned or required. In order to account for the maintenance period, which may differ
year-to-year, the Company's authorized is based on a five-year outage rate which was approved
in AW-E-19-04.
Please see CP_PR_002 Attachment B for the CS2 Single Phase Transformer Business Case
related to the transformer change-out at Coyote Springs II. The Business Case provides
justification for the use of three single-phase transfoflners.
CS2 Srngle Phase Transformer
EXECUTIVE SUMMARY
Avista has experienced multiple catastrophic GSU transformer failures since the plant's
construction in the early 2000's. The purpose of this project is to replace the currently in-service
transformer,"T4", which exhibited unacceptably high gassing levels after only being in service a
couple of months following the failure of it's twin that failed after approximately nine years of
service "T3". Coyote Springs serves Washington and Idaho electic customers. After a detailed
financial analysis was performed, the recommended solution is to replace the existing three-phase
dual-wound transformer,T4, with three single phase dual-wound transformers. As of the June
2020 (version3.2) update to this Business Case, the estimated cost is expected to be $21,400,000
which includes replacement of T4 as well as the purchase of a spare unit.
The financial analysis included a calculation of Customer Intemal Rate of Return as compared to
all possible alternative options. The CIRR of the proposed solution was the highest. Subjectively
stated, this project will result in higher reliability and reduced power supply expense. The timeline
is critical glven the current gassing state of T4. The risk of not approving this business case is the
likely failure of T4 with a corresponding outage of 18-24 months.
VERSION HISTORY
GENERAL INFORMATION
Version Author Descriotion Date Notes
1.0 Mike Mecham lnltial draft of oisinal business case 6.25.19 Sioned/approved
2.0 Thomas Dempsey Uodated Budoet 9.19.19
3.0 Thomas Demosev Updated Budoet 12.23.19
3.1 kra Heatherly Conversion to newfomat 6.20.20 lncludcs budoet uodate
3.2 Thomas Dempsev Final Updates to new format 7/7n020
Requested Spend Amount $21,400,000
Requested Spend Time Period 2 years
Req uesting Organ ization/Department GPSS
Business GaseOwner I Sponsor Thomas Dempsey I Andy Vickers
Sponsor Organization/Department GPSS
Phase Execution
Category Project
Driver Failed Plant & Operations
Business Case J ustifi cation Nanative
CP_PR_002 Attachment B
Page 1 of 10
Page 1 of 10
CS2 Single Phase Transformer
1. BUSINESS PROBLEM
1.1 What is the current or potential problem that is being addressed?
Coyote Springs 2 currently uses a single three phase transformer (GSU) configuration for power
transformation to the BPA electric grid. Subsequent initial GSU energization in 2002, we have
experienced seven GSU failures. ln 2018, a spare transformer (T4) was placed in service subsequent
the failure of Transformer 3 (T3). After being in service for one month, T4 saw a spike in combustible
gases. Gases are now being closely monitored and the transformer is currently limited to 90%
capacity.
The Business Problem is that we now have an underperforming transformer that is not at full capacity
and which is exhibiting troubling gassing behavior. We consider the risk of failure to be significantly
higher than acceptable. We also have no spare at this time- a failure without a spare could lead to
an 18 month or longer outage.
The table below is an overview of the historical failures of the 4 three-phase transformers purchased
and installed at Coyote Springs 2 since construction:
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1.2 Discuss the major drivers of the business case and the benefits to the
customer
Failed Plant Conditions: one of the primary drivers to our selection of this prefened alternative is the
likelihood of the risk exposure that remains with an "in kind" three-phase replacement. !t is in Avista's
best interested to spend these resources on a more reliable solution.
Business Case Justification Nanative
CP_PR_002 Attachment B
Page 2 of 10
Page 2 of 10
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cs2 Phase Transformer
1.3 ldentify why this work is needed now and what risks there are if not
approved or is deferred
This work is needed immediately given the condition of the existing transformer and the lack
of a reliable spare. lf the existing transformer fails now we would expect to see an 18-24
month outage with its associated power supply expense implications. See business problem
details in Section 1.1 and additional data and analysis details provided in Section 2.1.
1.4 ldentify any measures that can be used to determine whether the
investment would successfully deliver on the objectives and address the
need listed above.
Power Output- After the project is complete, the operating limit of the plant will be
increased to 320 MW- This is an immediate increase and an appropriate objective
measure.
a
. Gassing Levels- The new transformers will be outfitted with Serveron Gas
Monitoring equipment to ensure that we are not experiencing interal hot spots or
arcing that could lead to catastrophic failure.
o Reliabilty- We expect the new transformers to provide reliable service immediately
and into the future, therefore equipment availability is the third such measure that
can be used to determine if the investment has met the stated objectives.
1.5 Supplemental lnformation
1.5.1 Please reference and summarize any studies that support the problem
Please see the appendices listed under Section 2.1
1.5.2 For asset replacement, include graphical or narrative representation of metrics
associated with the current condition of the asset that is proposed for
replacement.
This project provides for replacement of the failed T3 as well as the currently
operating but gassing T4. T3 failed catastrophically due to an internal fault. See
Figure 1 below that clearly shows internal arcing damage. T4, which is of nearly
identical construction as T3, is currently gassing at dangerous levels. lf left
unchecked, we expect the gasses could reach explosive levels within a two year
period. We are carefully monitoring gassing levels to make sure they do not reach
these explosive limits during the period of time we are waiting to install the new
single phase units. Figure 2 shows the gassing levels currently being seen in T4.
ln June 2019 we performed a "dialysis" of sorts as a mitigative measure to prevent
the dissolved gasses from reaching an explosive level until such time as the
transformer can be replaced.
Figure 1- T3 Static Shield Ring Catastrophic lnternal Damage
Business Case Justification Nanative
CP_PR_002 Attachment B
Page 3 of 10
Page 3 of 10
CS2 Single Phase Transformer
Figure 2- T4 Gassing Trend
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1.6 Describe what metrics, data, analysis or information was considered when
preparing this capital request.
Avista has experienced multiple failures of GSU transformers in service at Coyote Springs despite
proper operations and maintenance activities.
The new transformers will collectively be higher in capacity than the prior transformers at
Coyote to provide a higher safety margin and also to allow for technology improvements
(which historically have been typical) that allow for higher output at higher efficiency.
The three phase transformers have proven to be very expensive and difficult to move due to
their size and weight. ln an email exchange with BPA where Avista asked about use of three
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Business Case Justification Nanative
CP_PR_002 Attachment B
Page 4 of 10
Page 4 of 10
a
cs2 Phase Transformer
phase transformers in this application, BPA indicated they would not use transformers of this
size due to transportation difficulty.
Changing to a single phase design versus keeping the existing three phase configuration will
be challenging- but given the large number of failures Avista believes it is prudent to abandon
the existing configuration. To that end, the financial analysis assumptions regarding three
phase transformer reliability reflect Avista's experience at Coyote Springs 2.
The difficulty and enormous complexity of mobilization associated with the three phase
solution results in longer duration outages than those associated with individual single phase
transformers.
Avista and its expert consultants determined that manufacturing defects were the likely culprit
with respect to the failures of T1 and T2. The failure mechanism for T3 is currently being
evaluated. T4 is in service, however it is gassing at dangerous levels. Avista cannot rule out
a fundamental application flaw associated with what Siemens and others have described as a
somewhat "unusual" configuration. lt is possible that this dual low voltage with 5001(/ high
side configuration approach has as yet-to-be determined fundamentalflaws. Avista can no
longer rule out this possibility given the number of failures we have experienced. PGE, with
its single phase transformers is interconnected with the grid at a virtually identical location as
unit 2, and they have experienced no failures in 20+ years of operation.
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Additional detail and project background can be found in the associate documents:
o Appendixl20191223 Power Supply Asset Management Consolidated Financial Analysis. Appendix ll David Nichols Engineering Recommendationo Appendix lll Avista-CoyoteSpgs-GSU-Replcmt-Concept-Report_Final_Rpt-w-ATT rev.pdfo AppendixlY 20191223 Decision Tree Narrativeo Appendix V 20200513 New FinancialAnalysis of T5 Project.docx
1.7 Discuss how the requested capital cost amount will be spent in the current
year (or future years if a multi-year or ongoing initiative). (i.e. what are the
expected functions, processes or deliverables that will result from the capital spend?). lnclude
any known or estimated reductions to O&M as a result of this investment.
ln accordance with the detailed project schedule, annual projected capital expenditures for
remaining scope are as identified in the S-year CPG budget:
. 2020 - $9,900,000
o 2021 - $11,500,000
With respect to O&M reduction, the primary reduction to customer expense is the reduction in
power supply expense. The financial analysis includes such risk modified expenses, The
financial analysis is included as Appendix l.
Business Case Justilication Nanative
CP_PR_002 Attachment B
Page 5 of 10
Page 5 of 10
CS2 Srng/e Phase Transformer
1.8 Outline any business functions and processes that may be impacted (and
how) by the business case for it to be successfully implemented.
This project requires internal and external resources for it to be completed successfully.
1.9 Discuss the alternatives that were considered and any tangible risks and
mitigation strategies for each alternative.
Note: The following table of results and the associated explanations represent the initial results
from the initial study associated with this project. These numbers were based on our best
estimates at the time. As we have gotten further into the project, costs have increased
due a number of reasons, including increased fire protection requirements and firm bids
from suppliers that were higher than initially projected by Avista's Consulting Engineer.
The options were subsequently reviewed and Option V remains the best choice for
customers. A summary of the new analysis performed may be found in this document:
20200513 New FinancialAnalysis of T5 Project.docx.
Options l- Eliminated due to high power supply risk and relatively lower IRR than the preferred
option.
Option ll- Eliminated due to high power supply risk and relatively lower IRR than the preferred option
Option ll!- Eliminated because Option lV provides superior reliability at lower cost and lacks the
opportunity for a double redundant emergency spare. This option also has a relatively lower IRR
than the preferred option.
Option lV- Siemens-Austria provided an indicative price for two new 3-phase units at a delivered
and commissioned at price of about $9.2 million (Option lV). After other site costs, Avista
engineering, and other costs are considered, the price estimate is $13.1 million. Furthermore, Avista
expects that a choice to begin a new procurement process and a path towards a 3-phase solution
would cause significant power supply risk for the summer of 2021. These considerations point further
towards Option V as the best solution. Option lV eliminated because even though this option
provides the potential for a double redundant emergency spare, it still utilizes the 3-phase dual wound
design that has proven unreliable at Coyote Springs in this configuration. This option also has a
relatively lower IRR than the preferred option.
Business Case Justification Narrative
CP_PR_002 Attachment B
Page 6 of 10
Page 6 of 10
Option Capital
Cost
NPV of Net
flant
Margin
Relative
GIRR
Start Complete
I. Repair T3, no repair of T4 $6.2 Million $209.0
Million
4.Oo/o 101201I 612020
II.Purchase one (l) new 3-
phase, no repair ofT4 $8.0 Million $206.5
Million
5.8%101201I 1212020
u.Purchase one (l) new 3-
phase, Repair T3
$13.7 Million $206.3
Million
5.Bo/o 101201
9
612022
IV Purchase two (2) new 3-
phase units $13.1 Million $207.2
Million
6.2%912019 1212020
v Purchase four (4) single-
phase transformers
(includes spare)
$1s.1
Million
$213.9
Million
9.4%9/2019 612021
CS2 Single Phase Transformer
Option V- Option 5 is the preferred option as it has the highest relative IRR of any of the options.
This option uses single phase transformers that are smaller and much easier to transport. This is
the same configuration that is used on Unit 1 which have proven highly reliable over time. This option
also allows for a double redundant emergency backup using T4 (this would require iso-phase bus
reconfiguration and would only be used if single phase lead times dictated the need).
Siemens-Austria and SM|T-Netherlands were the finalists for Option V. David Nichols and Rob Selby
from Avista as well as Avista's expert consultant Pierre Feghali visited both factories. \A/trile both
appeared to be of high quality, Siemens-Austria stood out as a top of class facility with extensive
quality control mechanisms in place. lt is therefore the factory of choice the transformer supply costs
are referenced to.
RECOMMENDATION: Purchase and install four (4) single phase transformers and all supporting
equipment (coolers, fans, instrumentation, bushings). lncluded in the request is all of the design
engineering, all equipment modification including containments, fire suppression, electrical
protection, isophase bus, and all supporting equipment.
1.10 lnclude a timeline of when this work will be started and completed.
Describe when the investments become used and useful to the customer.
spend, and transfers to plant by year.
Project planning and design activities began in 2019. ln order to minimize outage activities during
critical operations windows, the project execution plan will include a two-phased outage during the
Spring/Summer of 2020 and2021.
The 2020 outage will consist of early civil/structural foundation work for the T5A and C locations and
T5A, B, and C containment where possible.
The 2021 outage will include all civil/structural activities that require T4 to be out of service and
relocated, as well as all other activities (including but not limited to): placement of new transformers,
installation of lsoPhase Bus, new deluge system piping, and High Voltage Bus.
Project is expected to be completed and Coyote Springs Unit 2 back online by the end of June 2021.
Page 7 of 10
Page 7 of 10
Business Case Justification Nanative
CP_PR_002 Attachment B
CS2 Single Phase Transformer
1.11 Discuss how the proposed investment aligns with strategic vision,
goals, objectives and mission statement of the organization.
Mission: This project safely, responsibility and affordably improves the level of service we
provide to our customers. This project does so by:
. Minimizing our exposure to unnecessary breaks in service
o Avoiding inflated power purchase prices and subsequent increased costs to our
customers
o Minimizing the risk of potentially catastrophic failure
o Eliminating ongoing operations safety risks, and
o Eliminating unnecessarily escalating operating costs
Strategic lnitiatives: 1. Safe and Reliable lnfastructure, 2. Responsible Resources.
1.12 lnclude why the requested amount above is considered a prudent
investment, providing or attaching any supporting documentation. !n
addition, please explain how the investment prudency will be reviewed
and re-evaluated throughout the project
A number of alternatives were considered. The recommended course of action represents the
highest value of CIRR. See Appendix I and Appendix ll.
With respect to investment prudency review; as of version 3.2 of this business case,the project
budget was increased to $21.4 million. We conducted a thorough review as well as a new
financial analysis to review whether going forward was the best course of action. lt was. A
complete discussion of this process and its results is provided in Appendix V- 20200513 New
Financial Analysis of T5 Project.docx. A summary table exerpt from that document is provided
below:
Options Capital Cost Su / Plant Net Market Value SM
Options Original Analysis Revised Analysis
Option l- Rebuild T3; T4 Spare 6.2/209 Reiected
Option ll- New 3Ph, T4 Spare 81206.s Reiected
Option lll- New 3Ph, Repair T3 L3.71206.3 77.L12O2.s
Option lV- Two new 3Ph L3.L12O7.2 L7.6/2O2.L
Option V- Single Phase ts.Ll2t3.9 21.4/206.6
1.13 Supplementallnformation
1.13.1
case
ldentify customers and stakeholders that interface with the business
There is no customer interface with respect to this project. Key stakeholders
include the Avista Power Supply group as well as GPSS.
Business Case Justifi cation Nanative
CP_PR_002 Attachment B
Page 8 of 10
Page 8 of '10
CS2 Single Phase Transformer
1.13.2 ldentify any related Business Cases
This Business Case represents the new 2020'tormat and thus it replaces the prior
approved Business Case titled, 'BCJN_CS2 Single Phase Transformer_signed 201912".
1.14 Steering Committee orAdvisory Group lnformation
Prior to July 2020, executive level oversight of this project was provided on an as-needed basis by
Power Supply Management, GPSS Management, and Energy Resources Executive Leadership.
lnitial project estimates and project execution frameworks were developed by Avista's consultant
engineer and project manager, Black and Veatch.
Aformal Steering Committee has been established as of July 2020 and will meet on a quarterly basis
over the next year to review project status.
As of March 2020, this project has been assigned an Avista Project Manager responsible for the
management and regular reporting of scope, schedule and budget deviations from the current project
execution plan.
1.15 Provide and discuss the governance processes and people that will
provide oversight
Executive level scope, schedule, & budget oversight is provided by the Steering Committee on a
Quarterly basis. Ongoing senior management is provided by the Manager of Thermal Operations.
Day to day project oversight is provided by the assigned Project Manager.
1.16 How will decision-making, prioritization, and change requests be
documented and monitored
Project decisions will be made at the PM levelwhere appropriate and escalated to the Mananger of
Thermal Operations & Maintenance when and if determined to be necessary by the role definitions
above. Regular updates will be provided to management by the PM team as project scope,
schedule and budget are defined, and throughout the course of the project execution.
The undersigned acknowledge they have reviewed the CS2 Single Phase Transformer Business
Case and agree with the approach it presents. Significant changes to this will be coordinated with
and approved by the undersigned or their designated representatives.
Signature:zffi*CPer-f
Manager, Thermal Operations
Date: 7l1Ol2O20
Print Name
Title:
Role:
Signature:
Print Name
Title:
Role:
Thomas Dempsey
Business Case Owner
711012020
Andy Vickers
Director of GPSS
Business Case Sponsor
Date
Business Case Justification Nanative
CP_PR_002 Attachment B
Page 9 of 10
Page 9 of 10
CS2 Single Phase Transformer
Signature:
Print Name:
Title:
Role:
Date:
Templab Version : 05/282020
Business Case Justification Namative
CP_PR_002Afirdlment B
Page 10 of 10
Page l0 of 10
AVISTA CORPORATION
RESPONSE TO REQUEST FOR TNFORMATTON
JURISDICTION
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AW-E-21-09
Clearwater Paper
Production Request
cP-003
DATE PREPARED:
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
0811712021
Annette Brandon
Annette Brandon
Energy Supply
(s09) 49s-4324
REQUEST:
Company witness Annette Brandon on page 3 of her Direct Testimony states;
As one can imagine, numerous variables affect short-term power supply. As such,
we employ the Energy Resources Risk Policy ("Risk Policy") to recognize and
actively manage the interaction and dynamics among these variables by establishing
processes for future load and obligation estimation, resource estimation, and
managernent of the expected net surplus or deficit short-term position.
Please provide the Energy Resources Risk Policy used by Avista uses to manage it power supply
resources.
RESPONSE:
Please see Avista's response 003C, which contains TRADE SECRET, PROPRIETARY or
CONFIDENTIAL information and exempt from public view and is separately filed under
IDAPA 31.01.01, Rule 067 and233, and Section 9-340D, Idaho Code.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
ruRISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-21-09
Clearwater Paper
Production Request
cP-004
DATE PREPARED: 08117 12021WITNESS: Annette Brandon
RESPONDER: Todd Bryan
DEPARTMENT: Energy SupplyTELEPHoNE: (s09) 49s-4293
REQUEST:
Company witness Annette Brandon on page 6 of her Direct Testimony states;
The Company employs a Power Supply Hedge Requirements Report tool (PSHRR). The
PSHRR is an analytical tool to guide power supply hedging decisions in the short-term
forward period. It provides a process to systernatically reduce open positions with forward
transactions by buying for expected shortages and selling expected shortages. An "open"
position for this purpose is the forecasted monthly financial position that is not covered by
fixed price physical or financial transactions, i.e., the surplus or deficit that is subject to
price risk. The plan provides guidance, but may not be followed rigidly when managernent
judgment or market conditions warrant other actions, no action, or simply a delay in acting.
Please provide Power Supply Hedge Requirernents Report too (PSHRR) used by Avista uses in
its hedging progrirm and the criteria it uses when it deviates from the guidance of the PSHRR .
RESPONSE:
Please refer to CP_PR_003 for a copy of the Company's Energy Resources Risk Policy. Exhibit 2
provides detail on the Power Supply Hedge Requiranents tool (PSHRR) and the mechanics of the
tool. [n addition, as stated on page 17, the Power Supply Hedging Plan (PSHP) provides guidance
but may not be followed rigidly when management judgement or market conditions warrant other
actions, no action, or simply a delay in taking action. The Energy Supply Department continuously
monitors the results of the PSHP, evolving market conditions, variation in demand profiles, and
regulatory conditions. The PSHP allows flexibility and discretion for decision making as market
conditions warrant. Each unique situation that might cause the Company to deviate from the
progftrm would be analyzed on a case-by-case basis.
AVISTA CORPORATION
RESPONSE TO REQUEST F'OR INFORMATION
ruRISDICTION: IDAHO
CASE NO: AW-E-21-09
REQUESTER: Clearwater PaperTYPE: Production Request
REQUEST NO.: CP-005
DATE PREPARED: 0811912021
WITNESS: Kaylene Schultz
RESPONDER: Kaylene Schultz
DEPARTMENT: Regulatory Affairs
TELEPHONE: [phone]
REQUEST:
Company witness Kaylene Schultz on pages 4 and 5 of her Direct Testimony states;
The $446,075 credit for Renewable Energy Credit Retirernent benefits is to credit Idaho
customers for benefits related to the renewable energy credits retired to meet Washington's
renewable portfolio standards. The RECs used to meet Washington RPS are tracked 100%
in the PCA. The credit is based on the Idaho allocation of RECs that were retired to meet
Washington RPS (WA I-937) that would have been otherwise sold.
Please provide the work papers used to calculate $446,075, Renewable Energy Credit Retirernent
benefits including the input assumptions including the volume and prices of the RECs retired.
RESPONSE:
Please refer to CP_PR_005 Attachment A, which contains the workpapers used to calculate the
$446,075 credit of Renewable Energy Credit Retirement benefits, along with the associated Order
from Washington Docket UE-l80478.
Falls Unit 4
:ke Unit 3
abinet Gorge Unit 2
abinet Gorge Unit 3
abinet Gorge Unit 4
>xon Rapids Unit 1
NOXON RAPIDS UNIT 2
rxon RapidsUnit 3
rxon Rapids Unit 4
Iile HED
: Mile HED 2
louse Wind
e Plant - Kettle Falls Woodwaste Plant
e Plant - Kettle Falls 2
F937 qty
4,862
L4,197
29,008
45,808
20,517
21,435
7,7O9
!4,529
72,024
8,804
13,L46
267,305
0
q
459,3M
avg prlce REC ualue
0.00
0.00
0.00
0.00
0.00
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0.00
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0.00
39,618.00
59,157.00
L,202,872.50
0.00
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L,3Ot,647.SO
4.50
4.50
4.50
notes
price = 50/50 blend ofCEC-l ($8) & CEC-3 (Sl)
" ; all 257,305 used for 2018 WA RPS filing
,'
0.3427
M,O74.90tu
rlJournals\REC Deferral\REC Calculations\2O2O\ldaho JE 2018 for l-937-SReid-WA l-937Sheet1
Page I of6
BEFORE THE WASHINGTON
UTILITIES AND TRANSPORTATION COMMISSION
In the Matter of
AVISTA CORPORATION'S
Renewable Energy Target Progress
Report under RCW 19.285.070 and WAC
480-109-210
DOCKET UE-l80478
ORDER 01
ORDER APPROVING
COMPLIANCE WITH ELIGIBLE
RENEWABLE ENERGY TARGET
REPORTING REQUIREMENTS
FOR 2018
*
I
BACKGROUND
The Energy Independence Act (EIA or Act)r requires qualiffing electric utilities to obtain
certain percentages of their electricity from eligible renewable resources. The
Washington Utilities and Transportation Commission (Commission) enforces compliance
with the EIA by investor-owned utilities.2 Ultimately, the Commission must determine
"whether the utility has generated, acquired or arranged to acquire enough renewable
energy credits or qualifuing generation to comply with its renewable resource target."3
The Commission has implemented these requirements by establishing a two-step
compliance process.a Because a utility may comply with its renewable portfolio standards
(RPS) obligation by using RECs acquired in the year after the target year, ultimate
compliance for 2018, for example, may be demonstrated as late as June 1,2020.
Accordingly, there will be two Commission decisions for each year's compliance: (l) a
determination that the Company has enough resources to meet the nine percent target;
and(2) the retrospective compliance decision. Before the Commission is the initial
resource-adequacy filing made by Avista Corporation (Avista or Company) for its 2018
obligation. The Commission will consider Avista's compliance with its 2018 target when
Avista requests such a finding, which the Company must do through a filing in this
docket no later than June 1,2020.
tRCW Chapter 19.285.
2 RCw 19.28s.060(6).
3 wAC 480-109-2ro(3xb).
4 wAC 480-109-210(l) and (6).
2
CP_PR_005 Attachment A Page 2 of 6
3 On May 31,2018, Avista filed with the Commission its 2018 RPS Report, which
identified a 2018 target of 512,805 megawatt-hours (MWh). Table 1, below, summarizes
Avista's 2018 target and the total amount of resources that the Company had acquired by
January 1,2018:
Table 1: Avista's 2017 Renewable Resource Target and Compliance
Avista reported its actual incrernental cost for the 2018 compliance plan as -$3,238,595,
or -0.6 percent of revenue requirement.6
Avista seeks an order from the Commission confirming that the Company has complied
with the Commission's EIA reporting requirements and accepting the Company's
calculations and eligibility of the renewable resources identified in the RPS Report for
2018.
On June 7,2018, the Commission issued a Notice inviting interested persons to file
written comments on Avista's RPS Report. During the comment period, the Commission
received written comments from Commission staff(Staff) and joint written comments
from Renewable Northwest and Northwest Energy Coalition (RNWATWEC).
RNWNIWEC commended the Company for meeting its RPS target without relying on
alternative compliance methods. Similar to joint comments filed in 2017,the
organizations expressed concerns about transparency related to Avista's incremental cost
assumptions.T Avista filed supplementary information regarding the incremental cost
calculations, but the data remains part of its confidential filing. RNWAIWEC note this
concem, but overall are pleased that the Company met its target, and recommend that the
commission approve the report.
Based on the information that the Company provided in its RPS Report and supplemental
filing, Staffbelieves that Avista correctly calculated its 2018 RPS target, and that it has
acquired sufficient resources to meet that target. Although Commission rules require the
5 Avista has no excess Renewable Energy Credits (RECs) from 2017 that could be used toward its
2018 target.
6 wAC 480-109-2 I o(2Xa).
7 Docket UB-160779.
PlulnIJll
4
J
6
7
2018 Target
(Mwh)
Incremental
Hydro (MWh)
2017
RECs
2018
RECs
Purchased
RECs
Total Resources
(Mwh)
512,805 192,039 gs 458,596 N/A 650,635
CP_PR_005 AttachmentA Page 3 of 6
8
Company to document its use ofrenewable resources under various renewable energy
programs in its annual report, Staffrequests the Commission require Avista to include
that information in its final compliance report, which will allow Staffto determine
whether its resources meet EIA requirements.
Staffrecommends that the Commission issue an order in this docket determining that: (1)
the 2018 renewable energy target for Avista is 512,805 MWh; (2) Avista has
demonstrated that, by January 1, 2018, the Company acquired at least 512,805 MWh of
eligible renewable resources, equivalent RECs, or a combination of the two, sufEcient to
supply at least 9 percent of its load for 2018; (3) Avista has complied with the June l,
2018, reporting requirements pursuant to WAC 480-109-210; (4) in its final compliance
report for 2018 required by WAC 480-109-210(6), Avista must provide details about
which certificates were used for its various renewable energy programs.
DISCUSSION
The Commission accepts Avista's calculation of 512,805 megawatt-hours as the
Company's renewable energy target for 2018 and determines that Avista has identified
sufEcient resources to be able to meet that target. The Commission will make its final
determination about whether Avista has met its 2018 target when the Company requests
such a finding, no later than June 1,2020. To assist Staffwith determining whether
Avista's resources meet EIA eligibility requirements, Avista must provide details about
which certificates were used for its various renewable energy programs, as required by
WAC 480-109-210(2xd)(i), in its final compliance report for 2018.
FINDINGS AND CONCLUSIONS
(l) The Commission is an agency of the state of Washington vested by statute with the
authority to regulate the rates, regulations, practices, and accounts ofpublic service
companies, including electric companies.
(2) Avista is an electrical company and a public service company subject to
Commission jurisdiction.
(3) Avista serves more than 25,000 customers within the State of Washington and is a
"qualiffing utility" within the meaning of RCW 19.285.030(18).
(4) Avista has properly calculated its renewable energy target for 2018 to be 512,805
megawatt-hours.
9
t0
11
I2
r3
CP_PR_005 Attachment A Page 4 of 6
14
15
16
t7
t8
(5) By January 1,2018, Avista had acquired suffrcient eligible renewable resources to
supply at least 9 percent of its load for the remainder of 2018.
(6) Avista has met the reporting requirements of RCW 19.285.070 and WAC
480-109-210. These reporting requirements include Avista's plan for meeting its
RPS obligation for the remainder of 2018.
(7) Pursuant to WAC 480-109-210(4), Avista must provide a summary of its RPS
Report to its customers, by bill insert or other suitable method, within 30 days of
the date of this Order.
(8) Pursuant to WAC 480-109-200(3), Avista must register in Western Renewable
Energy Generation Information Systern (WREGIS) all Company-owned
incrernental hydropower facilities on which the Company intends to rely for
compliance with RPS requirements.
(9) Pursuant to WAC 480-109-210(6), Avista must file a report no later than June l,
2020, that lists the certificate numbers in WREGIS the for every megawatt-hour
and renewable energy credit that Avista retired to meet the January 1, 2018,
target.
ORDER
THE COMMISSION ORDERS:
te (l)The Commission accepts the calculation of 512,805 megawatt-hours as the 2018
renewable energy target for Avista Corporation.
2t
20
22
(2) Avista Corporation has identified eligible renewable resources sufficient to supply
at least 9 percent of its load for 2018.
(3) Avista Corporation has complied with the June 1,2018, reporting requirements
pursuant to WAC 480-109-210.
(4) Avista Corporation's final compliance report must list certificate numbers for
every renewable energy credit that Avista Corporation retired in the Western
Renewable Energy Generation Information System and details about which
certificates were used for its voluntary renewable energy programs in 2018.
(5) The Commission Secretary is authorized to accept or approve a filing that
complies with the requirements of this Order.
23
CP_PR_005 Attachment A Page 5 of 6
DATED at Olympia, Washington, and effective August 9, 2018.
WASHINGTON I.MILMES AND TRANSPORTATION COMMISSION
DAVID W. DAI.fNE& Chairman
AIIN E. RENDAHL, Commissioner
JAY M. BALASBAS, Commissioner
CP_PR_005 AtachmentA Page 6 of6
AVISTA CORPORATION
RESPONSE TO REQUEST FOR TNFORMATION
ruRISDICTION
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AW-E-21-09
Clearwater Paper
Production Request
cP-006
DATE PREPARED:,08117 12021WITNESS: Annette Brandon
RESPONDER: Tara Knox
DEPARTMENT: Regulatory Affairs
TELEPHONE: (s09) 49s-432s
REQUEST:
Company witness Annette Brandon on page 6 of her Direct Testimony states;
The PCA includes a load change adjustment to reflect the change in power production and
transmission expense recovered through base retail revenues, related to changes in retail
load. The LCAR calculation is based on the energy classified production and transmission
costs included in the Company's general rate case. The LCAR revenue adjustrnent for July
2020 through June 2021was $22.00/N{Wh.
Please provide the work papers used to calculate LCAR of $22.00/\{Wh, including the input
assumptions of production and transmission costs included in the Company's general rate case.
RESPONSE
Please see the following attachments:o CP_PR_006 Attachment A, which is an electronic copy of the Company's General Rate
Case (GRC) Settlement revenue requironent model in Case No. AVU-E-19-04. The
calculation of the LCAR rate of $0.02200per kWh (or $22.004dwh) may be found on the
blue highlighted tab named "PCA LCAR Calc-2020".o CP_PR_006 Attachment B, which is an electronic copy of the Company's GRC Sefflement
electric cost of service model in Case No. AVU-E-19-04. The summarization of
production and transmission costs by classification at uniform allowed retum may be
found on the tab named "SUMCOST" at rows 630 through 644,ldaho totals in column F.
Total summaized production and transmission costs at uniform allowed return may be
found on the tab named'oSumcost Exhibits" at rows 120 and l22,ldaho totals in column F.o CP_PR_006 Attachment C, which is an electronic copy of certain cost of service
workpapers updated for the Case No. AW-E-19-04 Settlement adjustments. The
Settlement revised test year normalized retail load by month may be found on the tab
named "ID Retail Load".