20230731AVU to Staff 1-7.pdf

AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/17/2023 CASE NO: AVU-E-23-05 WITNESS: James Gall REQUESTER: IPUC RESPONDER: Lori Hermanson TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-001 TELEPHONE: [phone]
REQUEST: In the 2023 Electric IRP, page 4-2, it states, "Avista also is using the WRAP's methodology for
resource capacity accounting, also known as Qualifying Capacity Credit (QCC)." Please respond
to the following: a. Please explain why it is appropriate to use Western Resource Adequacy Program's ("WRAP") QCCs for the Company's resources when the WRAP QCCs are based on regional resources;

b. Please explain how the Company verified that the WRAP QCC values used in the 2023 IRP are equivalent resource capacity values for the Company's system and resources; and c. Please explain how the Company plans to verify that the WRAP QCC values are equivalent to
Company system resource QCC values in future IRPs. RESPONSE: a) For current resources, Avista used QCCs specific to its resources using submitted historical data generated for regional modeling under the WRAP methodology by its administrator, the Southwest Power Pool (SPP). For new resources, SPP estimated generic QCC values.
The process for calculating these values continues to be vetted as additional studies are
completed by SPP but uses historical data of similar resources.

b) Avista provided 10+ years of historical generation data along with other data such as outages. The QCC values calculated for our resources aligned with historical performance of these resources and the regional context of the resource capability during regional peak periods. Avista found the results to be similar to other regional studies conducted including E3’s Resource Adequacy in the Pacific Northwest study in March 2019.

c) Avista plans to use the WRAP’s methodology going forward, so long as the WRAP is
moving toward a future binding program. As stated in the 2023 IRP, Avista chose not to
use current WRAP planning reserve margins (PRM) but did use the program’s QCC values. Avista revised its PRM to make it equivalent to the net result of the previous IRPs. This means Avista revised down the PRM to account for a corresponding resource deduction to resource capacity. In future IRPs where Avista may adopt WRAP QCC values, Avista will
model market dependance studies similar to those discussed in Chapter 9 of the IRP to
ensure market reliance remains feasible given Avista’s transmission connections and risk tolerance. Avista plans to continue to keep the TAC involved in the study results and will discuss with the Committee any concerns with market dependance due to the WRAP.
RECEIVED
Monday, July 31, 2023 2:17:32 PM
IDAHO PUBLIC
UTILITIES COMMISSION
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/17/2023 CASE NO: AVU-E-23-05 WITNESS: James Gall REQUESTER: IPUC RESPONDER: Lori Hermanson TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-002 TELEPHONE: [phone]
REQUEST: In the 2023 Electric IRP, page 4-4, it states, "The Northwest Planning and Conservation Council
(NPCC) is also evaluating the creation of new resource adequacy metrics beyond traditional Loss
of Load Probability Expectation (LOLE)." Please respond to the following: a. Please explain the new resource adequacy metrics the NPCC are evaluating; and
b. Please explain what resource adequacy metrics the Company is considering using in future IRPs. RESPONSE: a) This statement refers to the NPCC’s current resource adequacy work regarding a needs assessment to estimate the gap between the existing resource capability and the resource capability needed to maintain adequacy for 2027. For more information please refer to
Pacific Northwest Power Supply Adequacy Assessment for 2027 (nwcouncil.org). The
Council focuses on four metrics shown in Table 1 from page 12 (see below). Traditional Council planning focused on Loss of Load Probability, focusing on the probability of an outage, whereas their new proposed methodology considers additional indicators including outage duration, size, and lost energy.

b) Avista plans to continue to use the WRAP planning methodology but will not lower its current Planning Reserve Margin (PRM) to the WRAP level until it’s a binding program
that can be counted upon for planning purposes. The Company will continue to evaluate
market reliance using a stochastic approach to evaluate market risk due to weather and resource availability’s effect on the ability of the resource portfolio to meet load. Avista will report resource adequacy metrics from these studies. If the Council’s four metrics gain regional acceptance, Avista will report on these as well. Subject to the results of this study
and future WRAP PRM values, Avista may revisit its resource adequacy metrics.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/17/2023 CASE NO: AVU-E-23-05 WITNESS: James Gall REQUESTER: IPUC RESPONDER: Lori Hermanson TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-003 TELEPHONE: [phone]
REQUEST: Please explain the Company's plan for using the WRAP Planning Reserve Margin ("PRM") as the
Company's PRM in future IRPs. If the Company plans to use the WRAP PRM in future IRPs,
please explain how the Company plans to verify the WRAP PRM is appropriate to use as the Company's PRM in future IRPs. RESPONSE:

The Company intends to use the WRAP’s PRM once the program becomes binding, and participants are subject to penalties for non-performance. Until that point, the Company’s resource planning includes a higher PRM equivalent to prior IRP’s resource adequacy metrics to ensure resource adequacy.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/28/2023 CASE NO: AVU-E-23-05 WITNESS: N/A REQUESTER: IPUC RESPONDER: Vern Malensky TYPE: Production Request DEPARTMENT: Electrical Engineering
REQUEST NO.: Staff-004 TELEPHONE: [phone]
REQUEST: Please provide an update on the status and timeline of AMI meter installs in the Idaho service territory. Please make note of any delays. RESPONSE:
Avista’s Idaho Advanced Metering Refresh project plans to replace existing electric meters whose solution is nearing end of life. There are roughly 140k electric meters across the state that will require replacement. Replacement of the electric meters is scheduled to commence in 2025. Avista's Meter Data Management application and Head End Systems applications will need to be
scaled before the deployment of the new electric meters. This preparatory work will be initiated this year and is expected to continue through 2025.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/17/2023 CASE NO: AVU-E-23-05 WITNESS: James Gall REQUESTER: IPUC RESPONDER: Lori Hermanson TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-005 TELEPHONE: [phone]
REQUEST:
The 2023 Electric IRP at 4-3 states that in the WRAP forward showing program the QCC of
Company's portfolio must be adequate to meet peak demand less demand response ("DR") programs. Later, page 5-16 states that a primary factor in the cost effectiveness of modeled DR programs is the QCC value of the resource in the WRAP. Please answer the following questions related to the Company's DR programs.

a. Please explain if the Company is modeling the value of DR resources as a peak demand reduction or by claiming the QCC of the DR resource; b. Please describe the rational and provide any workpapers or documents supporting the
assumption that a 6-hour load reduction is needed to receive 100% value of the QCC value for a
DR resource; c. For any Idaho DR programs selected by the 2023 IRP, please provide the program's modeled start date and the anticipated QCC for the forecasted years;

d. Please explain how the QCC value for DR programs will be determined and updated; e. Please provide an estimated timeline for when the Company expects to know details of the WRAP's QCC for demand response resources; and

f. If the Company were to claim the QCC of DR resources in the WRAP, please explain how the cost-effectiveness calculations will account for the additional benefit. If possible, please provide example workpapers detailing how the benefit is accounted for in the cost-effectiveness calculation of a DR program in Excel format with equations intact and enabled.
RESPONSE:
a) Existing DR is modeled as a peak demand reduction using the QCC value’s effect to the program demand reduction. Potential DR programs are modeled as a resource with a QCC value. b) Please see page 20 of Staff-PR-005 Attachment A. c) The Preferred Resource Strategy did not include any Idaho DR programs. d) SPP, the WRAP administrator, has yet to determine the long-term QCC of DR, or other energy limited resources, but has indicated to participants and stakeholders that a study will be conducted to determine appropriate long-term QCC values for resource planning, impacts of snap-back or even longer-term effectiveness as regional load grows and/or
transforms, or as the regional resource mix evolves. In the meantime, Avista could continue to use the methodology developed in the 2023 IRP using E3’s analysis or would be required
to conduct its own regional study to determine energy limited resources benefit to regional
system reliability. Given the magnitude of the second option, Avista is supportive of the WRAP’s efforts to study this issue as a region. e) SPP held its first meeting on this issue in June 2023 and developed a charter, the results of future studies will likely be completed in early 2024. f) For WRAP and the Company’s forward showing position, only the QCC of DR can be claimed in accordance with the WRAP tariff. Currently DR QCC values are based on the number of hours of load reduction of the program divided by 51 (per the WRAP tariff).
Cost-effectiveness is considered when Avista determines which programs it will
implement such as studying the programs in the IRP to compare its cost to the resource capability of the program against other resource options. Avista did conduct a test scenario keeping the WRAP’s QCC values for the full study period Scenario 7 link2 to PRiSM model. In this scenario Avista did find it cost effective to implement time of use rates in
Idaho by January 1, 2036.

1 WRAP’s final maximum duration for DR. 2 https://www.myavista.com/-/media/myavista/content-documents/about-us/our-company/irp-
documents/2023/07prism80expected-case030223wrapprmnoqccchanges.xlsm
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/17/2023 CASE NO: AVU-E-23-05 WITNESS: James Gall REQUESTER: IPUC RESPONDER: Lori Hermanson TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-006 TELEPHONE: [phone]
REQUEST: Please provide the following workpapers listed in the 2023 IRP Appendix F.

a. Avista DR potential inputs and levelized cost; b. Final Avista Electric Measure List; and
c. Avista 2022 Electric CPA Summary and IRP Inputs v3. RESPONSE: Please refer to Integrated Resource Planning (myavista.com) for the above. Final Avista Electric
Measures List and the 2022 Electric CPA Summary and IRP Inputs can be found under Appendix
F under energy efficiency. Avista DR potential inputs and levelized cost can be found under Appendix F under PRiSM Model Files. Since filing the IRP, Avista received an updated file of the Avista 2022 Electric CPA Summary
and IRP Inputs files from AEG. The previous file did not contain all of the residential programs.
This updated file is included as Staff-PR-006 Attachment A. Avista through its EEAG will discuss next steps with this new information.

AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/17/2023 CASE NO: AVU-E-23-05 WITNESS: James Gall REQUESTER: IPUC RESPONDER: Lori Hermanson TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-007 TELEPHONE: [phone]
REQUEST: Please provide workpapers supporting the Idaho avoided costs given in the 2023 IRP on page 9-
29 in Excel format with equations intact and enabled. RESPONSE: Please see to Staff-PR-007 Attachment A.